TaxTMI 
TaxTMI 
2021 (6) TMI 572
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....ng newspapers in its circulation dated 09.02.2021 of New Delhi region: (a) Financial Express (English); (b) Jansatta (Hindi Edition). 3. The Applicant vide his intimation letters dated 09.02.2021 had informed the erstwhile and suspended Directors of the Corporate Debtor namely, Mr. Mohd. Irshad Khan, Mr. Pankaj Kumar and Mr. Vineet Relia about the initiation of the Corporate Insolvency Resolution Process of the Corporate Debtor and further sought details and information's relating to the accounts and management of the Corporate Debtor. 4. In the meanwhile, the Applicant has been informed about a settlement which has been arrived between the Operational Creditor and the Corporate Debtor and the consent terms dated 20.02.2021 has been executed between such parties. 5. Thereafter, the Applicant/Interim Resolution Professional also received Form FA from the Operational Creditor (i.e. Application for Withdrawal of Corporate Insolvency Resolution Process) under Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 thereby stating that the Operation Creditor withdraws the captio....
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....Regulations, 2016, the last date of receipt of claim was 19.02.2021 and accordingly, the last date for verification of claims would have been 26.02.2021, i.e., within seven days from the last date of the receipt of the claims. d. The Original Applicant/Operational Creditor submitted his claim too with the Interim Resolution Professional on 19.02.2021 for an amount of Rs. 3,97,890 prior to the settlement with the Corporate Debtor on 20.02.2021, the same has not been shown in the list of claims above in para 4 as it has already been settled. e. Before the constitution of the Committee of Creditors, the Corporate Debtor approached the Operational Creditor for the settlement of the outstanding dues. f. Pursuant to the receipt of Form FA, the application for withdrawal was filed by the IRP on 22.02.2021 and the claimants were informed about the same via mail dated 25.02.2021. g. A mail dated 01.03.2021 was received from one of the claimants i.e., Impact Sare Magnum Townships Private Limited (claim filed as a Financial Creditor) taking note of the settlement agreed upon between the Operational Creditor and the Corporate Debtor. 11. We have heard the....
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....dated 25.01.2019 in W.P.(C) no. 99/2018 in the matter of Swiss Ribbon Pvt. Ltd. vs. Union of India & ors. in para 52 at page no. 100 of the judgment had observed that: 5. It is clear that once the Code gets triggered by admission of a creditor's petition under Sections 7 to 9, the proceeding that is before the Adjudicating Authority, being a collective proceeding, is a proceeding in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. A question arises as to what is to happen before a committee of creditors is constituted (as per the timelines that are specified, a committee of creditors can be appointed at any time within 30 days from the date of appointment of the interim resolution professional). We make it clear that at any stage where the committee of creditors is not yet constituted, a party can approach the NCLT directly, which Tribunal may, in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016 allow or disallow an application for withdrawal or settlement. This will be decided after hearing all the concer....
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....lose the proceeding. The Respondent Company is released from all the rigour of law and is allowed to function independently through its Board of Directors from immediate effect. 18. We went through the decisions and we notice that the Hon'ble Supreme Court in Swiss Ribbons case held that Tribunal in exercise of its inherent powers under Rule 11 of the NCLT Rules, 2016 allow or disallow an application for withdrawal or settlement. Similarly, in Mr. K.C. Sanjeev vs. Easwara Pillai Kesavan Nair case passed by Hon'ble NCLAT held that Adjudicating Authority without disposing of the Application filed under Rule 11 of the NCLT Rules, 2016 has no jurisdiction to defer the matter and direct the 'Interim Resolution Professional' to constitute the 'Committee of Creditors' to render Application filed under Rule 11 as infructuous. 19. In the light of that decisions, when we consider the case in hand then we notice that the present application is filed under Section 12A IBC 2016 read with Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and not under Rule 11 of the NCLT Rules, 2016....
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....t of creditors shall be- (a) available for inspection by the persons who submitted proofs of claim; (b) available for inspection by members, partners, directors and guarantors of the corporate debtor; (c) displayed on the website, if any, of the corporate debtor; (d) filed with the Adjudicating Authority; and (e) presented at the first meeting of the committee. 25. Mere plain reading of the provision shows that nowhere it is mentioned in the Regulations that a claim can only be verified on the last date. The applicant has not explained the reasons when he received the claim on 18.02.2021 and the last date was on 19.02.2021 then what prevented him to verify the claims within this period. And why he has waited for 7th day as provided in the Regulation 13(1) of the IBBI (Insolvency Resolution of Corporate Persons) Regulation, 2016 when he has received the claim of the financial creditor, who according to the regulations and laws would have been the sole member of the CoC. This has not been explained by the applicant/IRP. Rather it is seen that the IRP after receiving the claim of the sole financial creditor on 18.02.2021 instead of verif....
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....ded that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation. (2) The application under sub-regulation (1) shall be made in Form FA of the Schedule accompanied by a bank guarantee- (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub-regulation (1). (3) Where an application for withdrawal is under clause (a) of sub-regulation (1), the interim resolution professional shall submit the application to the Adjudicating Authority on behalf of the applicant, within three days of its receipt. (4) Where an application for withdrawal is under clause (b) of sub-regulation (1), the committee shall consider the application, within seven days of its receipt. (5) Wh....
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....P instead of verifying the claims of the creditors, had waited for settlement, which was going to be arrived between the applicant and Corporate Debtor. Which in our considered view is not the letter and spirit of Section 12A and Regulation 30A of the IBBI (Insolvency Resolution of Corporate Persons) Regulation, 2016 as well as the decisions upon which the applicant has placed reliance. 31. Since, the IRP has received a claim of one of the financial creditor, which is more than One Crore. Therefore, it is the duty of the IRP; before considering the Form FA, verify the claim and if the claim is found to be genuine then constitute the CoC and if the claim is not genuine then reject the same. And only thereafter, submit the Form FA before the Adjudicating Authority, within three days, as required under the law but IRP has not followed the law in the letter and spirit. Rather he interpreted the law, according to his own convenience, which is not permissible. 32. For the reasons discussed above, since, before the submission of Form FA, there was a claim of more than One Crore of the financial creditor, under such circumstances, we have no option but to reject the application submi....