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JC - Legal Updates - Approved Resolution Plan not a confidential document – NCLAT

Legal Updates

03 Feb 2022

Approved Resolution Plan not a confidential document – NCLAT

A Resolution Plan after its approval by the Adjudicating Authority is no longer a confidential document, so as to deny access to a claimant having a genuine claim or interest.

The National Company Law Appellate Tribunal, New Delhi (“NCLAT”) made this observation vide its order dated 20th January 2022 in the matter of Association of aggrieved Workmen of Jet Airways (India) Ltd. v. Jet Airways (India) Ltd. and Ors. while hearing an appeal filed by workmen of Jet Airways (India) Ltd. (“Corporate Debtor”) as operational creditors against the order of the Adjudicating Authority dated 22nd June 2021 approving the Resolution Plan for the Corporate Debtor.

The NCLAT relied on Section 31 sub-section (3) of the Insolvency and Bankruptcy Code, 2016 (“IB Code”), to observe that that a resolution professional, after approval of Resolution Plan is required to forward all the records relating to the corporate insolvency resolution process (“CIRP”) of the corporate debtor in order to record the same on its database. This also includes the copy of the approved resolution plan. Sub-rule (2) of Rule 114 of the National Company Law Tribunal Rules, 2016 provides for inspection of the aforesaid records (which contains the Resolution Plan submitted by the resolution professional to the Adjudicating Authority) by making an application to the Registrar, NCLT and by paying prescribed fee thereof.

The NCLAT further observed that, when a Resolution Plan is submitted to the Adjudicating Authority with an application to accept the Resolution Plan, the application as well as the Resolution Plan remains part of the proceedings before the Adjudicating Authority and therefore the right to inspection is granted statutorily. It also observed that the scheme of the IB Code indicates that after a copy of Resolution Plan is submitted to the Adjudicating Authority and upon the same being approved, it no longer remains a confidential document, so as to preclude the Regulator and other persons from accessing the same. (only to interested parties).

The NCLAT further observed that, given the provision for appeal against an approved resolution plan under Section 61(3) for specified grounds listed therein, the Appellant who has challenged a Resolution Plan is entitled to know the contents of the Resolution Plan to effectively prosecute his Appeal. However, it noted that though not confidential, the Resolution Plan cannot be made available to each and to anyone who has no claim or interest in the process.

On the basis of the said analysis, the NCLAT, in its judgment, concluded that the Resolution Plan after its approval by the Adjudicating Authority is no longer a confidential document, so as to deny access to a claimant who is aggrieved by the plan.

order_view.php (nclat.gov.in)

For any further information, please contact Mr. Shubhabrata Chakraborti (shubhabrata.chakraborti@jclex.com) or Mr. Dhruv Malik (dhruv.malik@jclex.com).