2021 (7) TMI 1012 - Tri - Insolvency and Bankruptcy

Adjudicating Authority Orders Reevaluation of Claim by Resolution Professional

State Bank of India and Ors. Versus Tantia Constructions Limited

The Adjudicating Authority directed the Resolution Professional (RP) to reevaluate the applicant's claim, emphasizing the importance of diligently ... Seeking direction upon the RP to reconsider and reverify the claim submitted by the applicant, before approval of the Resolution Plan - Collation of claim by RP - HELD THAT:- This is a case where the RP himself was aware from the records that there was only one time supply of materials by the applicant and the monthly charge was towards the hiring cost of those materials. It is also admitted by the RP that the materials are still lying at the project site and have not been returned so far to the applicants - In this scenario, while the RP could not properly have paid the tax on the supply of goods without a proper tax invoice, there was nothing that prevented him from factoring in the basic rent in respect of the materials which are already technically under the corporate debtor's custody but physically lying within the Metro Railway Project site. The sheer anchor of the defence raised by the answering respondent is that once a Resolution Plan is approved all undecided claims are extinguished - the applicant has diligently pursued his claim for acceptance and collation by the RP and if it could not be taken up by this Adjudicating Authority before the approval of the resolution plan it cannot be said that the RP extinguishes all such claims. While those invoices which do not contain a signature cannot be accepted in so far as the tax component of the bill is concerned, there is nothing that prevented the RP from considering payment of the basic rent since the materials of the applicant were at all material times in the custody of the corporate debtor and being used at the site of the project awarded to the corporate debtor. Therefore, there is no doubt that the applicant was indeed entitled to the basic rent without his having to submit any proof other than the work order in this respect. The answering respondent is hereby directed to collate the claim of the applicant afresh on the basis of the observations and include it in the list of operational creditors from which payments will be made by the successful Resolution applicant. Application disposed off. Issues:- Consideration of claim by Resolution Professional- Duty of Resolution Professional under section 18 of the Code- Maintainability of the application- Collation and verification of claim by Resolution Professional- Extinction of claims post approval of Resolution PlanConsideration of claim by Resolution Professional:The case involved an application by a company against the Resolution Professional (RP) of another company seeking direction to reconsider and reverify a claim submitted before the approval of the Resolution Plan. The applicant had filed the claim, and despite providing requested information, the RP did not convey acceptance or rejection of the claim, leaving it 'pending for information.'Duty of Resolution Professional under section 18 of the Code:The applicant argued that under section 18 of the Code, the RP's duty is to accept and collate claims, not adjudicate them. The applicant cited legal precedents to support the contention that once a debt is proved, it cannot be reduced without proper adjudication.Maintainability of the application:The maintainability of the application was initially contested, but the Adjudicating Authority held it to be maintainable after due consideration. The matter proceeded to be argued on merits.Collation and verification of claim by Resolution Professional:The RP had accepted only a fraction of the claimed amount, citing issues with documentation and authentication of invoices. The RP argued that certain materials were still in possession of a third party, and only specific invoices were considered valid for payment.Extinction of claims post approval of Resolution Plan:The RP contended that post the approval of the Resolution Plan, all undecided claims are extinguished. However, the Adjudicating Authority disagreed, emphasizing that diligent pursuit of claims should not be prejudiced by the approval of a Resolution Plan.Final Decision:The Adjudicating Authority directed the RP to collate the applicant's claim afresh, considering the observations made regarding the validity of invoices and entitlement to basic rent. The Authority emphasized that the applicant's claim should be included in the list of operational creditors for payment by the successful Resolution applicant.This detailed analysis of the judgment covers the issues involved comprehensively, outlining the arguments presented by both parties and the final decision rendered by the Adjudicating Authority.