Claim of operational debt can’t be fastened on successful resolution applicant after approval of resolution plan

Case Details: Shree Siddhivinayak Cotspin (P.) Ltd. v. Sujata Chattopadhyay - [2021] 130 taxmann.com 146 (NCLT - Mum.)

Judiciary and Counsel Details

• • Janab Mohammed Ajmal, Judicial Member and V. Nallasenapathy, Technical Member
  • Mustafa Doctor, Sr. Adv., Amir Arsiwala and Shriraj Khambete, Advs. for the Applicant. Ms. Anamika, Adv., Rohit Gupta, Adv. Nirav Parmar, Shreedharan, Gopal Machiraju, Ms. Khushbu Marwadi and Ms. Alefiya Mandviwala, Advs. for the Respondent.

Facts of the case

In this given case, Respondent is the Maharashtra Industrial Development Corporation (M.I.D.C) against whom reliefs are sought. The Respondent allotted plots in favor of corporate debtor vide. agreement of lease. The Respondent had also given consent to mortgage leased properties in favor of the financial creditor of the corporate debtor.

However, the corporate debtor failed to repay the bank loan, possession of the plot was taken over by the creditor bank. Thereafter, Corporate Insolvency Resolution Process (CIRP) application was admitted against the corporate debtor.

The Resolution plan was submitted by the applicant and the same was approved by Adjudicating Authority. The Respondent’s claim of Rs. 2.92 crore as the operational debt was paid and settled for Rs. 2.67 lakh in the said resolution plan.

NCLT Held

Thereafter, the Applicant requested Respondent to issue ‘No Due Certificate’ and ‘No Objection Certificate’ for the creation of security interest over factory premises of corporate debtor.

In reply, the Respondent issued a letter to the applicant claiming a total due of Rs. 3.50 crores, without giving any details thereof. The Applicant submitted that since Respondent had not issued NOC to mortgage leased land, the applicant was not in a position to avail loan sanctioned by the bank.

The Respondent should have claimed said amount before Resolution Professional as an operational creditor and since no claim was made at an appropriate stage, the same could not be fastened to an applicant after approval of resolution plan.

Since the respondent was the owner of the property, it was purely within its prerogative to decide on the issue of NOC or not. As a result, the instant Tribunal had no jurisdiction to grant such relief.

List of cases referred to

• • UP Street Industrial Development Corpn. v. Monsanta Manufacturers (P.) Ltd. [2015] 12 SCC 501 (para 13)
  • Aurangabad Carbon Producers (P.) Ltd. v. State of Maharashtra [WP No. 8499 of 2014, dated 6-7-2015] (para 13)
  •  Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta [2019] 111 taxmann.com 234 (para 30)