Tribunal Validates Claim in Dispute, Rejects RP's Decision as Null & Void

The Tribunal deemed the unregistered sale agreement and claim acknowledgment letter admissible as evidence, validating the Applicant's claim of Rs. 15,00,00,000 against the Corporate Debtor. The Resolution Professional's rejection of the claim was found to lack substantiated grounds and was declared null and void. It was clarified that the Resolution Professional's role is administrative, not adjudicatory. Compliance with the Companies Act and Registration Act requirements was considered, with emphasis on the admissibility of the documents for proving the financial transaction. The Tribunal directed equal treatment of the Applicant with other unsecured creditors or reconstitution of the Committee of Creditors.

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Issues Involved:

1. Admissibility of the unregistered sale agreement dated 02.08.2016 and claim acknowledgment letter dated 02.08.2016 as evidence.
2. Validity of the Resolution Professional's rejection of the Applicant's claim.
3. Authority of the Resolution Professional in adjudicating claims.
4. Compliance with the Companies Act and Registration Act requirements.

Issue-Wise Detailed Analysis:

1. Admissibility of the Unregistered Sale Agreement and Claim Acknowledgment Letter:

The primary issue was whether the unregistered sale agreement dated 02.08.2016 and the claim acknowledgment letter dated 02.08.2016 could be admitted as evidence despite not being recorded in the Corporate Debtor's books. The Tribunal referred to Section 49 of the Registration Act, 1908, which allows an unregistered document to be received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. The Tribunal also cited the judgment of the Madras High Court in N. Muthukumar vs M. Karupapiah, which held that an unregistered sale agreement could be admitted as evidence for collateral purposes. The Tribunal concluded that the sale agreement and claim acknowledgment letter were sufficiently stamped and admissible as evidence for proving the payment of Rs. 15,00,00,000 by the Applicant to the Corporate Debtor.

2. Validity of the Resolution Professional's Rejection of the Applicant's Claim:

The Resolution Professional rejected the Applicant's claim on the grounds of lack of documentary evidence, cash payments, absence of a duly signed loan agreement, and no entry in the financial statements. The Tribunal noted that the sale agreement and claim acknowledgment letter, signed by the Managing Director and Director of the Corporate Debtor, acknowledged the payment of Rs. 15,00,00,000. The Tribunal found that the reasons given by the Resolution Professional and the suspended Directors were not substantiated by any documentary evidence. The Tribunal held that the claim of the Applicant for Rs. 15,00,00,000 was admissible based on the sale agreement and claim acknowledgment letter.

3. Authority of the Resolution Professional in Adjudicating Claims:

The Tribunal emphasized that the Resolution Professional does not have adjudicatory power to decide the issue pertaining to claims. The role of the Resolution Professional is to vet and verify claims and determine the amount of each claim. This position was supported by the Supreme Court judgment in Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India & Ors., which clarified that the Resolution Professional's function is administrative and not judicial. The Tribunal concluded that the Resolution Professional's rejection of the Applicant's claim was beyond his authority and thus null and void.

4. Compliance with the Companies Act and Registration Act Requirements:

The Tribunal examined the compliance with the Companies Act, 2013, and the Registration Act, 1908. The Resolution Professional argued that the sale agreement was void under Section 180 of the Companies Act, as it involved the sale of a substantial asset without a special resolution. The Tribunal, however, focused on the admissibility of the unregistered document for proving the financial transaction. The Tribunal also noted that the sale agreement was sufficiently stamped as per the Indian Stamp Act, 1899, and thus admissible for collateral purposes. The Tribunal dismissed the argument that the absence of a Board Resolution and proper audit records could invalidate the Applicant's claim, emphasizing that the Directors' signatures and the Corporate Debtor's seal on the documents indicated their authority.

Conclusion:

The Tribunal held that the Applicant's claim for Rs. 15,00,00,000 was valid and admissible based on the sale agreement and claim acknowledgment letter. The rejection of the claim by the Resolution Professional was declared null and void. The Tribunal directed the Resolution Professional to treat the Applicants at par with other unsecured financial creditors and make appropriate provisions for payment, or to withdraw the Resolution Plan and reconstitute the Committee of Creditors (COC) afresh. The Application MA/518/2018 was disposed of with no order as to costs.

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