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Case Reviews, The Law

Parthiv Parikh, Rp of Jai hind Project Ltd. v. Brahmaputra Crackers & Polymer Ltd. [Company Appeal (AT) (Insolvency) No. 509 of 2020]

The instant appeal does not question the legality of the approved plan but just wants the court to view the appeal against the ‘resolution plan’ order which was passed earlier.

By: J. Suparna Rao, 4th Year, BBA LL.B, Ramaiah Institute of Legal Studies, Bangalore. 

Background: 

  • The interim application was filed by M/S Brahmaputra Cracker and Polymer Limited in the case of Brahmaputra Cracker & Polymer Limited Vs. Parthiv Parikh.1
  • The applicant stated that an interim application was filed against the rejection of the claim by RP, which was disposed of by the Tribunal on 19th September 2019 by giving direction to the RP to consider the claim. 
  • It was stated that the applicant has awarded mechanical and piping work to the Corporate Debtor in the six units. 
  • In this case, the applicant contended that the corporate debtor has failed to complete the work as per the decided terms and conditions. 
  • The applicant stated that Corporate Debtor has not even paid the arbitral fee of the arbitration taken to resolve the dispute between the parties arising out of the six work contracts.

The Corporate Debtor has not accepted the claim arising out of RP reply in the interim application of 2019. 

  • The RP has shown the total claim as of Rs.87,10,33,509/- with a note of claim as sub-judice and not as operational debt. 
  • The applicant’s prayer to the court was to pass an order to claim Rs.87,10,33,509/- as an operational debt of the corporate debtor i.e. M/s. Jaihind Projects Ltd. 
  • The question before the court was whether the amount of compensation is to be considered as operational debt. 

The Court held that the liquidated damages are distinct from operational debt and directed the RP to include the claim of the applicant in its full value. 

  • Thus, the above-mentioned order passed by the adjudicating authority on 22nd January 2020 has been put before the court in comparison to another order of 19th March 2020. 

Facts: 

  • On 12th June 2020 the learned counsel of the appellant, Ms.Purti Marwaha filed a copy of the order dated 19th March 2020. This order was passed by the National Company Law Tribunal, Ahmedabad Bench. 

She contended that the ‘resolution plan’ of Paritix Irrigation Limited incapacity of JaihindProjets Limited was approved. 

  • Such approval by an order dated 19th March 2020 was made to balance the interests of all the stakeholders. 
  • Whereas in the order passed by the Adjudicating Authority on 22nd January in Interim Application No. 657 of 2019 in CP (IB) No. 172/NCLT/AHM/2018 was to include the full value as ‘Resolution Professional.’ 

Issue:

The issue here before the court was whether the approval of the resolution passed by the adjudicating authority on 22nd January 2020 has been overtaken by the approval of the resolution plan on 19th March 2020 which has been approved intending to balance the interest of the shareholders. This appeal does not question the legality of the approved plan but just wants the court to view the appeal against the ‘resolution plan’ order which was passed earlier. 

Decision:

The Court through virtual mode held the appeal as not maintainable and accordingly disposed of the appeal. 

Parties: 

Applicant: Parthiv Parikh, RP of Jaihind Project Ltd. 

Through: Ms.PurtiMarwaha, Ms.Heena George, and Ms.Tush, Advocates. 

Respondent: Brahmaputra Cracker & Polymer Ltd. 

Through: Mr.AkshatKhare, Advocate. 

Decided By: Justice BansiLalBhat, Justice AnantBijay Singh, Dr. Ashok Mishra (Member) (Technical)

End Notes:

  1. I.A. Nos. 657 and 593 of 2019 in CP(IB) No. 172/9/NCLT/AHM of 2018

Reference:

  1. https://www.manupatrafast.com/

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