TaxTMI 
TaxTMI 
2024 (1) TMI 342
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....the claim of the Appellant as Financial Creditor has been dismissed, aggrieved against which order, this Appeal has been filed. 2. Brief facts of the case necessary to be noticed for deciding this Appeal are:- 2.1. The Corporate Debtor demerged under a Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013 between the Appellant and the Corporate Debtor approved by the NCLT, Kolkata vide order dated 08.11.2019. An Application under Section 9 was filed in the year 2021 against the Corporate Debtor which was admitted by order dated 05.05.2022 and one Mr. Seikh Abdul Salam was appointed as Interim Resolution Professional (IRP). In pursuance of the public announcement dated 07.05.2022, Appellant filed its claim in prescribed Form C as Financial Creditor for an amount of Rs.5,18,28,91,356/-. Earlier Resolution Professional (RP) collated the claim for an amount of Rs.516,81,01,037/-. Appellant was initially admitted to the Committee of Creditors (CoC) of the Corporate Debtor but subsequently was removed by the RP as related party. Appellant had filed an IA No.638 of 2022 challenging his removal before the Adjudicating Authority. The Adjudicating Authority vide order....
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....d and/or direction or directions be given as this Hon'ble Tribunal may deem fit and proper. And for this Act of kindness, your applicants as in duty bound shall ever pray." 2.2. IA filed by the Appellant was replied by the Resolution Professional. Adjudicating Authority heard the Appellant as well as the Resolution Professional and by the impugned order rejected the IA upholding the decision of the Resolution Professional rejecting the claim of the Appellant as Financial Creditor. Aggrieved by the impugned order dated 18.10.2023, this Appeal has been filed. 3. We have heard Shri Mainak Bose, Learned Counsel for the Appellant, Shri S.N. Mookherjee, Learned Senior Counsel with Shri Abhijeet Sinha, Learned Counsel for the Respondent No.1- Resolution Professional. 4. Shri Mainak Bose, Learned Counsel for the Appellant submits that the Regulations 8, 10 and 13 of the CIRP Regulations, 2016 permits and IRP or RP to call for and/or seek from a creditor for substantiation of the claim prior to its admission. Once a claim is admitted by an IRP or RP, provisions of the said Regulations 8, 10 and 13 are no more available to the RP and his powers thereafter is limited onl....
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.... the claim Form C does not mentions the details of how and when debt is incurred as 'inter-company loan given from time to time along with the accrued interest thereon' whereas no loan was given at any point of time to the Corporate Debtor nor there was any disbursement of any loan to the Corporate Debtor. There being no transaction which gave rise to the financial debt, the claim of the Appellant as a Financial Creditor was unfounded and in spite of the Resolution Professional asking by repeated e-mails to the Appellant to submit the documents to prove the financial debt, neither any document was submitted nor any reply was given, leaving no option to the Resolution Professional except to reject the claim of the financial debt. During the arguments, Counsel for the Appellant contended that the claim is based on a Scheme of Demerger whereas claim form did not mention the Scheme of Demerger as basis of the claim. Scheme of demerger does not mention any loan of Appellant to the Corporate Debtor. The actual transactions of borrowings of the Corporate Debtor relating to the demerger period are for Rs.133 Crores and Rs.55 Crores whereas the alleged claim of Appellant is for Rs.518 Crore....
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....is as follows:- "FORM C SUBMISSION OF CLAIM BY FINANCIAL CREDITORS (Under Regulation 8 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016) 16th May, 2022 From Kesoram Industries Limited Birla Building, 9/1 R.N Mukherjee Road. Kolkata-700 001. To Mr. Seikh Abdul Salam [Interim Resolution Professional] 64J, Linton Street. Beniapukur. Kolkata- 700 014. Subject: Submission of claim and proof of claim. Sir, Kesoram Industries Limited, hereby submits this claim in respect of the corporate insolvency resolution process of Birla Tyres Limited. The details for the same are set out below: Relevant Particulars (1) (2) (3) 1. Name of the financial creditor Kesoram Industries Limited 2. Identification number of the financial creditor CIN: L17119WB1919PLC003 429 3. Address and email address of the financial creditor for correspondence Address: Birla Building, 9/1 R.N. Mukherjee Road, Kolkata- 700 001 Email: [email protected] 4. Details of....
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.... follows:- 1. Birla Tyres Limited, the corporate debtor was, at the insolvency commencement date, being the 5th day of May 2022, actually indebted to Kesoram Industries Limited for a sum of Rs. 518,28,98,356. 2. In respect of the claim of the said sum or any part thereof, Kesoram Industries Limited has relied on the documents specified below: Balance confirmation from Birla Tyres Limited as on 30th April, 2022. Statement of Balance Outstanding 3. The said documents are true, valid and genuine to the best of my knowledge. information and belief and no material facts have been concealed therefrom. 4. In respect of the said sum or any part thereof, neither I, nor any person, by my order, to my knowledge or belief, for my use, had or received any manner of satisfaction or security whatsoever. 5. I undertake to update the clam as and when the claim is satisfied, partly or fully, from any source in any manner, after the insolvency commencement date. 6. Kesoram Industries Limited is not a related party of the corporate debtor, as defined under section 5 (24) of the Code. Date: 16th May, 2022. Place: Kolkata ....
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....borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its dematerialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; [Explanation. -For the purposes of this sub-clause, - (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulat....
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....ial debt. In other words, any of the transactions stated in the said Sub-clauses (a) to (i) of Section 5(8) would be falling within the ambit of 'financial debt only if it carries the essential elements stated in the principal Clause or at least has the features which could be traced to such essential elements in the principal clause. In yet other words, the essential element of disbursal, and that too against the consideration for time value of money, needs to be found in the genesis of any debt before it may be treated as 'financial debt' within the meaning of Section 5(8) of the Code. "This debt may be of any nature but a part of it is always required to be carrying, or corresponding to, or at least having some traces of disbursal against consideration for the time value of money." ( Emphasis Added )" 11. It was held that the requirement of disbursal against the consideration for time value of money remains an essential part. Thus, disbursement against the consideration for time value of money has to be proved for a financial debt. 12. Learned Counsel for the Respondent has referred to the e-mail dated 28.12.2022 sent by the Appellant to the R....
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....with us and provide us with the above mentioned documents by 30th December 2022 Regards, Pratim Bayal RP-M/s Birla Tyres Limited (under CIRP) E-mail ID for communication:birlatyres.2022gmail.com Registered email ID: [email protected] Regn No.: IBBI/IPA-003/IP-N00213/2018- 2019/12385 AFA Valid till 6th December 2023" 13. The Appellant submitted its reply by e-mail dated 28.12.2022, which stated as follows:- "Apropos your small dated 28 December 2022 herein below, kindly note provisions of Section 2512)(e) of 18C requiring the RP to maintain an updated list of claims do not authorize the RP to recheck and/or reverify and/or relook into an admitted claim. RP can merely revise the amount of admitted claim pursuant to powers derived from Regulation 14(2) on the basis of additional information warranting such revision and not otherwise The authority of RP towards the duty cast on him under Section 20(1) of the IBC on protecting and preserving the value of the property of the corporate debtor and managing the operations of the corporate debtor as a going concern are spelt out in Section 20(2) of IBC and the same too do not empow....
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.... claimed in Form C was neither proved nor substantiated. In the application which was filed by the Appellant before the Adjudicating Authority there was no mention of any loan at any point of time given to the Corporate Debtor by the Appellant. Reliance was placed in the application IA No.957 of 2022 before the Adjudicating Authority as well as during the course of submission the Appellant, on the financial statement of the Corporate Debtor ending on 31.03.2022. In paragraph 5 of the application, following was pleaded:- "5. The audited financial statements of the Corporate Debtor from time to time have also acknowledged financial liability to the Corporate Debtor vis-à-vis the Applicant. In this regard, the last audited balance sheet of the Corporate Debtor for the financial year 2021-22 is attached hereto marked "P-6", and the debt of the Applicant is recorded in the said balance sheet at internal page no 95 thereof." 16. Financial Statement on which much reliance has been placed by the Appellant has also been filed along with the Appeal. We need to notice certain parts of the financial statement for the year ended 31.03.2022. Counsel for the Appellant has relie....
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....e Adjudicating Authority and further prayed for direction to the Resolution Professional to restore the claim of the Appellant as Financial Creditor. The Adjudicating Authority proceeded to hear the parties on the said application and having decided the claim of the Appellant on merits, it is not necessary for us to enter into the submission as to whether the e-mail dated 19.04.2023 could have been issued by the Resolution Professional or not. The Adjudicating Authority under sub-section (5) of Section 60 of the Code is fully entitled to decide any question regarding any claim made against the Corporate Debtor. Sub-section (5) of Section 60 reads as follows:- "60. Adjudicating Authority for corporate persons. -(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of - (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any quest....