Tribunal Directs CoC Payment, IFCI Dispute Resolved, Liquidator Guidelines Issued

The Tribunal directed CoC members to pay outstanding CIRP expenses and liquidation costs promptly. IFCI's status as a Financial Creditor was disputed, leading to a directive to deposit the disputed amount in an interest-bearing account pending resolution. The Tribunal noted the Liquidator's bypassing of the SCC but provided guidance for future proceedings. The respondents were given 15 days to pay, and IFCI was directed to deposit the disputed amount. The Tribunal's decision aimed at facilitating the resolution of financial obligations in the insolvency process.

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Issues Involved:
1. Payment of CIRP expenses and liquidation costs by the CoC members.
2. Dispute regarding the inclusion of IFCI as a Financial Creditor in the CoC.
3. Liquidator's approach to the Tribunal without exhausting remedies with the SCC.

Issue-wise Detailed Analysis:

1. Payment of CIRP expenses and liquidation costs by the CoC members:

The Liquidator, Mr. Yogesh Gupta, filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the CoC members to pay Rs. 30,75,108.00 towards CIRP expenses and Rs. 24,17,745.00 for liquidation costs outstanding since 04/10/2019. Despite repeated demands via emails, the CoC members failed to pay the substantial amount due. The Liquidator stressed the urgency for these payments to meet obligations towards valuers and insolvency professionals. The Tribunal noted that the respondents had not disputed their obligation to meet the Liquidator's requirements for smooth continuation of the liquidation process. The Tribunal directed that upon satisfying the balance amount payable by the respondents, the payments should be made within 15 days of verification of records submitted by the Liquidator.

2. Dispute regarding the inclusion of IFCI as a Financial Creditor in the CoC:

IFCI contested its inclusion in the CoC, arguing that it is not a Financial Creditor and hence not liable to contribute to CIRP costs. The CoC itself had doubts about IFCI's status and had sought clarification from the Tribunal. The Tribunal noted that the dispute regarding IFCI's status as a Financial Creditor was pending adjudication. Therefore, IFCI was directed to deposit the disputed amount in an interest-bearing account until the resolution of the dispute. If IFCI is eventually found to be a Financial Creditor, the amount, along with interest, will be utilized for CIRP/Liquidation costs; otherwise, it will be refunded.

3. Liquidator's approach to the Tribunal without exhausting remedies with the SCC:

The Tribunal observed that the Liquidator approached it without calling for a Stakeholders Constitution Committee (SCC) meeting to resolve the funding issues. The Tribunal noted that the Liquidator should have first attempted to resolve the issues with the CoC harmoniously. Despite this procedural lapse, the Tribunal did not dismiss the application but provided directions to ensure justice.

Directions:

i) The respondents (R1, R3, and R5) are to pay the balance amount within 15 days of record verification by the Liquidator.
ii) IFCI (R4) is directed to deposit the disputed amount in an interest-bearing account within 15 days.
iii) The amount will remain in the account until the interim applications regarding IFCI's inclusion in the CoC are resolved.
iv) Depending on the outcome, the amount will either be used for CIRP/Liquidation costs or refunded to IFCI with interest.

The Tribunal disposed of the application accordingly and directed the Registry to send email copies of the order to all parties. Certified copies will be issued upon compliance with requisite formalities.

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