JUDGEMENT

Per: Justice Rakesh Kumar Jain: Corporate Insolvency Resolution Process (in short ‘CIRP’) of Lakeland Chemicals (India) Ltd. (Corporate Debtor) was initiated by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court – III) by its order dated 23.09.2019 passed on an application filed by Mahavir Interchem under Section 9 of the Insolvency and Bankruptcy Code, 2016 (in short ‘Code’). Nandkishore Bhatia was appointed as the Interim Resolution Professional (in short ‘IRP’) but the Committee of Creditors (in short ‘CoC’) in its meeting held on 13.01.2020 appointed B.K Mishra as the Resolution Professional (in short ‘RP’) which was approved by the Adjudicating Authority vide its order dated 24.01.2020.

2. The IRP published a public announcement on 22.10.2019, inviting the claims of the creditors from the Corporate Debtor. The claims of the Financial and Operational Creditors were received and admitted as under:-

3. The RP obtained the valuation of the fixed assets, the securities and financial assets and during the period of CIRP issued Form-G for inviting Expression of Interest (EOI). He received EOIs from three Prospective Resolution Applicants (PRAs) which was evaluated on the evaluation matrix in the 17th meeting of CoC held on 08.06.2021 and e-voting conducted on 21.08.2021. The plan submitted by the Respondent No. 3 ‘KLJ Resources Ltd.’ was approved with the voting share of 96.38% and compliance certificate Form-H was issued by the RP. In the resolution plan, approved by the CoC, Operational Creditors (other than workmen and statutory dues) has been given 1.00% (approx.) of the total admitted claim. The relevant part of the plan in this regard is reproduced as under:-

“Admitted as per the Information Memorandum are Rs. 24.98 Cr. Based on the admitted claims in respect of the operational creditors in the estimate of the resolution applicant the Company liquidation value is not sufficient to cover the debt of the operational creditor in full. However, out of total fund infused Rs. 0.25 Cr shall be earmarked for payment to operational creditors i.e. 1.00% (approx.) of the total admitted claim.

- Rs. 0.25 Cr. shall be paid upfront within 30 days from the Effective Date (At least a day before payment to financial creditors.) - No interest shall be paid to Operational Creditors.”

4. The RP filed an application i.e. I.A. No. 2464 of 2021 under Section 30(6) and Section 60(5) of the Code before the Adjudicating Authority for seeking its approval of the resolution plan submitted by Respondent No. 3. While the application filed by the RP bearing I.A. No. 2464 of 2021 was pending before the Adjudicating Authority, one of the Operational Creditor, namely, Bheron Corporation filed I.A. No. 2524 of 2021 in which it was prayed that since there is non-compliance of Section 24(3)(c) and Section 24(4) of the Code, therefore, the resolution plan purported to have been approved by the CoC be rejected.

The Applicant in this application submitted a claim as an Operational Creditor to the IRP of an amount of Rs. 24,65,839/-. This application was heard on the same day when I.A. No. 2464 of 2021 filed by the RP for approval of the resolution plan was heard but this application was dismissed on 19.09.2022 on the ground that since the Applicant is having merely a claim of 0.191% of the total debt of the Corporate Debtor, therefore, there was no question to give notice to it and the application was dismissed with costs of Rs. 1 Lakh which was ordered to be paid to the RP who was further ordered to pay it to the Financial Creditors.

5. On 19.09.2022, the application bearing I.A. No. 2464 of 2021 filed by the RP for approval of the resolution plan was allowed.

6. The present appeal has been filed by three Operational Creditors mentioned hereinabove to challenge the order dated 19.09.2022 passed in I.A. No. 2464 of 2021, inter alia, on the ground that the RP has committed a serious error of law in not complying