2019 (12) TMI 1512 - AT - Companies Law

Appellant's Claim of Secured Creditor Status Denied for Lack of Security Interest

The Appellant, classified as an 'unsecured financial creditor,' claimed 'secured creditor' status based on movable properties. The Resolution Professional ... Non-speaking order - unsecured financial creditor or not - HELD THAT:- The ‘Resolution Professional’ and the ‘Committee of Creditors’ noticed that the Appellant’s claim of ‘Secured Creditor’ rests on movable properties and not on any immoveable properties as there is no security interest on immovable properties and pledge in respect of immoveable properties cannot be claimed. The ‘Resolution Professional’ and the ‘Committee of Creditors’ held that the Appellant - ‘Financial Creditor’ is not a ‘secured creditor’. Whether the Appellant is a ‘secured creditor’ or not, is a question of fact and it can be decided by the ‘Resolution Professional’ and any decision further can be taken by the ‘Committee of Creditors’. The Adjudicating Authority (National Company Law Tribunal) or ‘National Company Law Appellate Tribunal’ cannot sit over the decision of the ‘Resolution Professional’ or ‘Committee of Creditors in this regard. Appeal dismissed. Issues:- Appellant treated as 'unsecured financial creditor'- Rejection of the application by the Adjudicating Authority- Claim of 'Secured Creditor' based on movable properties- Decision on the status of the Appellant as a 'secured creditor'- Jurisdiction of Adjudicating Authority and National Company Law Appellate TribunalAnalysis:The judgment revolves around the grievance of the Appellant, who was classified as an 'unsecured financial creditor' by the Resolution Professional. The Appellant's application before the Adjudicating Authority was rejected, leading to the appeal. The Appellant contended that the impugned order lacked reasoning, as the Adjudicating Authority deferred providing a detailed explanation.Upon review, it was established that the Appellant's claim as a 'Secured Creditor' was primarily based on movable properties, not immovable ones. The Resolution Professional and Committee of Creditors determined that the Appellant, a 'Financial Creditor,' did not hold the status of a 'secured creditor' due to the absence of security interest in immovable properties. This decision was deemed factual and within the purview of the Resolution Professional and Committee of Creditors, precluding interference by the Adjudicating Authority or National Company Law Appellate Tribunal.The judgment emphasized that the determination of whether the Appellant qualifies as a 'secured creditor' is a matter of fact, falling under the jurisdiction of the Resolution Professional and the Committee of Creditors. Neither the Adjudicating Authority nor the National Company Law Appellate Tribunal can override the decisions made by the Resolution Professional and Committee of Creditors in this context. Consequently, the appeal was dismissed, with no costs imposed, based on the aforementioned considerations.