TaxTMI 
TaxTMI 
2022 (1) TMI 164
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....sary to be noted for deciding this Appeal are: (i) Asset Reconstruction Company (India) Limited - Respondent No.2. filed an Application under Section 7 against the Corporate Debtor M/s Neesa Leisure Limited. Adjudicating Authority by an order dated 24th April, 2019 initiated the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. Section 7 Application was filed on the strength of assignment of debt by ICICI bank in favour of Respondent No.2. (ii) On 31.05.2019 first Meeting of the Committee of Creditors (CoC) of Corporate Debtor was held. The Asset Reconstruction Company (India) Limited - the Financial Creditor was assigned 23.10% voting share in the constitution of Committee of Creditors. (iii) After 9th Meeting of CoC held on 11th June, 2020, the Appellant sent an email to the Resolution Professional on 14th June 2020, objecting to the acceptance of delayed claim by ARCIL on account of assignment of debt by United Bank of India in favour of ARCIL. (iv) On 15th June, 2020, Resolution Professional replied to the Appellant stating that on the basis of document provided by ARCIL, the claim has been provisionally admitted. (v) The Appellant filed the....
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....he Resolution Professional cannot adjudicate on the claim. It is submitted that challenge to admission of claim is not bonafide and has been done with intent to derail the CIRP process. It is submitted that Appellant had challenged the Resolution Plan even before an Application for approval was filed before the Adjudicating Authority, which Application was dismissed with cost of Rs. 50,000/-. 5. We have heard the learned Counsel for the parties and perused the record. 6. We may first notice the statutory scheme with respect to Corporate Insolvency Resolution Process. We need to first notice the duties and functions of the Resolution Professional. Section 18, sub-section (1) (b) enumerates that one of the duties of the Interim Resolution Professional is to receive and collate all the claims submitted by creditors to him. Section 25, sub-section (2)(e) oblige the Resolution Professional to maintain an updated list of claims. The Regulations have been framed namely - The Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Regulation 8 provides the manner of submission of claims by Financial Creditors. Regulation 10 deals ....
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....e insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. 9. When we look into the Regulation and Section 60 of the IB code as above, it is apparent that as per Section 18 of the IB Code, one of the duties of Interim Resolution Professional is to receive and collate all the claims submitted by the creditors to him. Similarly, the Regulations empowers the Resolution Professional to call for such other evidence or clarification as he deems fit from the creditors for substantiating the whole or part of the claim. Regulation 12, sub-regulation (3) uses the expression 'submission of proof of claims'. Resolution Professional has to thus receive and collate all the claims, call for such other evidence, ask for any information from the creditors to substantiate their claims. Regulation 13(b) provides for 'verification of claims'. The above duties and functions are administrative in nature while accepting, collating and verifying the claim, the Resolution Professional is to be prima-facie satisfied that claim, which is submitted by a creditor is made out from the documents submitted. The Resolution Professional does not enjoy the adjudi....
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.... include the following, namely- (a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment; Company Appeal (AT) (Insolvency) No. 827 of 2020 10 (b) assets of any Indian or foreign subsidiary of the corporate debtor; and (c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator."" 11. As per Section 60 and sub-sections (2) and (5) an Application can be filed before the Adjudicating Authority regarding any claim made by or against the Corporate Debtor to any proceeding by or against the Corporate Debtor. In this case, an Application was filed by the Appellant under Section 60, sub-section (2) and (5) of the IB Code being I.A. No.415 of 2020. The Adjudicating Authority has complete jurisdiction to adjudicate on the claim, which was filed against the Corporate Debtor. The Adjudicating Authority rejected the Application of the Appellant by making the following observation: "RP is an appointee of the Court and he has to collate all the information and submit the same before the COC. The COC based on its commercial wisdom is to decide t....
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....has come into force, time barred debt cannot be revived. 15. We may at this stage refer to Report of the Insolvency Law Committee submitted to the Government of India on 26th March, 2018, with regard to application of Limitation Act, 1963 in paragraph 28.1 and 28.2 following was stated: "28.1 The question of applicability of the Limitation Act, 1963 ("Limitation Act") to the Code has been deliberated upon in several judgments of the NCLT and the NCLAT. The existing jurisprudence on this subject indicates that if a law is a complete code, then an express or necessary exclusion of the Limitation Act should be respected.147 In light of the confusion in this regard, the Committee deliberated on the issue and unanimously agreed that the intent of the Code could not have been to give a new lease of life to debts which are time-barred. It is settled law that when a debt is barred by time, the right to a remedy is time-barred.148 This requires being read with the definition of 'debt' and 'claim' in the Code. Further, debts in winding up proceedings cannot be time-barred,149 and there appears to be no rationale to exclude the extension of this principle of law to the Code. 28.2 Further....
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....reasons requiring adherence to a contrary view. 31. We have taken the aforesaid view to avoid injustice as well as the possibility of discrimination. We have already extracted a part of para 11 of the judgment in State of Kerala v. V.R. Kalliyanikutty [State of Kerala v. V.R. Kalliyanikutty, (1999) 3 SCC 657] wherein the Court considered the matter also in the light of Article 14 of the Constitution. In that case the possibility of Article 14 being attracted against the statute was highlighted to justify a particular interpretation as already noted. It was also observed that it would be ironic if in the name of speedy recovery contemplated by the statute, a creditor is enabled to recover claims beyond the period of limitation. In this context, it would be fair to infer that the special adjudicatory role envisaged under Section 86(1)(f) also appears to be for speedy resolution so that a vital developmental factor - electricity and its supply is not adversely affected by delay in adjudication of even ordinary civil disputes by the civil court. Evidently, in the absence of any reason or justification the legislature did not contemplate to enable a creditor who has allowed the period....
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....n Part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed....