‘Operational Creditors’ can claim only Money that is payable as per Section 53 of IBC: NCLT [Read Order]

The Delhi Bench of the National Company Law Tribunal (NCLT) while considering a bunch of appeals has held that ‘Operational Creditors’ can claim only the money that is payable as per Section 53 of Insolvency and Bankruptcy Code (IBC), 2016

It was submitted by the Appellants that they are the ‘Operational Creditors’ of the ‘Corporate Debtor’ who had sought intervention in the Application preferred by the Resolution Professional seeking approval of the Resolution Plan.

It was contended that the total aggregate amount of the ‘Operational Debt’ from ‘Operational Creditors’ other than Employees, Workmen and Farmers is Rs.63,45,09,539/- as against the total debt of Rs.193,58,53,515/- which is 32.78% of the total debt.

 It was argued that the share of ‘Operational Creditors’ other than Workmen, Employees and Farmers being 32.78% of the total debt, no notices of the Meeting of the CoC was ever given to the Appellants and other ‘Operational Creditors’ thereby denying them an opportunity to participate in the Meetings.

A Coram comprising Justice Anant Bijay Singh,Member (Judicial) and Ms Shreesha Merla, Member (Technical)observed that the Plan was approved by 100% Voting Share way back on 11.11.2019 almost three years ago and has also been implemented.

The NCLTheld that the ‘Operational Creditors’ were paid as per Section 30(2)(b) of the IBC and read together with  Regulation 38 of the CIRP Regulations, the ‘Operational Creditors’ are entitled to receive only such money that is payable to them as per Section 53 of the Code.

Further observed that it is the final discretion of the ‘Collective Commercial Wisdom’ about (1) The amount to be paid (2) The quantum of money to be paid, to a certain category or the incidental category of Creditors, balancing the interests of the ‘Stakeholders’ and the ‘Operational Creditors’. The limited judicial review available to Adjudicating Authority lies within the four corners of Section 30(2) of the Code.     

While dismissing the appeal, the Tribunal viewed that “some minimum entitlement to the ‘Operational Creditors’ may be examined by the Government and the IBBI, based on the amount realised in the Resolution Plan over and above the liquidation value.”

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