Background of the Case

In an important insolvency matter, the National Company Law Appellate Tribunal (NCLAT) admitted an appeal filed by an Operational Creditor challenging an approved Resolution Plan on the grounds of alleged discrimination. The appeal was filed under the provisions of the Insolvency and Bankruptcy Code (IBC), 2016, questioning whether the plan treated certain creditors unfairly.

The Appellant was represented by Senior Advocate Mr. Gopal Jain, along with Ms. Madhumita Bhattacharjee (Managing Partner, Lexcuria Lawyers), Ms. Srija Choudhary, Advocates, and Ms. Arti Jain, Company Secretary.

Contentions by the Appellant

The Appellant argued that:

• The Resolution Plan approved by the National Company Law Tribunal (NCLT) was discriminatory towards the Operational Creditor.
• Though the NCLT passed its order approving the plan on 8 January 2019, the certified copy was only received on 28 August 2019, causing a delay in filing the appeal.
• To be cautious, an application for condonation of delay was also filed, although the appeal was filed on 14 October 2019, within the limitation period.

Response from the Respondents

The Successful Resolution Applicant argued that the appeal was barred by limitation, claiming that the Operational Creditor was informed soon after the plan’s approval.

NCLAT’s Observations

The Appellate Tribunal, after hearing both sides, held:

1. There was no delay in filing the appeal as the certified copy of the impugned order was received only on 28 August 2019.
2. The Successful Resolution Applicant would be impleaded as the new Respondent in place of the Corporate Debtor’s name.
3. The Resolution Professional was not required to be served a separate notice as the Corporate Debtor was already under the control of the Successful Resolution Applicant.

The Tribunal directed that notice be issued to the Respondents and allowed time for the filing of reply affidavits and rejoinders.

Next Steps and Settlement Opportunity

The NCLAT noted the possibility of an amicable settlement and allowed the Successful Resolution Applicant to engage directly with the Appellant (Operational Creditor) before the next hearing date. The matter was listed for final orders on 11 December 2019, with the expectation that the parties may attempt a negotiated resolution.

Lexcuria Lawyers’ Role

Ms. Madhumita Bhattacharjee, Managing Partner of Lexcuria Lawyers, appeared for the Appellant alongside the Senior Counsel and successfully demonstrated that the appeal was well within limitation, ensuring that the allegations of discrimination in the Resolution Plan would be examined by the Appellate Tribunal.

This case underscores the importance of timely access to certified orders in insolvency proceedings and the judiciary’s balanced approach in safeguarding the rights of Operational Creditors during the resolution process.

Key Takeaway

This order reaffirms that Resolution Plans must treat all creditors fairly and equitably, and Operational Creditors have every right to challenge plans if they suspect discrimination. The NCLAT also highlighted the need for fair procedural timelines to avoid prejudice.