- The Hon’ble Supreme Court (SC or Court),in Ruchi Soya Industries Ltd v Union of India &Orshas observed that claims which were not lodged pursuant to pursuant to public announcements under Sections 13 and 15 of the Insolvency & Bankruptcy Code, 2016 (IBC) and not forming part of the resolution plan submitted before the NCLT would not survive.
- The appeal before Supreme Court challenged the impugned order of the Hon’ble High Court of Karnataka (HC) rejecting writ petitions filed by the Appellant seeking an issuance that Notification 38 of 2002, Customs was not applicable to the import of palmolein oil covered under the Bill of Entry for Home Consumption.
- The said notification increased the tariff price of Crude Palm Oil from 337 to 392 US$ per metric tonne.
- The Appellant, through its Bankers, filed an application under Section 7 of the IBC forinitiation of Corporate Insolvency Resolution Process (CIRP). After the completion of the process, an application under Section 30(6) of the IBC was filed for grant of approval of the Resolution Plan.
- The Appellant contended that a claim was lodged by the Respondent before the Resolution Professional in respect of their demands. However, no claim was lodged for the demand being the subject matter of the present proceedings. Therefore, the Respondent is not entitled to any claim which was not part of the Resolution Plan.
- In its argument, the Respondent stated no notice was issued to the Authority at Mangalore and there was certain confusion as to whether the operational debt as defined under Section 5(21) of the IBC would cover the claim of the Respondent. They submitted that it was in view of the said confusion that the Authority at Mangalore did not lodge any claim with respect to the present proceedings.
- The SC observed that the issue in the present appeal was the subject matter of consideration by this Court in the case of Ghanashyam Mishra & Sons Pvt. Ltd. V Edelweiss Asset Reconstruction Company Ltd. &Ors wherein the Court held that once a resolution plan was duly by the Adjudicating Authority under Section 31(1),all claims under the plan stood frozen stake holders like corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, etc would be bound by the resolution plan.
- In the same case the Court held that claims not forming part of the resolution stand extinguished as on the date of the approval and no person is entitled to initiate or continue any proceedings in respect to a claim not forming part of the plan.
- Further, the Court also noted that amendment to Section 31 was clarificatory and declaratory in nature and therefore will be effective from the date on which the I&B Code came into effect.
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