2020 (5) TMI 291 - AT - Insolvency and Bankruptcy

Interim resolution professional duties clarified under Insolvency and Bankruptcy Code, 2016

JET AIRWAYS (INDIA) LTD. Versus STATE BANK OF INDIA AND ANOTHER

The judgment clarifies the duties of the interim resolution professional under the Insolvency and Bankruptcy Code, 2016, emphasizing the collection of ... Duties of IRP - collation of claims of 'financial creditors', 'operational creditors', etc., both domestic and international - control and custody of all the assets over which the 'corporate debtor' has ownership rights - HELD THAT:- In view of such duties empowered on the 'interim resolution professional', he is required to collate the claim of all 'offshore creditors' or take control and custody of the assets of the 'corporate debtor' situated outside India (in Holland) or other places, but for giving it effect the 'resolution professional' is required to reach an arrangement/agreement with the administrator appointed pursuant to the proceeding initiated at Holland. The question as to whether the 'committee of creditors' have any role to play is left open for decision at appropriate stage/in an appropriate case but for the present, we allow the 'committee of creditors' to guide the 'resolution professional' to enable him to prepare a (draft) agreement showing the terms and conditions to take up the matter with the administrator of Holland for his consent. Post the case for 'orders' on September 20, 2019 at 12.00 noon on the top of the list. Issues:1. Duties of the interim resolution professional under the Insolvency and Bankruptcy Code, 2016.2. Control and custody of assets of the corporate debtor situated outside India.3. Role of the committee of creditors in such matters.Analysis:1. The judgment addresses the duties of the interim resolution professional under section 18 of the Insolvency and Bankruptcy Code, 2016. It emphasizes that upon initiation of the corporate insolvency resolution process, the interim resolution professional is mandated to collate the claims of financial creditors, operational creditors, etc., both domestic and international. Furthermore, the professional is required to take control and custody of all assets owned by the corporate debtor as recorded in various documents, including the balance-sheet of the corporate debtor, information utility, depository of securities, or any other registry documenting asset ownership.2. The judgment specifically deals with the scenario where assets of the corporate debtor are situated outside the country. In such cases, the interim resolution professional can only take control and custody of these offshore assets after reaching an arrangement with the Administrator of the offshore regional hub. The resolution professional is tasked with collating the claims of offshore creditors and ensuring the assets situated abroad are appropriately managed in accordance with the provisions of the Insolvency and Bankruptcy Code.3. Regarding the role of the committee of creditors in these matters, the judgment leaves this question open for decision at a later stage or in a different case. However, for the current situation, the committee of creditors is permitted to guide the resolution professional in preparing a draft agreement outlining the terms and conditions for engaging with the administrator of Holland. If the draft agreement is accepted by the Administrator of Holland, it is to be presented before the Appellate Tribunal for further consideration and approval. The resolution professional is directed to submit the draft agreement within a specified timeframe for review.In conclusion, the judgment provides clarity on the duties of the interim resolution professional, the process of managing offshore assets of the corporate debtor, and the involvement of the committee of creditors in such situations, ensuring compliance with the Insolvency and Bankruptcy Code, 2016.