RPS Infrastructure Ltd. Vs. Mukul Kumar & Anr.[
Civil Appeal No. 5590 of 2021]
RPS Infrastructure Ltd. Vs. Mukul Kumar & Anr.
Court : Supreme Court of India
Facts : The Appellant and the Corporate Debtor (CD) entered into an agreement for the development of land. However, the Appellant being aggrieved of CD misconduct of advertising the project on his own name without mentioning the name of the Appellant sought remedy through Arbitration. In the Arbitration proceedings an award was passed in the favour of the Appellant however an appeal was filed by the Corporate Debtor against the award.
Issue : Whether the appellant’s claim pertaining to an arbitral award, which is in appeal under Section 37 of the Arbitration Act, is liable to be included at a belated stage – i.e. after the resolution plan has been approved by the COC.
Judgement :The Hon’ble Court held that It is undisputed that the process followed by Resolution Professional was not flawed in any manner, except to the extent of whether an efforts should have been made by Resolution Professional to locate the liabilities pertaining to the said award from the records of the Corporate Debtor. If we analyse the aforesaid plea, it is quite obvious that Resolution Professional did what could be done to procure the Corporate Debtor’s records by even moving an application under Section 19 of the IBC. That it was not fruitful is a consequence of the Corporate Debtor not making available the material. It is thus not even known whether there was a reflection in the records on this aspect or not
It also held that mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process. This would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon. As described above, in Committee of Creditors of Essar Steel India Ltd. Vs. Satish Kumar Gupta & Ors. [2019] ibclaw.in 07 SC, the Court cautioned against allowing claims after the resolution plan has been accepted by the COC.