Tribunal orders GM to submit documents for salary claim review by RP under Insolvency & Bankruptcy Code

The Tribunal directed the applicant, a General Manager of the Corporate Debtor, to submit requested documents within two weeks for reconsideration of his salary claim by the Resolution Professional (RP) under the Insolvency and Bankruptcy Code. The RP's verification role was emphasized, and the RP was instructed to provide a reply before finalizing the Resolution Plan. The Tribunal disposed of the application with these directions, ensuring the applicant's opportunity to substantiate his claim and addressing issues of claim rejection and natural justice.

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Issues Involved:
1. Rejection of the applicant's salary claim by the Resolution Professional (RP).
2. Alleged violation of principles of natural justice by the RP.
3. Verification and adjudication of claims by the RP under the Insolvency and Bankruptcy Code, 2016.

Issue-wise Detailed Analysis:

1. Rejection of the Applicant's Salary Claim by the Resolution Professional (RP):

The applicant, a General Manager (Finance) of the Corporate Debtor, filed a claim for salary and allowances amounting to Rs. 3,09,45,200, which was rejected by the RP. The applicant argued that his salary was increased from Rs. 1,05,000 to Rs. 12,05,000 per month effective from 01st April 2016. He submitted the necessary documents, including bank statements and income tax returns, to substantiate his claim. However, the RP, based on the records and internal information, concluded that the applicant's salary was revised back to Rs. 1,05,000 per month from January 2018 based on instructions from the suspended Managing Director. Consequently, the RP recomputed the salary and allowances payable to the applicant, which amounted to Rs. 91,10,085. After setting off an advance of Rs. 1,11,08,088 shown in the ledger, the RP determined a net balance of Rs. 19,98,003 to be returned by the applicant to the Corporate Debtor.

2. Alleged Violation of Principles of Natural Justice by the RP:

The applicant contended that the RP violated the principles of natural justice by not providing an opportunity to substantiate his claim as required under Regulation 10 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The applicant claimed that he had not received any communication from the RP regarding the status of his claim and was not given a chance to present additional documents or explanations. The applicant's counsel argued that the RP's actions were arbitrary and in violation of the principles laid down by the Supreme Court regarding the exercise of quasi-judicial powers.

3. Verification and Adjudication of Claims by the RP under the Insolvency and Bankruptcy Code, 2016:

The RP refuted the applicant's allegations, stating that the applicant had concealed his status as a shareholder of the Corporate Debtor. The RP explained that due to the inoperative status of the Corporate Debtor since July 2019, verification of claims was delayed. Upon reinstatement of electricity and retrieval of financial information, the RP verified all claims, including the applicant's, and published the details on the website. The RP emphasized that his role was limited to verifying and determining claims based on available information and that he did not possess adjudicatory powers. The RP also highlighted that the applicant failed to submit the requested bank statements and other documents to substantiate his claim.

Judgment:

The Tribunal considered the submissions and verified the records. It noted that the applicant's claim lacked clarity regarding the salary revision and monthly credits. The Tribunal directed the applicant to submit the requested documents within two weeks. The RP was instructed to reconsider the claim based on the submitted documents and provide a reply before finalizing the Resolution Plan. The Tribunal disposed of the application with these directions.

Conclusion:

The Tribunal's judgment addressed the issues of claim rejection, natural justice, and the RP's verification role under the Insolvency and Bankruptcy Code. The applicant was given an opportunity to submit additional documents, and the RP was directed to reconsider the claim based on the new evidence.

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