Applicant's Financial Creditor Status Rejected, Liability Dispute Resolved

The Tribunal rejected the Applicant's request to be classified as a Financial Creditor under Section 60 of the IB Code due to discrepancies and lack of supporting documentation. The claim for &8377; 16,35,25,444/- was disputed, with the Respondent acknowledging liability only for &8377; 5 Crores. Despite the rejection, the acknowledged liability was accepted as a claim other than Operational or Financial Creditor for consideration by the Interim Resolution Professional. The decision was based on the inconsistencies and insufficiency of evidence presented by the Applicant.

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Issues: Classification of Applicant as Financial Creditor under Section 60 of IB Code.

Detailed Analysis:

Issue 1: Classification of Applicant as Financial Creditor
The case involved an application under Section 60 of the Insolvency and Bankruptcy Code, 2016, seeking classification of the Applicant as a Financial Creditor. The Financial Creditor, Indian Overseas Bank, initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, which was admitted by the Adjudicating Authority. The Applicant submitted a claim of &8377; 16,35,25,444/- along with documents, but the Respondent disputed the claim, acknowledging liability only for &8377; 5 Crores and denying the status of the Applicant as a Financial Creditor.

Issue 2: Dispute Over Loan Disbursement
The Respondent denied the Applicant's claim, citing lack of agreement, balance sheet, or board resolutions authorizing the loan disbursement in compliance with relevant provisions of the Companies Act, 2013. The Books of Account of the Corporate Debtor reflected an amount of &8377; 5 Crores only, leading the Respondent to request the Applicant to file Form-F for claims other than Operational and Financial creditors.

Issue 3: Examination of Documentary Evidence
Upon examination of the documentary evidence provided by the Applicant, discrepancies were found regarding the date of disbursement of the loan. The ledger account showed cheques dated 24.10.2007, totaling &8377; 10 Crores, but a demand notice dated 30.11.2018 indicated a different amount. The documents submitted were contradictory, raising doubts about the authenticity and bonafide of the Applicant's claim.

Issue 4: Lack of Supporting Documentation
The Applicant failed to produce essential documents such as agreements, promissory notes, board resolutions, or conclusive evidence of the loan disbursement amounting to &8377; 16,35,25,444/-. The absence of proper documentation and discrepancies in the submitted materials weakened the credibility of the Applicant's claim.

Issue 5: Rejection of Claim
Considering the inconsistencies, lack of supporting documentation, and doubts surrounding the claim, the Tribunal rejected the Applicant's application to be classified as a Financial Creditor. However, the acknowledged liability of &8377; 5 Crores by the Corporate Debtor was deemed admissible as a claim other than Operational or Financial Creditor, to be considered by the Interim Resolution Professional.

In conclusion, the Tribunal dismissed the application due to the lack of conclusive evidence, discrepancies in documentation, and failure to meet the legal requirements for establishing the Applicant as a Financial Creditor under the Insolvency and Bankruptcy Code.

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