Debangsu Basak, J.
1. In a suit for recovery of price of goods sold and delivered, the plaintiff has applied for a final judgment and decree under Chapter XIIIA of the Original Side Rules.
2. Learned Senior Advocate appearing for the defendant has submitted that, during the pendency of the suit, State Bank of India filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Principal Bench at New Delhi. In such proceedings, a Resolution Plan had been prepared and approved by the Adjudicating Authority. Such Resolution Plan had been challenged in appeal before the National Company Law Appellate Tribunal. Such appeal had been dismissed. Consequently, in view of 2020 (8) SCC 531 [LQ/SC/2019/1723] (Committee of Creditors of Essar Steel India Ltd. v. Satish Gupta and others), the claim of the plaintiff does not survive the approval of the Resolution Plan. He has submitted that the plaintiff is not entitled to any relief and that, the application should be dismissed.
3. The original plaintiff had filed the instant suit on February 7, 2012.
The original plaintiff had died on May 6, 2017. Consequent upon such death, and consequent upon an application for amendment, the original plaintiff had been substituted by the present plaintiff's in terms of the orders dated July 3, 2018 and August 28, 2018. The name of the defendant had changed to the present name and consequent upon such change of name, amendment to the cause title of the plaint was allowed by an order dated January 29, 2019.
4. During the pendency of the suit, State Bank of India had filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the National Company Law Tribunal, Principal Bench at New Delhi being (IB)-201 (PB)/2017. The Adjudicating Authority had admitted such petition and an Interim Resolution Professional was appointed on July 26, 2017. The Adjudicating Authority had also passed an order of moratorium on such date. On July 26, 2017, the Interim Resolution Professional had made a public announcement in Form A under Regulation VI of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 inviting claims from all the operational, financial and other creditors of the defendant. The pendency of the insolvency proceedings and the public announcement made by the Interim Resolution Professional had been brought to the notice of the Hon'ble Court in the suit. By an order dated August 17, 2017, the Hon'ble Court has been pleased to observe that, the proposed substituted plaintiff's may apply before the National Company Law Tribunal for appropriate reliefs. No. claims had been lodged by the plaintiff's before the interim Resolution Professional or the National Company Law Tribunal.
5. On October 7, 2017, the Resolution Professional had made a public announcement under Section 25 (2)(h) of the Insolvency and Bankruptcy Code, 2016 inviting Resolution Plans from prospective resolution applicants to submit their proposals. Tata Steel Limited had submitted its Resolution Plan on February 3, 2018. The Committee of Creditors of the defendant had approved such Resolution Plan of Tata Steels Limited. On being satisfied that the Resolution Plan of Tata Steels Limited satisfied the requirements of the Code of 2016, the Adjudicating Authority had approved such Resolution Plan on May 15, 2018. Consequent upon such approval, Bamnipal Steel Limited a wholly-owned subsidiary of Tata Steels Limited had acquired the control and management of the defendant. The challenge to the Resolution Plan as approved by the Adjudicating Authority before the National Company Law Appellate Tribunal had failed. On November 27, 2018, the name of the defendant had changed to Tata Steel BSL Limited.
6. Committee of Creditors of Essar Steel India Ltd. (supra) has held that, Section 31 (1) of the Code of 2016 makes it clear that once a Resolution Plan is approved by the Committee of Creditors it shall be binding on all stakeholders, including creditors. It has held as follows:-
"105. Section 31(1) of the Code makes it clear that once a resolution plan is approved by the Committee of Creditors it shall be binding on all stakeholders, including guarantors. This is for the reason that this provision ensures that the successful resolution applicant starts running the business of the corporate debtor on a fresh slate as it were. In SBI v. V. Ramakrishnan [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 [LQ/SC/2018/994] : (2019) 2 SCC (Civ) 458], this Court relying upon Section 31 of the Code has held: (SCC p. 411, para 25)
"25. Section 31 of thewas also strongly relied upon by the respondents. This section only states that once a resolution plan, as approved by the Committee of Creditors, takes effect, it shall be binding on the corporate debtor as well as the guarantor. This is for the reason that otherwise, under Section 133 of the Contract Act, 1872, any change made to the debt owed by the corporate debtor, without the surety's consent, would relieve the guarantor from payment. Section 31(1), in fact, makes it clear that the guarantor cannot escape payment as the resolution plan, which has been approved, may well include provisions as to payments to be made by such guarantor. This is perhaps the reason that Annexure VI(e) to Form 6 contained in the Rules and Regulation 36(2) referred to above, require information as to personal guarantees that have been given in relation to the debts of the corporate debtor. Far from supporting the stand of the respondents, it is clear that in point of fact, Section 31 is one more factor in favour of a personal guarantor having to pay for debts due without any moratorium applying to save him."
106. Following this judgment in V. Ramakrishnan case [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 [LQ/SC/2018/994] : (2019) 2 SCC (Civ) 458], it is difficult to accept Shri Rohatgi's argument that that part of the resolution plan which states that the claims of the guarantor on account of subrogation shall be extinguished, cannot be applied to the guarantees furnished by the erstwhile Directors of the corporate debtor. So far as the present case is concerned, we hasten to add that we are saying nothing which may affect the pending litigation on account of invocation of these guarantees. However, NCLAT judgment being contrary to Section 31(1) of the Code and this Court's judgment in V. Ramakrishnan case [SBI v. V. Ramakrishnan, (2018) 17 SCC 394 [LQ/SC/2018/994] : (2019) 2 SCC (Civ) 458], is set aside.
107. For the same reason, the impugned NCLAT judgment [Standard Chartered Bank v. Satish Kumar Gupta] in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment must also be set aside on this count."
7. The Adjudicating Authority had accepted the Resolution Plan of the corporate debtor, that is the predecessor-in-interest of the defendant herein. The Resolution Plan has tabulated the liability of such corporate debtor. The plaintiff has not produced any document to establish that, the Resolution Plan approved in respect of the corporate debtor had the claim of the plaintiff's therein. The contentions of the plaintiff's that, the plaintiff's, subsequent to the death of the original plaintiff, was not aware of the insolvency proceedings in respect of the corporate debtor is of no consequence. In view of the ratio laid down in Committee of Creditors of Essar Steel India Ltd. (supra), the plaintiff's cannot be said to have a valid claim as against the defendant any longer and at least subsequent to the approval of Resolution Plan of the corporate debtor.
8. In a proceedings under Chapter XIIIA of the Original Side Rules the defendant is entitled to unconditional leave to defend the suit, in the event, the defendant establishes that it has a substantial defense to the claim. In the facts of the present case, the defense set up by the defendant on the basis of the ratio of Committee of Creditors of Essar Steel India Ltd. (supra), is substantial.
9. In such view, the application of the plaintiff's fail. IA GA No. 3 of 2012 Old GA 3369 of 2012 in CS 54 of 2012 is dismissed without any order as to costs.
