2022 (9) TMI 634 - AT - Insolvency and Bankruptcy

Inauthentic documents bar New Hind Silk House claim; removed from Creditors Committee

The Tribunal found discrepancies in the authenticity of documents submitted by New Hind Silk House Pvt. Ltd. (NHSH) and concluded that NHSH's claim was ... Maintainability of claim filed in form C - whether the claim submitted by NHSH is under limitation based on the documents submitted alongwith the claim in Form C? - whether the RP has looked into the veracity and genuineness of the said claim in the light of provisions of IBC and regulations 13 and 14 of CIRP Regulations? HELD THAT:- The Adjudicating Authority has considered various documents submitted by NHSH regarding its claim along with Form C and held that RP has considered and screened all the documents properly as per the provisions of IBC and CIRP Regulations and further the allegations made by the Appellant have not been substantiated. In addition, he has held that the application is also bad for non-joinder of two directors of the corporate debtor, who had signed the confirmations of ledger account. As a result, the application filed by P.M. Cold Storage Pvt. Ltd. before the Adjudicating Authority was dismissed by the Impugned Order - we are unable to place reliance of balance sheets for the relevant FY 2016-17, FY 2017-18 and FY 2018-19 regarding acknowledgment of debt. Since they were prepared on 12.3.2020, and contain the admitted claim of NHSH which is in question. Thus, in view of the fact that the last payment by the corporate debtor was made to the financial creditor NHSH on 5.8.2016 and the claim was filed on 26.2.2019. We find that the claim is barred by limitation. The fact that the corporate debtor has paid TDS on interest payable cannot be considered as acknowledgment in writing of the liability by the corporate debtor and therefore, such TDS payment will not have any effect of being an acknowledgment of said debt. The documents on which the RP relied on in accepting and admitting the claim of NHSH and inducting it as a member of CoC does not inspire confidence and should not have been relied upon by the RP in admitting the claim of the NHSH being within limitation. The Adjudicating Authority has, therefore, committed an error in upholding the admission by RP of claim of NHSH - appeal disposed off. Issues Involved:1. Legality of the claim filed by New Hind Silk House Pvt. Ltd. (NHSH) in the CIRP of Goouksheer Farm Fresh Pvt. Ltd.2. Verification of the authenticity and limitation of NHSH's claim by the Resolution Professional (RP).3. Alleged discrepancies in the documents submitted by NHSH.4. Impact of NHSH's inclusion in the Committee of Creditors (CoC) on the voting rights of the Appellant.5. Non-joinder of necessary parties in the appeal.Detailed Analysis:1. Legality of the Claim Filed by NHSH:The Appellant contended that the claim filed by NHSH was barred by limitation, citing discrepancies in the documents submitted with Form C. The RP admitted NHSH's claim, which led to its inclusion in the CoC with a significant voting share. The Appellant challenged this inclusion, arguing that the claim was not within the limitation period and that the documents supporting the claim were unauthentic.2. Verification of the Authenticity and Limitation of NHSH's Claim by the RP:The Appellant argued that the RP failed to perform his duty under Regulation 13(1) of the CIRP Regulations in verifying the genuineness and authenticity of NHSH's claim. The RP, however, maintained that the claim was verified in accordance with Regulation 14 of the CIRP Regulations and was within limitation based on the balance confirmation dated 1.4.2017. The RP also argued that the claim was supported by ledger accounts, bank statements, and Form 26AS showing TDS deposited by the corporate debtor.3. Alleged Discrepancies in the Documents Submitted by NHSH:The Appellant highlighted discrepancies in the signatures on the balance confirmations dated 1.4.2016 and 1.4.2017, arguing that they did not match the signatures of the directors of the corporate debtor as per the Ministry of Corporate Affairs' records. The Appellant also questioned the preparation of balance sheets for FY 2016-17, FY 2017-18, and FY 2018-19 by the RP after the initiation of CIRP, which included NHSH's claim.4. Impact of NHSH's Inclusion in the CoC on the Voting Rights of the Appellant:The Appellant's voting share in the CoC was reduced from 100% to 25.07% after NHSH's inclusion. The Appellant argued that this severely affected its interests in the insolvency resolution process and raised objections regarding the admission of NHSH's claim.5. Non-Joinder of Necessary Parties in the Appeal:The RP argued that the appeal was not maintainable due to the non-joinder of two directors who signed the balance confirmations. However, the Tribunal held that the appeal was properly constituted as the acceptance of NHSH's claim was a matter between the RP and NHSH, and the Appellant was affected by the RP's action.Tribunal's Findings:The Tribunal found that the balance confirmations dated 1.4.2016 and 1.4.2017 were not reliable due to discrepancies in the signatures. The Tribunal also noted that the balance sheets for FY 2016-17, FY 2017-18, and FY 2018-19 were prepared after the initiation of CIRP and included NHSH's claim, which raised doubts about their authenticity. The Tribunal concluded that the claim of NHSH was barred by limitation and should not have been admitted by the RP. The Tribunal directed that NHSH should not be a member of the CoC in the CIRP of Goouksheer Farm Fresh Pvt. Ltd.Conclusion:The Tribunal set aside the Impugned Order and directed that NHSH shall not be a member of the CoC in the CIRP of Goouksheer Farm Fresh Pvt. Ltd. The appeal was disposed of with these directions, and there was no order as to costs.