Resolution Plan Approved, but You Have Not Received Your Payment: What Can Creditors Do?
A company’s resolution plan has received approval, but you still have not received your payment. What can you do next? The answer depends on the approved plan, your rights as a creditor, and the stage of implementation.
The approval of a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC) does not always mean that creditors receive their money immediately. The successful resolution applicant must implement the plan according to its terms. If payment remains pending, creditors should review the plan and identify the available legal remedies.
1. What Happens After the NCLT Approves a Resolution Plan?
When the National Company Law Tribunal (NCLT) approves a resolution plan under Section 31 of the IBC, the plan becomes binding on the corporate debtor and the stakeholders covered by the law.
The successful resolution applicant must follow the approved plan. This includes meeting payment obligations and other conditions within the specified timelines.
However, delays may occur. The applicant may miss a payment deadline, dispute the amount due, or fail to complete a required step.
If you face such a delay, do not rely on verbal assurances alone. Read the approved plan and check the payment schedule, conditions, and obligations that apply to your claim.
2. Why Has the Resolution Applicant Not Paid You?
Several issues may explain the delay:
- Missed payment deadline: The applicant has not paid by the date specified in the plan.
- Disputed claim amount: The applicant disputes the amount payable to you.
- Unfulfilled conditions: A condition in the plan remains incomplete.
- Implementation problems: The applicant has delayed another step required to release payment.
- Communication gaps: You have not received a clear update about the payment.
Identify the reason before deciding your next step. Your legal options will depend on the wording of the approved plan and the facts of your case.
3. What Should Creditors Check in the Approved Resolution Plan?
Start by obtaining a copy of the NCLT-approved resolution plan, if you do not already have one. Then check these key details:
- The amount the plan provides for your claim.
- The payment deadline and payment method.
- Any conditions linked to payment.
- The treatment of your category of creditor.
- The process for raising disputes or seeking clarification.
- Any provisions dealing with default or delayed implementation.
Compare these terms with the payment you have received, if any. Keep a written record of the outstanding amount and the dates on which payment fell due.
4. What Legal Steps Can You Take for Delayed Payment?
If the resolution applicant misses a payment deadline, take practical steps to protect your position.
Step 1: Send a written request.
Write to the resolution applicant or the designated contact. State the amount due, the relevant payment deadline, and the clause in the approved plan that supports your claim. Ask for a clear payment date.
Step 2: Preserve your evidence.
Keep the approved plan, NCLT order, claim records, payment statements, emails, letters, and reminders. These documents can help establish the amount due and the delay.
Step 3: Review the applicable legal remedy.
A lawyer can examine the approved plan and the nature of the default. Depending on the facts, you may need to seek appropriate relief from the NCLT or consider another remedy permitted by law.
Do not assume that every payment dispute follows the same procedure. The right approach depends on the plan, the type of creditor, and the circumstances of the default.
5. Can You Approach the NCLT if the Resolution Applicant Defaults?
The NCLT may have a role in disputes concerning the implementation of an approved resolution plan. However, the correct application and relief depend on the facts and the legal basis for your claim.
Before approaching the tribunal, gather the relevant documents and identify the precise obligation that the applicant has failed to meet. Explain how the delay affects your rights under the approved plan.
Seek legal advice promptly, especially if the dispute involves a substantial amount or an approaching deadline. A focused application supported by clear records can help present your case effectively.
6. What If You Are a Financial Creditor, Operational Creditor, or Employee?
The approved plan may treat different categories of creditors differently. Your rights therefore depend on your status and the terms that apply to your claim.
- Financial creditors: Review the payment and treatment provisions that apply to your admitted claim.
- Operational creditors: Check the amount and timeline that the plan provides for your category.
- Employees and workmen: Review the provisions dealing with salary, wages, and other employment-related dues.
- Other affected stakeholders: Check whether the plan recognises your claim and sets out a payment obligation.
Do not assume that another creditor’s payment terms also apply to you. Read the provisions relevant to your category before taking action.
7. What Documents Should You Keep?
Prepare a file containing:
- The NCLT order approving the resolution plan.
- The relevant portions of the approved plan.
- Your claim form and supporting records.
- Any communication confirming the amount payable.
- Bank statements showing payments received.
- Emails and letters requesting payment.
- A calculation of the outstanding amount.
- Any response explaining the delay or refusing payment.
Organise these documents by date. A clear timeline can help your lawyer assess the default and identify the next step.
8. How Can Lex Pleaders & Co. Help Creditors?
Lex Pleaders & Co. assists creditors in reviewing insolvency-related disputes and assessing possible legal remedies. Our team can examine the approved resolution plan, identify payment obligations, review communications, and help prepare a suitable legal response.
We can also assess whether the facts support an application before the NCLT or another lawful course of action. The appropriate strategy will depend on the documents and the circumstances of the case.
Has the NCLT approved a resolution plan, but you are still waiting for payment? Contact Lex Pleaders & Co. to discuss your situation and understand your options.
Learn more about our firm and legal services on the lexpleaders.com
Conclusion
An approved resolution plan should not leave creditors uncertain about when they will receive payment. If the resolution applicant misses a deadline, review the plan, document the delay, and seek a clear explanation.
Act promptly and obtain legal advice when necessary. A careful review of the approved plan and the available evidence can help you decide the appropriate next step.