2022 (9) TMI 1069 - AT - Insolvency and Bankruptcy

Tribunal upholds RP's decision on claim reduction, deems role administrative, not adjudicatory.

The Tribunal affirmed the Adjudicating Authority's decision to dismiss the appeal, upholding the Resolution Professional's (RP) reduction of the ... Seeking direction to Resolution Professional to restore the claim of the applicant as it was lodged in accordance with the arbitration award - seeking to direct the RP to provide details, documents and information sought by the applicant in stipulated time period - HELD THAT:- The Respondent admitted the claim based on calculation of the Appellant wherein the Appellant itself has given treatment to the security deposit by deducting it from the outstanding amount, the interest rate as per the arbitration award dated 04.04.2016 was @ 18% which is also not disputed by the Appellant and further treatment also has been given to the information provided by the RBI on 19.12.2019 with respect to the interest on the security deposit, which again has been admitted by the Appellant before the RBI. The Resolution Professional has therefore not adjudicated but only has collated the information provided by the Appellant, Corporate Debtor and the RBI. Hence, we are of the view that there is no merit in the Appeal, the instant Appeal deserves to be dismissed. The Adjudicating Authority has considered the submissions made by the Appellant and have held that the Hon’ble Supreme Court in the case of COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT] relied by the Resolution Professional, wherein it is observed that it is the responsibility of the Resolution Professional to collect, collate and finally admit claims of all creditors, the role of the Resolution Professional is not adjudicatory but administrative. Registry to upload the Judgment on the website of this Appellate Tribunal and send the copy of this Judgment to the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench, Ahmedabad Court 2), forthwith. Issues Involved:1. Restoration of the Appellant's claim by the Resolution Professional (RP).2. Provision of details, documents, and information by the RP.3. Reduction of the Appellant's claim by the RP.4. Calculation of the Appellant's claim based on the arbitral award.5. Adjudication by the RP.Issue-wise Detailed Analysis:1. Restoration of the Appellant's claim by the Resolution Professional (RP):The Appellant sought the restoration of its claim as per the arbitration award, which was initially admitted by the RP but later reduced significantly. The Appellant argued that the RP failed to consider the arbitral award that had attained finality and should be treated as a financial debt under the Insolvency and Bankruptcy Code (IBC). The Appellant cited the Supreme Court judgment in 'Dena Bank Vs. C. Shivkumar Reddy & Anr.' to support its claim that an arbitral award qualifies as a financial debt.2. Provision of details, documents, and information by the RP:The Appellant requested the RP to provide necessary details, documents, and information within a stipulated time period. This request was part of the application filed under Section 60(5)(c) of the IBC, which was dismissed by the Adjudicating Authority.3. Reduction of the Appellant's claim by the RP:The RP initially admitted the Appellant's claim provisionally but later reduced it from Rs. 4,51,96,588.08 to Rs. 94 lacs and subsequently to Rs. 69 lacs. The Appellant contended that the RP's calculations were erroneous and based on a selective reading of the arbitral award, sanction letter, and RBI email. The reduction adversely affected the Appellant's voting share in the Committee of Creditors (CoC).4. Calculation of the Appellant's claim based on the arbitral award:The Appellant argued that the RP incorrectly calculated the claim by considering an interest rate of 18% per annum instead of the 36% per annum stipulated in the sanction letter and loan agreement. The Appellant also contended that the RP wrongly gave the benefit of collateral security to the Corporate Debtor, which was not granted by the Arbitrator.5. Adjudication by the RP:The Appellant asserted that the RP acted beyond his administrative role by re-evaluating and effectively adjudicating upon the claims. The Appellant maintained that the RP should have admitted the claim based on the mutually agreed terms of the sanction letter or the arbitral award.Findings:The Tribunal observed that the RP admitted the claim based on the information provided by the Appellant, Corporate Debtor, and RBI. The RP's role was administrative, not adjudicatory, and he collated the information to verify the claim. The Tribunal found no merit in the Appellant's argument that the RP wrongly adjudicated the claim. The Adjudicating Authority's order was affirmed, and the appeal was dismissed.Conclusion:The Tribunal upheld the RP's decision to reduce the Appellant's claim based on the arbitral award and other relevant information. The RP's administrative role in collating and verifying claims was emphasized, and the Appellant's appeal was dismissed. The Adjudicating Authority's order was affirmed, and the RP's actions were deemed appropriate and in accordance with the IBC.