Resolution Plan not confidential once approved by Adjudicating Authority: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has held that a Resolution Plan is not a confidential document once it has been approved by the Adjudicating Authority (AA) [Association of aggrieved Workmen of Jet Airways (India) Limited v Jet Airways (India) Ltd. and Ors)..A bench of NCLAT Chairperson, Justice Ashok Bhushan and Dr Ashok Kumar Mishra however, added that even though the plan is not confidential after its approval but it cannot be made available to anyone who does not have a genuine claim or interest in the resolution process and therefore access to same can be denied in proper and appropriate cases..The NCLAT was dealing with an appeal filed by aggrieved workmen of Jet Airways who were operational creditors and had filed their claim before the resolution professional. The resolution plan offered them an amount of ₹52 Crores. However, they challenged the order of the AA approving the said plan.The limited question before the NCLAT was whether the appellant workmen were entitled to get a copy of the resolution plan or any part of the proceedings whose approval they had challenged and if the resolution plan, after being approved by the AA, still continues to be a confidential document, so as to deny access to any of the claimants..After considering the arguments from both sides, the NCLAT held that though the resolution plan is a confidential document during the Corporate Insolvency Resolution Process (CIRP) and entitlement to its copy during this process is only for those who participate in it, but the documents cease to be confidential once the plan has been approved by the AA..Referring to Rule 14 of the NCLT Rules, 2016 (which deals with inspection of records), the NCLAT said that when a plan is submitted to the AA with an application to accept it, the application as well as the plan is on record and then the right to inspection is granted statutorily.“When Resolution Plan is submitted to the Adjudicating Authority with an Application to accept the Plan, the Application as well as Plan is on the record of the case or proceeding and then right to inspection is granted statutorily, we do not accept the submission of learned Counsel for the Respondents that Resolution Plan still remains confidential documents after it is made part of the record or proceeding of the Adjudicating Authority… When inspection is permitted of record of the Adjudicating Authority, obviously inspection can very well be made of the Resolution Plan, which is part of the proceedings before the Adjudicating Authority. Section 117 of the NCLT Rules, 2016 deals with ‘Mode of inspection’. Sub-rule (3) of Rule 117 provides that note of any record can also be taken in pencil by a person inspecting the record,” the NCLAT said..It also referred to the fact that once the plan is approved, the records of the plan are sent to Insolvency and Bankruptcy Board of India (Board) to be recorded in its database and the fact sub-clause (h) of sub-section (1) of Section 196 of the Insolvency and Bankruptcy Code empowers the Board to call for any information and records from the insolvency agencies, professionals and information utilities, indicates that the plan is no longer confidential. “The power of the Board is thus also to call for any record from the Insolvency Professional, which may also include the Resolution Plan. Sub-clause (k) further empowers the Board to collect and maintain records relating to insolvency and bankruptcy cases and disseminate information relating to such cases. We, thus, are of the view that sending of the records by the Resolution Professional to Board as contemplated by Section 31 sub-section (3) is not only for proper data research studies only and the records and information can be recorded in its database and also can be published. The above scheme of the Code also indicates that after Resolution Plan is submitted to the Adjudicating Authority and it is approved by the Adjudicating Authority, it no longer remains a confidential document, so as to preclude Regulator and other persons from access the said document,” the judgment said. .The bench further cited Section 61, sub-section (3) of the IBC which deals with the grounds on which an appeal can be filed against the order approving the resolution plan. It asked as to how an appellant will satisfy the appellate court that grounds enumerated in the said section are made out if they are not even aware of the contents of the resolution plan.“The provision of Section 61, sub-section (3) reaffirms our view that after approval of the Resolution Plan, Resolution Plan does not remain a confidential document, so as to deny its perusal to a claimant, who is aggrieved by the Plan and has come up on the Appeal. We, thus, are of the view that Resolution Plan after its approval by the Adjudicating Authority is no more a confidential document, so as to deny access to even a claimant.”.The NCLAT, however, noted that in the present case there are more than 20,000 operational creditors and several applicants had approached the AA for a copy of the resolution plan which was rejected by the order of February 2021.The bench said that though the entire resolution plan cannot be supplied to the appellant, they are entitled to the party of the plan which relates to workmen and employees. Therefore, it directed the respondent to provide the relevant portion of the plan to the appellants within three weeks..The petitioners were represented by Senior Advocate Nikhil Nayyar, along with advocates S Manjula Devi, and KS Ravichandran (CS).Respondents 1 and 3 were represented by Senior Advocate Arun Kathpalia, along with advocates Malhar Zatakia, Nishant Upadhyay, Madhur Arora, Dhiraj Kumar Totala and Tanya Chib.Respondent 2 was represented by advocates Isha Malik, Niharika Shukla and Raunak Dhillon appeared for R-2.Respondent 4 was represented advocates Pooja Mahajan, Aashish Vats, Arveera Sharma, and Mahima Singh. .[Read Judgment]