2019 (2) TMI 1639 - AT - Insolvency and Bankruptcy

Tribunal rules on Resolution Professional's jurisdiction & timely action under I&B Code

Prasad Gempex and Ors. Versus Star Agro Marine Exports Pvt. Ltd. and Ors.

The Tribunal held that the Resolution Professional lacked jurisdiction to decide creditor claims and directed timely action on approved resolution plans ... Whether the 'Resolution Professional' has jurisdiction to decide or reject the claim of one or other 'Financial Creditor' or 'Operational Creditor'? HELD THAT:- Similar issue fell for consideration before this Appellate Tribunal in 'M/s. Dynepro Private Limited' vs. Mr. V. Nagarajan [ 2019 (3) TMI 451 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI ]. The Appellate Tribunal has held that 'Resolution Professional has no jurisdiction to decide the claim of one or other creditor, including 'Financial Creditor', 'Operational Creditor', 'Secured Creditor' or 'unsecured Creditor'. Referring to sub-section (6) of Section 60 of the 'I&B Code', this Appellate Tribunal further observed that after completion of the period of moratorium, a suit or application can be filed against the 'Corporate Debtor'. Notwithstanding the order passed under Section 31 of the I&B Code (any existing law), it is open to a person to file a suit or an application against the 'corporate debtor' after completion of the period of moratorium. In the present case, it is informed that the 'resolution plan' has already been approved by the 'Committee of Creditors' and the 'Resolution Professional' had placed the same before the Adjudicating Authority on 4th October, 2018 in 'M/s. Prasad Gempex' with regard to the 'corporate insolvency resolution process' initiated against 'M/s. Star Agro Marine Exports Pvt. Ltd.' (subject matter of Company Appeal (AT) (Insolvency) No. 291/18). A 'resolution plan' has already been approved and placed before the Adjudicating Authority (Chennai) on 4th October, 2018. However, till date no order under Section 31 has been passed. We find that 270 days have passed - we direct the Adjudicating Authority (National Company Law Tribunal), Chennai to pass appropriate order under Section 31 of the I&B Code on the 'resolution plan' as approved by the 'Committee of creditors', if not yet passed, by 22nd February, 2019. We allow the appellant - 'M/s. Prasad Gempex' to file claim in terms of sub-section (6) of Section 60 before the appropriate court of law or may file appropriate application against the 'corporate debtor' namely 'M/s. Star Agro Marine Exports Pvt. Ltd.', if the 'resolution plan' is approved and do not take proper care of the applicant - appeal disposed off. Issues:1. Rejection of claim by Resolution Professional2. Jurisdiction of Resolution Professional to decide creditor claims3. Approval of resolution plan by Committee of Creditors4. Delay in passing order under Section 31 of the I&B CodeAnalysis:1. The appellant, M/s. Prasad Gempex, initially filed a claim as a Financial Creditor, which was rejected by the Resolution Professional. Subsequently, the appellant claimed to be an Operational Creditor, but this claim was also rejected. The appellant contended that their Expression of Interest was not considered by the Committee of Creditors, leading to an application being filed before the Adjudicating Authority, which was rejected.2. The key issue in both appeals was whether the Resolution Professional had the jurisdiction to decide or reject claims of Financial Creditors or Operational Creditors. The Tribunal referred to a previous judgment stating that the Resolution Professional lacks the authority to adjudicate on creditor claims and that after the moratorium period, suits can be filed against the Corporate Debtor.3. The Tribunal noted that the resolution plan for M/s. Star Agro Marine Exports Pvt. Ltd. had been approved by the Committee of Creditors and placed before the Adjudicating Authority, but no order under Section 31 had been passed within the stipulated time frame. A direction was issued for the Adjudicating Authority to pass the appropriate order on the resolution plan by a specified date.4. Regarding the delay in passing orders under Section 31 of the I&B Code, the Tribunal directed the Adjudicating Authority to ensure timely action on approved resolution plans. The appellant, M/s. Prasad Gempex, was allowed to file claims as per Section 60 and take appropriate steps based on the outcome of the resolution plan approval or liquidation order.5. The Tribunal clarified that it did not express any opinion on the claims made by the appellants, M/s. Prasad Gempex and SREI Infrastructure Finance Ltd., or the decisions of the Resolution Professional. Both appeals were disposed of with directions to the Adjudicating Authority, emphasizing the need for timely resolution plan approvals and actions under the I&B Code.