Once Adjudicating Authority approves Resolution Plan, does it still remains a confidential document? Read what NCLAT says

National Company Law Appellate Tribunal (NCLAT): Justice Ashok Bhushan (Chairperson) and Dr Ashok Kumar Mishra (Technical Member) expressed that, once Resolution Plain is approved by the Adjudicating Authority, it no longer remains a confidential document, so as to preclude Regulator and other persons from accessing the said document.

Whether the appellant/applicant is entitled to be given a copy of Resolution Plan or any part of the Resolution Plain in the appeal?

Appellant had sought a direction to produce records along with a full set of documents relating to Corporate Insolvency Resolution Process of Corporate Debtor in the application for interim relief.

Question that is to be answered in the present matter is:

Whether appellant is entitled to a copy of Resolution Plan?

Background

Appellant was an association of aggrieved workmen of the Jet Airways (India) Ltd. and were Operational Creditors who filed their claim before the Resolution Professional. The Resolution Plan allocated workmen and employees an amount of Rs 52 Crores. The said Appeal had been filed by the Appellant challenging the order of the Adjudicating Authority approving the Resolution Plan on several grounds.

Analysis, Law and Decision

In view of relevant sections and regulations, Coram expressed that an Insolvency Professional must ensure that confidentiality of the insolvency resolution process, liquidation or bankruptcy process, as the case may be, is maintained at all times. However, this shall not prevent him from disclosing any information with the consent of the relevant parties or required by law.

Section 24 of the IB Code read with Regulation 21 (3) (iii) of Process Regulation 2016, makes it clear that all Members, who were to participate in the meeting of the Committee of Creditors had to be provided copies of all relevant documents.

Therefore, in view of the above, the entitlement of copy of documents during the CIRP is for only those who are to participate in CIRP.

The category of creditors including the Members of the suspended Board of Directors or the partners of the corporate persons, who are entitled to participate in the meeting of the Committee of Creditors are entitled to receive copies of all documents.

Supreme Court in the decision of Vijay Kumar v. Standard Chartered Bank, (2019) 20 SCC 455, held that Members of the suspended Board are entitled to participate in the meeting of the Committee of Creditors. They are also entitled to be given a copy of the Resolution Plan before such meetings are held.

The question which arose in the present proceeding was: Whether the Resolution Plan after it being approved by the Adjudicating Authority, still continues to be a confidential document, so as to deny access to any of the claimants? 

Tribunal observed that when the inspection is permitted of record of the Adjudicating Authority, obviously inspection can very well be made of the Resolution Plan, which is part of the proceedings before the Adjudicating Authority.

Further, the provision of Section 61(3) reaffirms the Tribunal’s view that after approval of the Resolution Plan, Resolution Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan and has come up on the Appeal.

Adding to the above, Coram elaborated that the Resolution Plan even though it is not a confidential document after its approval, cannot be made available to each and to anyone who has no genuine claim or interest in the process.

In the present case, the appellant is entitled to the relevant part of the Resolution Plan relating to the claim of the workmen and employees. Hence Tribunal directed that part of the Resolution Plan which deals with the claim of workmen and employees should be provided to the appellant by the successful resolution applicant. [Assn. of aggrieved Workmen of Jet Airways (India) Ltd. v. Jet Airways (India) Ltd., 2022 SCC OnLine NCLAT 36, decided on 20-1-2022]


Advocates before the Tribunal:

For Appellants:

Mr. Nikhil Nayyar, Sr. Advocate with Ms. S. Manjula Devi, Advocate

Dr. KS Ravichandran (CS)

For Respondents:

Mr. Arun Kathpalia, Sr. Advocate with Mr. Malhar Zatakia, Mr. Nishant Upadhyay, Madhur Arora, Mr. Dhiraj Kumar Totala Ms. Tanya Chib, Advocates (R-1, 3)

Ms. Isha Malik, Ms. Niharika Shukla and Mr. Raunak Dhillon, Advocates (R-2)

Ms. Pooja Mahajan, Mr. Aashish Vats, Mr. Arveera Sharma, and Ms. Mahima Singh, Advocates (R-4)

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