Pranav B Prem

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member - Technical), recently dismissed an appeal filed by the Greater Noida Industrial Development Authority (GNIDA) challenging the payment terms in a Resolution Plan approved by the Committee of Creditors (CoC) and the Adjudicating Authority. The tribunal held that once the CoC and the Adjudicating Authority approve a Resolution Plan, its payment terms become final and binding.

Background

The case arose from the Corporate Insolvency Resolution Process (CIRP) initiated against the Corporate Debtor. GNIDA, an operational creditor, had submitted a claim amounting to Rs. 21 crore. However, the Resolution Professional (RP) admitted only Rs. 18.24 crore. Dissatisfied, GNIDA objected to the partial admission and filed an application challenging it. Subsequently, the CoC approved a Resolution Plan proposing a payout of Rs. 6.79 crore to GNIDA. Unhappy with this amount, GNIDA filed an appeal before the NCLAT, arguing that it should be treated as a secured creditor and be entitled to a higher payout. Meanwhile, the Successful Resolution Applicant (SRA) sought directions to compel GNIDA to accept the amount specified in the approved Resolution Plan.

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Contentions of the Parties

GNIDA contended that, as a secured creditor, it was entitled to a greater share in the Resolution Plan. In support of its position, GNIDA relied on the Supreme Court's ruling in Greater Noida Industrial Development Authority v. Prabhjit Singh Soni & Anr. (Civil Appeal Nos. 7590-7591 of 2023), which recognized its status as a secured creditor. GNIDA further argued that the amount of Rs. 6.79 crore offered to it under the approved Resolution Plan was insufficient and not in line with its entitlement.

The respondents, on the other hand, argued that the Resolution Plan had already been approved by the CoC and the Adjudicating Authority, making its terms final. They asserted that the payment of Rs. 6.79 crore to GNIDA was in accordance with the approved plan and that GNIDA's objections lacked merit, given that the approval of the plan had already attained finality.

NCLAT's Judgment

The NCLAT, after hearing both parties, dismissed GNIDA's appeal and upheld the validity of the Resolution Plan and its payment terms. The tribunal emphasized that: "Any question with regard to entitlement of the Appellant was subject matter of the Order by which the Plan was approved."

The tribunal observed that GNIDA had already challenged the Adjudicating Authority's order dated August 24, 2023, approving the Resolution Plan. However, the NCLAT had previously dismissed GNIDA's appeal on grounds of limitation, rendering the approval of the Resolution Plan final and binding. "Plan approval on 24.08.2023 having attained finality, we do not find any error in the view taken by the Adjudicating Authority that the said Order has become final and the amount which has been deposited as per the Resolution Plan is entitled to be received by the Appellant."

Additionally, the NCLAT addressed GNIDA's concerns about the amount deposited in the escrow account. The tribunal clarified that these objections were beyond the scope of its current proceedings as they had already been addressed in earlier decisions that had attained finality.

The tribunal also cited the Adjudicating Authority's direction:  "The Greater Noida Industrial Development Authority would accept the amount deposited in escrow account without prejudice to its contention as espoused in para 5 of the reply."  The tribunal found no merit in GNIDA's arguments and held that once the CoC and the Adjudicating Authority approve a Resolution Plan, the payment terms cannot be reopened or questioned later.

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Key Takeaways from the Judgment

1. Once the CoC and the Adjudicating Authority approve a Resolution Plan, its terms become binding and cannot be challenged later unless successfully overturned within the prescribed time frame.

2. The tribunal acknowledged GNIDA's reliance on the Supreme Court's ruling affirming its status as a secured creditor. However, it held that such entitlement claims must be raised during the approval process and cannot be revisited once the Resolution Plan is finalized.

3. The tribunal clarified that issues already decided and which have attained finality cannot be reopened in subsequent proceedings. The objections related to the amount in the escrow account were outside the scope of the present appeal.

4.  The tribunal reiterated that the payment terms outlined in an approved Resolution Plan must be adhered to by all parties, including operational creditors, regardless of subsequent objections.

Appearance

For Appellant: Mr. U.N. Singh, Advocate.

For Respondents: Mr. Sumesh Dhawan, Ms. Vatsala Kak and Mr. Raghav Dembla, Advocates for R-1.

Mr. Iswar Mohopatra, Advocate for R-2/RP

Cause Title: Greater Noida Industrial Development Authority Through Its Manager (Institution) v. Sandeep Gupta & Anr.

Case No: Company Appeal (AT) (Insolvency) No. 320 of 2025

Coram: Justice Ashok Bhushan [Chairperson], Arun Baroka [Member (Technical)]

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