TaxTMI 
TaxTMI 
2024 (2) TMI 735
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..../2019. By the impugned order, the Adjudicating Authority rejected the application filed by the Appellant, an Operational Creditor, seeking acceptance of their claims which had been rejected by the Respondent/Resolution Professional. Aggrieved by the impugned order, the present appeal has been filed by the Appellant. 2. The Learned Counsel for the Appellant submitted that the Appellant was hired as a media management consultant on a monthly retainership of Rs.10 lakhs per month for which purpose the Appellant had entered into a Consultancy Agreement ("Agreement" in short) with the Corporate Debtor on 01.06.2016. It was further submitted that in pursuance of the said Agreement, monthly payments had also been received from the Corporate Debtor from June 2016 to April 2018. After the Corporate Debtor was admitted into insolvency, the Resolution Professional ("RP" in short) invited claims. The Appellant filed claims vide email dated 28.03.2020 along with documents and the invoices for the relevant period which was also acknowledged by the RP on the same date. It has been contended by the Learned Counsel for the Appellant that the RP on his own had never requested the Appellant to provi....
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....on 13 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as "CIRP Regulations") entailed upon the RP to verify every claim as on the insolvency commencement date, in the present matter, the RP had failed to properly evaluate and verify the claims of the Appellant though these documents were part of the records of the Corporate Debtor and hence available to the RP. 5. It was further submitted that though the Adjudicating Authority had directed the RP on 11.05.2022 to again consider the claims filed by the Appellant, the RP summarily rejected the claim on 27.06.2022 without considering the documents and various proofs of service already submitted by the Appellant. It was submitted that the RP had exceeded its powers by seeking proof of services as it amounted to adjudication of the claim filed by the Appellant. 6. The Learned Counsel for the Respondent refuting the contentions of the Appellant submitted that the Appellant had failed to validate their claims by failing to provide supporting documents to substantiate the imaginary services as claimed to have been performed by the Appellant a....
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...., other than workman or employee of the corporate debtor than workman or employee of the corporate debtor, shall submit claim with proof to the interim resolution professional in person, by post or by electronic means in Form B of the Schedule I. Provided that such person may submit supplementary documents or clarifications in support of the claim before the constitution of the committee. (2) The existence of debt due to the operational creditor under this Regulation may be proved on the basis of- (a) the records available with an information utility, if any; or (b) other relevant documents, including- (i) a contract for the supply of goods and services with corporate debtor; (ii) an invoice demanding payment for the goods and services supplied to the corporate debtor; (iii) an order of a court or tribunal that has adjudicated upon the non-payment of a debt, if any; or (iv) financial accounts. (v) copies of relevant extracts of Form GSTR-1 and Form GST-3-B filed under the provisions of the relevant laws relating to Goods and Services Tax and the copy of e-way bill wherever applicable: Provided that provisions of this sub-clause shall not apply to those creditors....
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.... AIR (2019) 4 SCC 17 ('Swiss Ribbons' in short) has held that the RP has no adjudicatory powers. Hence, the RP in arbitrarily rejecting the bona-fide claims of the Appellant went beyond the statutory provisions and exercised adjudicatory powers at a time when the RP only had administrative powers. 13. Submission was also pressed that the Adjudicating Authority also failed to appreciate that the RP did not carry out the duty of examining the books of accounts of the Corporate Debtor which shows continuous payment made by the Corporate Debtor to the Appellant and deposit of GST for the period 2016-2019. The question of proof of services would have arisen only if the services were ever disputed by the Corporate Debtor. The Learned Counsel for the Appellant submitted that it is also aggrieved with the impugned order on the ground that the Adjudicating Authority had held the Agreement to be a nebulous document. When the validity of the Agreement was not challenged either by the Corporate Debtor nor the RP, it was asserted that it was not within the scope and jurisdiction of the Adjudicating Authority to hold the Agreement to be nebulous and put question marks on its formatting etc. Mo....
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....e role of the RP becomes vital to the efficient and transparent conduct of the CIRP process. When claims are submitted to the RP, even though there are no adjudicatory powers vested on the RP in respect of the claims filed before him, it remains undisputed that there is an express provision in the CIRP Regulations which enables RP to seek information towards establishment of the correctness of a claim. The RP is entitled to seek substantiation of claims under Regulation 10 of CIRP Regulations. The duty to verify the claims by the IRP/RP has also been expressly provided under Regulation 13 of the CIRP Regulations. This verification exercise entails upon the RP the responsibility to go through the supporting proof/documents to establish the truth and accuracy of information contained therein in support of the claim so filed. On verification, if the RP finds that the evidence given in support of a claim is weak and unconvincing, the RP can always ask for more proof to substantiate the claim. Towards substantiating a claim, a creditor is ordinarily expected to provide proof to make it solid or believable. If credible and satisfactory evidence is not forthcoming from the creditor in spi....
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....Habitat Centre Pvt. Ltd. Dear Sir, My above named client............. It is stated that the Corporate Debtor's records, checked by my client reveals that there is no document or proof, available with the CD or in its records, which even minutely shows that any kind of services were ever provided by your client to the CD at any point of time. It is stated that even along with the Claim Form submitted by your client as Operational Creditor, no proof, whatsoever, was annexed which could establish providing any kind of services by your client to CD. Upon requisition, your client merely furnished the alleged Agreement dated 01.06.2016 and unilateral invoices made by your client. It is stated that your client was supposed to furnish proofs of providing actual services under the said alleged agreement, which he has failed to furnish. It is stated that in order to verify the claims of your client, the proofs of providing actual services by your client under the alleged agreement, would be required." ...... Yours faithfully , ( Amit Punj ) Advocate " ( Emphasis supplied ) In the said reply, it was also clarified by the RP that the claims of the Appellant are still at the st....
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....Creditor, no proof, whatsoever, was annexed which could establish providing any kind of services by your client to CD. Upon requisition, your client merely furnished the alleged Agreement dated 01.06.2016 and unilateral invoices made by your client. It is stated that your client was supposed to furnish proofs of providing actual services under the said alleged agreement, which he has failed to furnish. It is stated that my client found the aforesaid claims of your client frivolous and vexatious and as such, vide letter dated 14.09.2020, the aforesaid claims of your client were denied. It was also made clear that in view of denial of all claims of your client, there arose no question to set off the payments payable to my client by Ms. Sonia Kumar from the aforesaid claims of your client........ .................................. ................................. Your faithfully, (Amit Punj) Advocate" (Emphasis supplied) 22. The Appellant had also filed IA No. 5589/2020 before the Adjudicating Authority praying for directions to be given to the RP to admit their claim from May 2018 to August 2020 amounting Rs.1.90 crore along with interest. This matter was disposed of by the....
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....nly were these media clippings skeletal and sketchy but that they were all issued on a single day while the invoice submitted was in respect of services performed for a period which was spread over more than one year. 24. After going through the invoices, the RP was of the view that there were no underlying records and hence undertook to verify the genuineness of the claims. We are of the considered opinion that the RP is not expected to rubber stamp the claims filed by the creditors without exercising due diligence while examining the invoices. By merely filing their claims, the creditor cannot rest on its oars and refrain from providing further evidence if it so sought by the RP by taking shelter on the ground that the RP lacks adjudicating powers. If such basic verification is not done, the logical corollary is that the Information Memorandum is likely to be defective and flawed thereby having consequential adverse impact on the CIRP process. Allowing such perfunctory submission of invoices without proper examination has the potential to defeat the objectives of the IBC. At this juncture it may however not be out of place to mention here that the observations made by the RP reg....