Appeal allowed in Liquidator's interest claim rejection case under Insolvency and Bankruptcy Code

The Tribunal allowed the appeal in a case concerning the rejection of a claim towards interest by the Liquidator under the Insolvency and Bankruptcy Code. Emphasizing the quasi-judicial nature of the Liquidator's role, the Tribunal directed the Liquidator to make a reasoned decision on the claim within 30 days. It highlighted the importance of providing clear reasons for accepting or rejecting claims, particularly when disputes are pending in other proceedings. The decision stressed the necessity for adherence to procedural rules in determining creditor claims under the IBC.

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Issues:
Appeal under section 42 of Insolvency and Bankruptcy Code, 2016 regarding rejection of claim towards interest amount by Liquidator.

Analysis:
The appellant, a creditor of the Corporate Debtor, filed an appeal against the Liquidator's order dated 21.12.2018, rejecting a portion of the claim amounting to interest. The Liquidator admitted the claim provisionally, citing that the disputed amount was subject to an ongoing arbitral proceeding. The appellant argued that the Liquidator should either admit or reject the claim entirely, relying on the Supreme Court ruling in Swiss Ribbons Pvt. Ltd.-vs- Union of India. The Liquidator contended that the interest and other charges were disputed and pending arbitration, hence the claim could not be fully determined at that stage.

The Tribunal deliberated on whether the Liquidator's order admitting the claim provisionally required interference. Referring to the Swiss Ribbons case, it emphasized the quasi-judicial nature of the Liquidator's determination of claims under the IBC. The Tribunal noted the absence of a reasoned order from the Liquidator accepting or rejecting the claim, highlighting the necessity for providing reasons for such decisions. Despite the Liquidator's assertion that the claim was subject to arbitration, the Tribunal found that the Liquidator had not made a definitive determination on the claim, which was deemed essential in his quasi-judicial role.

Consequently, the Tribunal allowed the appeal, remitting the matter back to the Liquidator for a reasoned decision on the appellant's claim within 30 days. The Tribunal emphasized the importance of complying with the rules in determining the claim and directed the Liquidator to provide a certified copy of the order to all concerned parties upon application.

In conclusion, the Tribunal's decision underscored the requirement for the Liquidator to provide a reasoned order when admitting or rejecting claims, especially in cases where disputes are pending in other proceedings. The quasi-judicial nature of the Liquidator's role necessitates a thorough assessment and clear communication of decisions regarding creditor claims under the IBC.

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