Related Parties cannot claim entitlement of any amount in Resolution Plan and cannot claim any discrimination with regard to payments to unrelated Unsecured Financial Creditors – Manav Investments and Trading Co. Ltd. Vs. Pratim Bayal and Ors. – NCLAT New Delhi
Hon’ble NCLAT refers M.K. Rajagopalan v. Dr. Periasamy Palani Gounder and Anr. (2023) ibclaw.in 60 SC and holds that
(i) Both the Appellants who have filed these Appeals are related parties. Related parties cannot claim entitlement of any amount in the plan and cannot claim any discrimination with regard to payments to unrelated unsecured Financial Creditors.
(ii) Insofar as the submission that distribution is not in accordance with vote share which violates Section 53 r/w Section 32 (b) of the IBC, the said submission need no consideration since the Appellant being related party is not entitled for any distribution and no stakeholder who is entitled for distribution is aggrieved by the decision of the Committee of Creditors regarding mode and manner of distribution.
(iii) With regard to discrimination in payments to the workers and employees, no workers and employees have any grievance nor any workers and employees is dissatisfied with the payments made under the plan to them nor have they come in Appeal.
(iv) Upheld decision of NCLT Kolkata Bench.