AI Structured Summary
Not yet generated for this judgment
Judgment
Heard Shri Sudhir Makkar, Learned Senior Counsel for the Appellant.
This Appeal has been filed against the order dated 30.08.2023 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Special Bench (Court-II) by which IA No.4174 of 2023 filed by the Appellant has been rejected.
Learned Senior Counsel for the Appellant submits that the Appellant’s name was included in the balance sheet of the Corporate Debtor. However, after publication was made by the Liquidator and claim was filed by the Appellant which stood rejected, an Appeal under Section 42 of the IBC also was subsequently rejected on the ground of limitation. Under the order of this Tribunal, a scheme was submitted under Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016 which scheme was approved by SIDBI the 100% Financial Creditor and in the scheme, no payment was proposed to the Appellant, hence, he filed an application before the Adjudicating Authority challenging the scheme on the ground that the Appellant was also a Financial Creditor whose consent was required for approval of the scheme. Adjudicating Authority has rejected the said application. Aggrieved by the said order, this Appeal has been filed.
Learned Senior Counsel for the Appellant submits that in the scheme, Appellant’s amount was noticed. However, the payment proposed as NIL. It is submitted that even though the claim of the Appellant was rejected in the liquidation proceeding but since it was reflected in the balance sheet, Appellant is a Financial Creditor. He further submits that the claim of Appellant was reflected in the balance sheet which was even signed by the Liquidator.
We have considered the submissions of the Appellant and perused the record.
The claims of all creditors are to be considered in the liquidation proceedings and examined by the Liquidator and in event of any dispute, matter is required to be adjudicated by the Adjudicating Authority. There is no dispute to the fact that the claim was filed by the Appellant as Financial Creditor which stood rejected by the Liquidator as well as the Adjudicating Authority. The rejection of the claim of the Appellant clearly lead to the conclusion that the claim cannot be accepted in the liquidation proceedings nor Appellant is entitled for any claim in the water fall mechanism.
Present is a case where a scheme was submitted in the liquidation proceeding in which scheme also the payment to the Appellant has been shown as a ‘nil’ and the scheme was approved by SIDBI who according to the Liquidator was a 100% Financial Creditor. When the Appellant’s claim was rejected, he cannot claim that he is a Financial Creditor whose consent was required for approval of the scheme. The Application filed by the Appellant for the purpose that a scheme be rejected since consent of the Appellant was not obtained. He also prays for modification of the scheme. The Adjudicating Authority has rejected the application relying on the fact that the claim of the Appellant was rejected by the liquidator and when the scheme was brought it had approval of 100% Financial Creditor i.e. SIDBI. Much emphasis has been made by the Counsel for the Appellant on the fact that Appellant’s claim was reflected in the balance sheet. It is after the reflection in the balance sheet that in the liquidation proceeding, the claim was filed by the Appellant and adjudicated rejecting the claim of the Appellant. The proceeding which undertook in the liquidation proceedings cannot be ignored nor can be washed out only on the ground that in the balance sheet of the Corporate Debtor the name of the Appellant was reflected. Proceeding in the adjudication which culminated in the rejection of the claim has to be given effect to in the liquidation proceeding. The scheme was also a part of the liquidation proceeding, hence, we are of the view that no error has been committed by the Adjudicating Authority rejecting the application of the Appellant.
There is no merit in the Appeal. The Appeal is dismissed.