2022 (4) TMI 524 - Tri - Insolvency and Bankruptcy

Resolution Professional directed to include full claim amount in records, ensuring transparency and accuracy in insolvency proceedings

Interocean Navigation Ltd. Versus Trupal Kumar Patel, RP of Alcock Ashdown (Gujarat) Ltd.

The Tribunal held that the Resolution Professional erred in admitting the claim for a nominal amount of Rs. 1 instead of the full decretal amount of Rs. ... Admission of claim of applicant, as Operational Creditor - stay on further process of CIRP of the Corporate Applicant - HELD THAT:- It is an admitted fact that the Corporate Debtor had entered into an agreement with Applicant in around 1997 and when the dispute had arisen under the said contract, the Applicant had filed a suit before Ld. Senior Civil Judge, Bhavnagar in 1999. The Ld. Senior Civil Judge, Bhavnagar after adjudication of the matter passed a decree followed by a judgment in 2015 in favour of the Applicant. It is noted that the Corporate Debtor had filed a counter claim before the Ld. Senior Civil Judge, Bhavnagar however the same was rejected while passing decree. Being aggrieved by the decree, the Corporate Debtor approached the Hon'ble High Court - During the pendency of the appeal and execution proceeding the Corporate Debtor filed an application under Section 10 of the Code for initiation of CIRP of itself in 2019. It is noted that in the Section 10 Application the order was passed on 08.03.2021 initiating CIRP against Corporate Debtor. When the IRP had issued a demand notice dated 24.03.2021 on the Applicant for ₹ 17,15,703/-, the Applicant apprised the RP about the decree and pendency of appeal before Hon'ble High court and execution proceeding. The Resolution Professional has errored in registering the claim of the Applicant at a notional value of ₹ 1 but should have admitted the entire decretal amount of ₹ 21,79,88,328.04 (₹ 7,39,31,941/- plus interest at 9% p.a. and cost of suit) in terms of the Decree passed by the Learned Senior Civil Judge, Bhavnagar - Application allowed. Issues:1. Admission of claim by Resolution Professional under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.2. Dispute regarding the quantification of the claim amount and the impact of pending legal proceedings on the claim.3. Correctness of admitting the claim at a notional value of Rs. 1 by the Resolution Professional.Issue 1: Admission of Claim by Resolution ProfessionalThe case involved an application by Interocean Navigation Ltd. seeking directions against the Resolution Professional of Alcock Ashdown (Gujarat) Ltd. The Applicant requested the Adjudicating Authority to admit its claim as an operational creditor. The Resolution Professional initially rejected the claim but later considered it for a nominal amount of Rs. 1 based on the judgment in Essar Steel India Ltd., CoC vs. Satish Gupta & Ors.Issue 2: Dispute Regarding Claim QuantificationThe Applicant had filed a civil suit in 1999 claiming compensation from the Corporate Debtor, which was granted in its favor in 2015. The Corporate Debtor appealed to the High Court, and the matter was pending. The Resolution Professional argued that due to the pending appeal, the claim amount was not finalized. However, the Tribunal noted that the claim had reached finality as per the decree of the competent court, despite the appeal being pending.Issue 3: Correctness of Claim AdmissionThe Tribunal held that the Resolution Professional erred in registering the claim for a nominal amount of Rs. 1 instead of admitting the entire decretal amount of Rs. 21,79,88,328.04 as per the decree. The Resolution Professional was directed to include the full claim amount in the records, subject to the finality of the outcome of the appeal before the High Court. This decision aimed to ensure transparency for prospective resolution applicants considering the Corporate Debtor's resolution plan.In conclusion, the Tribunal allowed the application and directed the Resolution Professional to include the Applicant's claim for the total sum of Rs. 21,79,88,328.04 as per the decree passed by the Senior Civil Judge. The decision emphasized the importance of correctly assessing and admitting claim amounts in insolvency proceedings, considering the legal status and finality of prior judgments.