Tribunal upholds Adjudicator's directions on claim reconsideration during moratorium under Insolvency and Bankruptcy Code.

The Tribunal dismissed the appeal, upholding the Adjudicating Authority's directions to the Resolution Professional to reconsider the claim and adjust EMIs received during the moratorium against the Applicant's claim. The Tribunal emphasized compliance with the moratorium provisions under Section 14 of the Insolvency and Bankruptcy Code, 2016, and the importance of preserving the Corporate Debtor's assets. Despite a dissenting opinion calling for a full hearing, the majority decision supported the original directives.

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Issues Involved:
1. Reconsideration of the claim submitted by the Applicant/Financial Creditor.
2. Treatment of EMIs received by the Financial Creditor during the moratorium period.
3. Condonation of delay in filing the appeal due to COVID-19 pandemic.
4. Preferential treatment to creditors during the moratorium period.
5. Compliance with the moratorium provisions under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC, 2016).

Detailed Analysis:

1. Reconsideration of the Claim Submitted by the Applicant/Financial Creditor:
The Appellant challenged the direction issued by the Adjudicating Authority to the Resolution Professional (R.P.) to reconsider the claim submitted by the Applicant/Financial Creditor as per the provisions of the Code and Regulations. The Tribunal clarified that this direction is a general instruction for the R.P. to act in accordance with the rules and regulations, and thus, no appeal lies against such a direction.

2. Treatment of EMIs Received by the Financial Creditor During the Moratorium Period:
The Adjudicating Authority directed that the EMIs received by the Financial Creditor during the moratorium period should be adjusted against the claim of the Applicant, with the remaining loan amount to be verified and admitted by the R.P. The Appellant argued that this adjustment violated the moratorium order under Section 14 of the IBC, 2016, which prohibits any action to foreclose, recover, or enforce any security interest during the moratorium period. The Tribunal noted that the deduction of EMIs from the Corporate Debtor’s account during the moratorium was in violation of the moratorium order and upheld the adjustment directive.

3. Condonation of Delay in Filing the Appeal Due to COVID-19 Pandemic:
The Appellant filed an application for condonation of delay, citing the unprecedented situation arising from the COVID-19 pandemic and lockdown restrictions. The Tribunal accepted the Appellant’s contention that the delay was due to the inability to obtain a certified copy of the impugned order in time and found the appeal to be within the limitation period.

4. Preferential Treatment to Creditors During the Moratorium Period:
The Appellant contended that the impugned order gave preferential treatment to the Respondent No. 1 by allowing the amount received through ECS during the moratorium to be adjusted against its claim. The Tribunal emphasized that the moratorium under Section 14 of the IBC, 2016, prohibits any preferential treatment to any creditor and maintains the integrity of the Corporate Debtor’s assets. The Tribunal referred to the Supreme Court’s judgment in Rajendra K. Bhutta vs. Maharashtra Housing and Area Development Authority, which underscored the importance of maintaining the status quo of the Corporate Debtor’s assets during the moratorium period.

5. Compliance with the Moratorium Provisions Under Section 14 of the IBC, 2016:
The Tribunal reiterated that Section 14 of the IBC, 2016, imposes a moratorium that prohibits any action to foreclose, recover, or enforce any security interest created by the Corporate Debtor. The Tribunal found that the deduction of EMIs during the moratorium period was a violation of this provision and upheld the Adjudicating Authority’s order to adjust the EMIs against the claim.

Separate Judgment by Dr. Alok Srivastava:
Dr. Alok Srivastava, Member (Technical), differed from the majority view and opined that a prima facie case existed for a full hearing. He emphasized the importance of maintaining the integrity of the moratorium and providing a fair chance for both the Appellant and Respondents to present their cases. He suggested issuing notices to the Respondents and conducting a detailed hearing before making a final decision.

Conclusion:
The Tribunal dismissed the appeal, affirming the Adjudicating Authority’s directions to the R.P. to reconsider the claim and adjust the EMIs received during the moratorium against the Applicant’s claim. The Tribunal emphasized the importance of adhering to the moratorium provisions under Section 14 of the IBC, 2016, and maintaining the integrity of the Corporate Debtor’s assets. Dr. Alok Srivastava’s dissenting opinion highlighted the need for a detailed hearing to ensure a fair and judicious decision.

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