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 FIVE LAYERS LEGAL PROTECTION

 

 

1. Binding Nature of the Resolution Plan

 

The approved Resolution Plan, as recorded by this Hon’ble Tribunal at Para 178(i) (page 203 of 205), clearly mandates that the Plan “shall be binding on all stakeholders and shall be implemented strictly as per its terms.”

Further, the Plan itself (Clause 37) derives binding force under Section 31 of the Code.
Therefore, the Plan operates uniformly and cannot be selectively applied or interpreted to benefit only the Resolution Applicant.”

 

Further, under Section 31(1) of the Insolvency and Bankruptcy -IB Code, 2016, the approved plan attains statutory force and is binding on the Corporate Debtor, the Successful Resolution Applicant (SRA), and all creditors, including homebuyers.


MOST IMPORTANT -Thus, the Plan operates uniformly and is not confined to the benefit of the SRA alone (NCLT ORDER – FINAL DIRECTION).

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A) Page 203 of 205 | Para 178(i)

“The approved Resolution Plan… shall be binding on all the stakeholders of the Corporate Debtor… and shall be implemented strictly as per the term of the plan…

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KEY HIGHLIGHT

  • “binding on all the stakeholders

  • implemented strictly as per the term of the plan”

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B) Page 5 of 205 | Prayer Clause (2a)

“…declare that the same shall be binding on the Corporate Debtor and its employees, members, all creditors…”

 

KEY HIGHLIGHT

  • “all creditors” (includes homebuyers)

  • Not limited to SRA

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C) Page 119 of 148 | Clause 37 – Binding Effect

“This Resolution Plan once approved by NCLT shall be binding in accordance with section 31 of the Code.”

 

KEY HIGHLIGHT

  • Binding is statutory (Section 31)

  • Applies to all stakeholders

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ALL THESE PROVES 

  • Plan is binding on all stakeholders

  • Includes creditors (homebuyers)

  • Must be implemented strictly (no deviation)

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No Selective or One-Sided Application Permissible

(The Respondent cannot selectively rely on certain provisions of the Plan while disregarding others).

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A Resolution Plan:

  • must be implemented in its entirety, and

  • cannot be interpreted in a one-sided or unilateral manner.

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Any interpretation that benefits only the SRA while imposing additional burdens on homebuyers is legally unsustainable.

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2. EXTINGUISHMENT PLAN FOR PAST DUES –

 

A) Paras 17.7 & 17.8

Paras 17.7 and 17.8 of the Resolution Plan specifically deal with the treatment of homebuyers’ claims.

Notably:

  • The Plan does not provide any mechanism for continuation, computation, or recovery of pre-CIRP interest from homebuyers.

  • There is no clause permitting revival or reloading of such past components.

 

In a comprehensive and binding resolution framework, such absence is decisive.

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SILENCE IS INTENTIONAL= Extinguishment in effect

“The plan exhaustively deals with claims. Non-inclusion of pre-CIRP interest recovery from homebuyers amounts to its extinguishment in effect.”

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If pre-CIRP interest were intended to survive, the Plan would have expressly provided for its treatment.

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B) Pre-cirp Extinguishment in the plan

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Page 106–107 | Clause 34.33

“Any and all claims… including principal, interest, compound interest, penal interest…
in relation to any period prior to the Approval Date…
will be written off in full and shall be deemed to be permanently extinguished…” 

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Page 110–111 | Clause 34.49

“Any and all claims… including interest, compound interest, penal interest…
relating to any period prior to Approval Date…
will be written off in full and permanently extinguished…” 

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Page 71 | Supreme Court extract (Essar Steel principle)-CLEAN SLATE / FORWARD-LOOKING PRINCIPLE

“Resolution Applicant… must know exactly what has to be paid…
and proceed on a fresh slate…
cannot be faced with undecided claims later…” 

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ALL CLAIMS BEFORE APPROVAL = EXTINGUISHED

Page 105–106 | Clause 34.30–34.31

“Any claim… in relation to any period prior to Approval Date…
shall be deemed to be permanently extinguished…” 

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Court-ready argument:

“The Resolution Plan clearly extinguishes all pre-CIRP claims including interest (Clause 34.33, 34.49).
The plan operates on a ‘clean slate’ principle as upheld by the Supreme Court.
Therefore, it is forward-looking and does not permit any backward recovery of past interest from homebuyers.”

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KEY TAKEAWAY

✔ Pre-CIRP interest = extinguished
✔ Past liabilities = written off
✔ Plan = forward looking (clean slate)
❌ No backward recovery allowed

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 3) Committee of Creditors of Essar Steel v. Satish Kumar Gupta

(Extinguishment in Effect & Clean Slate Principle)

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The Plan extinguishes past liabilities against the Corporate Debtor to ensure a clean slate for the SRA.

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This necessarily implies:

  • Past claims cannot be indirectly revived, and

  • No component of pre-CIRP dues can be reintroduced in another form.

 

Clean Slate Principle: What is not preserved in the Plan stands extinguished in effect and cannot be recovered indirectly from homebuyers.

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“The Hon’ble Supreme Court has held that the Resolution Applicant must start on a clean slate (Plan = forward looking)
Permitting indirect recovery of past claims defeats the very objective of the CIRP.”

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 Principle:

  • Resolution Applicant gets a fresh start

  • No past liabilities should reappear indirectly

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4) Key Case- Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd.

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A. NCLT Order quoting Supreme Court (MOST USEFUL)

Page 98 of 148 and page 72 of 148 (NCLT Order)

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Refers to Para 95(i) of Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd.

Core principle used by NCLT):

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“Once a Resolution Plan is approved, a creditor cannot initiate proceedings for recovery of claims which are not part of the Resolution Plan.” 

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B.  Page 153 OF 205 (PARA 103 (95),  NCLT order)

Under sub section (1) of Section 31- On the date of approval of resolution plan by-

the Adjudicating Authority, all such claims, which are not a part of resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan; …..” (Emphasis Placed)

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C. FRESH SLATE/ CLEAN SLATE- PAGE 109 0F 205

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 Precise citation line

“While this Hon’ble Tribunal has held that the Resolution Plan is binding on all stakeholders and must be implemented strictly (Para 178(i)), the legal consequence of such approval is settled by the Hon’ble Supreme Court in Ghanashyam Mishra (Para 95(i)), which holds that all claims not forming part of the Plan stand extinguished. not recoverable.””

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“The NCLT order binds the Plan; the Supreme Court defines what that binding means.”

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This judgment clearly settles:

A). All pre-CIRP claims stand extinguished (if not in plan)

Supreme Court held that once a Resolution Plan is approved, all claims not part of the plan:

  • “Shall stand extinguished”

  • No person can continue or initiate proceedings for such claims

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B). Binding on ALL stakeholders

Under Section 31 of the Insolvency and Bankruptcy Code, 2016:

Plan binds:

  • Creditors

  • Government authorities

  • All stakeholders

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C). No recovery outside the plan

Any claim not included in the plan:

❌ Cannot be recovered later
❌ Cannot be revived in any form

 

“The Hon’ble Supreme Court in Ghanashyam Mishra has unequivocally held that upon approval of a Resolution Plan, all claims not forming part of the Plan stand extinguished and cannot be enforced. In the present case, the Plan does not provide for recovery of pre-CIRP interest from homebuyers. Therefore, any attempt to impose such liability amounts to revival of an extinguished claim, which is impermissible in law.”

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5) Financial Structure of the Plan (₹3,539 Crore Context)

The Resolution Plan is based on a comprehensive financial framework involving approximately ₹3,539 crore, which reflects the full and final resolution of claims within CIRP.

This demonstrates that:

  • All liabilities were factored and settled within the Plan, and

  • No external or additional recovery mechanism outside the Plan is contemplated.

 

Permitting any further recovery from homebuyers would disturb the financial equilibrium of the approved Plan and defeat its finality.

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 Final Structure:

  1. Paras 17.7–17.8 → no provision

  2. Section 31 → binding

  3. Clean slate → no revival

  4. ₹3,539 Cr → financial closure

  5. Ghanashyam Mishra → legal final nail

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FINAL SUBMISSION

In view of the above, it is respectfully submitted that:

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  1. The approved Resolution Plan, as recognized by this Hon’ble Tribunal, is binding on all stakeholders and is required to be implemented strictly in accordance with its terms, in line with Section 31(1) of the Insolvency and Bankruptcy Code, 2016.

  1. Paras 17.7 and 17.8 of the Resolution Plan specifically govern the treatment of homebuyers’ claims and do not provide for any continuation, computation, or recovery of pre-CIRP interest from homebuyers. In a comprehensive and binding resolution framework, the absence of such a provision is decisive.

  2. The Hon’ble Supreme Court in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. (Para 95(i)) has held that upon approval of a Resolution Plan, all claims not forming part of the Plan stand extinguished and cannot be enforced thereafter.

  3. The Resolution Plan is structured around an approved financial framework of approximately ₹3,539 crore, representing the full and final settlement of claims within the CIRP process. Any subsequent imposition of compounded pre-CIRP interest would amount to an impermissible double recovery of a settled component.

  4. Any attempt to impose such liability, whether termed as “recalculation” or otherwise, constitutes an indirect revival of extinguished claims, which is contrary to the binding nature, structure, and finality of the approved Resolution Plan.

“The Resolution Plan treats homebuyers as participants in value distribution, not as residual payers of extinguished liabilities.”

 

PRAYER

It is therefore most respectfully prayed that this Hon’ble Tribunal may be pleased to:

a) Declare that no pre-CIRP interest is recoverable from homebuyers in the absence of an express provision in the approved Resolution Plan;

b) Hold that any demand or action seeking to impose such liability is illegal, void, and unenforceable;

c) Direct the Respondent(s) to act strictly in accordance with the approved Resolution Plan, without imposing any additional financial burden not contemplated therein;

d) Pass such other and further orders as this Hon’ble Tribunal may deem fit in the interest of justice.

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COMPREHENSIVE – FIVE LAYERS OF LEGAL PROTECTION

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  1. Statutory Binding Force (Section 31):
    Upon approval, the Resolution Plan attains statutory force under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 and is binding on all stakeholders without exception. It must be implemented strictly and in its entirety, and cannot be interpreted selectively to impose obligations not contemplated in the Plan.

  2. Plan Text (Paras 17.7–17.8):Paras 17.7 and 17.8 of the Resolution Plan conclusively determine the treatment of homebuyers’ claims and contain no provision whatsoever for continuation, computation, or recovery of pre-CIRP interest. In a codified and binding resolution framework, such omission is determinative—what is not expressly preserved stands extinguished in effect.

  3. Clean Slate Doctrine (Supreme Court):
    The Hon’ble Supreme Court in Committee of Creditors of Essar Steel v. Satish Kumar Gupta has held that the Resolution Applicant proceeds on a clean slate, and past liabilities cannot be resurrected in any form. Any attempt to reintroduce pre-CIRP interest—whether directly or through compounding—violates this settled principle.

  4. Extinguishment of Non-Plan Claims (Ghanashyam Mishra):
    The Hon’ble Supreme Court in Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. (Para 95(i)) has unequivocally held that all claims not forming part of the approved Resolution Plan stand extinguished and cannot be enforced thereafter. In the absence of any provision in the Plan, pre-CIRP interest cannot survive.

  5. Financial Finality (₹3,539 Crore Structure):
    The Resolution Plan is structured around an approved financial outlay of approximately ₹3,539 crore, representing the final and comprehensive settlement of claims of creditors, including homebuyers, within CIRP. Any subsequent attempt to levy compounded pre-CIRP interest amounts to impermissible double recovery of a settled component, defeating the finality and sanctity of the approved Plan.

 

CONCLUSION

In light of the above five layers, any demand seeking recovery of pre-CIRP interest from homebuyers is ex facie contrary to the Resolution Plan, the binding mandate of Section 31, and settled law, and is liable to be set aside.

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IN SHORT  

“Paras 17.7–17.8 do not preserve it, Section 31 does not permit selective application, the clean slate doctrine forbids revival, Ghanashyam Mishra extinguishes it, and ₹3,539 crore settles it—there is no legal space left to charge pre-CIRP interest.”

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ONE LINE

“Not in the Plan (17.7–17.8), extinguished by law (Ghanashyam Mishra), binding under Section 31, and closed within ₹3,539 crore—there is no surviving claim.”

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TUPPLE LAND

TRANSFER 

PENALITY FOR AGONY AND MENTAL TORTURE OF HOMEBUYER AND FAMILY

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