Once Claims Are Received By Investors Under Settlement Agreement, They Are Prohibited From Claiming Same Amount Under Resolution Plan: NCLAT
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Mohd Faiz Alam Khan and Mr. Naresh Salecha (Technical Member), has held that once an investor of the Corporate Debtor has received an amount under the Settlement Agreement and has given an unconditional undertaking to forgo all claims under the Resolution Plan, they are barred from claiming the same amount...
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Mohd Faiz Alam Khan and Mr. Naresh Salecha (Technical Member), has held that once an investor of the Corporate Debtor has received an amount under the Settlement Agreement and has given an unconditional undertaking to forgo all claims under the Resolution Plan, they are barred from claiming the same amount under the Resolution Plan, as such dual recovery is impermissible.
The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by the National Company Law Tribunal (NCLT) Kolkata by which the Appellant's application was dismissed.
The Appellant submitted that the NCLT has illegally rejected the application moved by the appellants by passing impugned order of date 11.06.2024 by concluding that NCD holders have received more than, which was due in the resolution plan, while the Piramal fund manager was not having any locus at all.
It was further argued that the impugned order is liable to be set aside and Respondent be directed to release Rs. 16.10 Crore and also allotment of 10 lakh class B shares to 188 NCD holders, which they ought to get under the plan.
Per contra, the Respondent submitted that the Adjudicating Authority has not committed any illegality in rejecting a frivolous application moved by the applicants as the SRA has already discharged of its liability under the approved Resolution Plan and the two applicants have already received Rs. 25 lakhs while their entitlement was only of Rs. 5,12,689/- under the plan and instead of putting a quietus to the dispute they are further propagating their frivolous cause.
The Tribunal rejected the contention of the Appellants that they were properly represented before the CoC. They have not objected to the approved resolution plan therefore arguing now that they were not properly represented in the CoC carries little weight or significance.
It held that it is clear from the above facts that the Appellants are trying to claim the amount both under the settlement agreement and the resolution plan. The Appellants having received their dues under the settlement agreement and given an unconditional undertaking to forgo all the claims under the Resolution Plan, such dual recovery is impermissible. The investors were given the choice to opt either for the settlement and filed an undertaking to forgo all the claims under the Resolution Plan or forfeit rights under the Settlement Agreement and claim rights under the Resolution Plan but not both. Accordingly, the present appeal was dismissed.
Case Title: Shobhana Thakkar Versus Monitoring Committee of Ashiana Landcraft Realty Pvt. Ltd. and Ors.
Case Number: Company Appeal (AT) (Insolvency) No. 2156 of 2024
Judgment Date: 20/08/2025