TaxTMI 
TaxTMI 
2025 (8) TMI 1152
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.... filed by the Appellant has been dismissed. 2. Brief facts which appear necessary for disposal of this appeal are that Respondent-Corporate Debtor is a flagship company of III C Group/3C Company and all sales marketing development and construction works of all the projects of the group companies were stated to be undertaken by the Respondent, who used to engage the services of all service providers and suppliers in its name and make payments directly from its account to all vendors/suppliers and service providers. 3. It is the case of the appellant that the Respondent was full-fledged sale/marketing development and construction Company which had construction contracts in its name with all its group companies for their real estate projects and charged money from these associates/group companies and make all payments to all the suppliers of services and goods so engaged by the Respondent. 4. It is also the case of the appellant that it was incorporated as an LLP on 06.09.2016 and prior to its incorporation as an LLP the appellant was a proprietor firm and was engaged by the Respondent/CD for providing Corporate Legal Consultancy Services on a fixed monthly retainer ship fee ....
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....20 requesting RP, to reconsider its claim, however, the RP replied that claim of the appellant could not be collated in absence of accepted bills and credit balance in the Corporate books of account of the CD and these are not the sole expenses of the CD. 11. An IA bearing IA No. 3813/2021 was filed by the appellant before Learned Tribunal requesting to issue the directions to the IRP to consider the claim of the appellant with other consequential prayers however the said IA was rejected by Learned Tribunal by passing the impugned order which has been challenged by the appellant by filing instant appeal. 12. We have heard Learned Counsel for the appellant (Party in person) as well as Learned Counsel appearing for the Respondent and have also pursued the record as well as the written submissions filed by the parties. Submissions of Ld. Counsels for the Appellant 13. Learned Counsel for the appellant (Party in Person) submits that the IRP/RP as well as the Adjudicating Authority has not considered the claim of the appellant in right perspective and rejected the same only on the basis that the debt has not been found in the books of accounts of the Corporate Debtor and als....
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....s through various pages of appeal paper book and highlighted various emails in order to highlight that apart from the consultancy services he has also provided these services (court litigation services). In nutshell Learned Counsel for the appellant submits that the Tribunal as well as the RP/IRP has committed material illegality in rejecting the claim of the appellant which has been duly proved before them. Submission of Learned Counsel for the Respondent. 19. Learned Counsel for the Respondent submits that no illegality or to say any irregularity has been committed by the adjudicating authority in passing the impugned order. It is submitted that after being appointed as the Interim Resolution Professional vide order dated 17.12.2019 he was entrusted with duty to collate the claims and under this obligation he has himself requested the appellant to put forth this claim. 20. It is further submitted that on the appellants filed his claim in stipulated form - B on 15 .06.2020 to the tune of Rs 1,08,45,000/- and which was also sent to the Respondent through e-mail on 27.08.2020 and after receiving of the claim he required ....
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....panies of the CD. Thus, the claim of the appellant was vague, and not genuine. 25. It is also highlighted that the appellant being the IRP/RP is having power only to collate and verify the claim and is not in a position to adjudicate on the same. In this regard, the provisions contained under section 18 of the IBC and Regulation 10, 12, 13 of Corporate Insolvency Resolution Process Regulations 2016, has been referred as well as the law laid down by the Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. & others Vs. Union of India & others reported in year 2019, Supreme Court cases 379 is highlighted. Rejoinder Submissions by the Appellant 26. Learned Counsel for the appellant (in person) while relying on the affidavit dated 24.09.2024 submits that by virtue of the engagement letter issued on 01.06.2016 the appellant was only providing Corporate Legal Consultancy Services alone, to the CD on fixed retainer ship fee of Rs, 6,00,000/- per month and the fee was being paid to him by the CD till March, 2018. and the 'court litigation services' were paid/payable separately by the CD or the concerned group entity to which this service was being provided and the 18 invoic....
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.... you shall be required to perform your duties as per detailed attached as Annexure-I. Notwithstanding anything contained to the contrary to the contrary under Annexure-1, any court litigation services, reply to legal notices, if assigned to you, shall be additional on chargeable basis by you for which the necessary fees shall be fixed and payable by us extra as mutually agreed. 3. During the period, you shall provide Legal Consultancy and allied services to the Company/Group in accordance with the scope and terms & conditions. The Legal Consultancy and allied services shall include all such acts, things and deeds which are reasonably necessary and/or are incidental to proper function, performance and existence of a Legal Department which is usual and customary to the Legal Department of any Company effectively and properly. 4. That your fixed monthly fee shall be Rs. 6,00,000/- (Rupees Six Lakhs only) which is subject to deduction of necessary TDS (Tax Deduction at source), however, exclusive of Service Tax as applicable from time to time. You are required to raise the bill for your consultancy fees in 1st week of every English calendar month and the same shall be....
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....as not been verified by the IRP and also rejected by the Adjudicating Authority are (i) The appellate LLP was formed and came in existence on 06.09.2016 whereas the engagement letter issued by the Respondent is of date 01.06.2016 where on the appellant has been mentioned with the name of LLP and this casts a shadow of doubt on this document (ii) That the claim of the appellant could not be verified from the books of accounts of the CD. 35. The appellant in his appeal has stated that the Adjudicating Authority has mistook the seal of the LLP on the engagement letter dated 01.06.2016, which was affixed on the copy of this document only for self attestation of this document for the purpose of filing before the NCLT and on original engagement letter no such seal is affixed. It was also highlighted that he had shown his willingness before the NCLT to show the original document to the NCLT and in appeal paper books also the copy of the engagement letter has been filed and perusal of this document reveals that no seal of LLP is affixed on it. In view of above, we do not find much force in this ground which has been chosen by the IRP to reject the claim of the appellant. 36. Coming t....
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...., namely: - (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to- (i) business operations for the previous two years; (ii) financial and operational payments for the previous two years; (iii) list of assets and liabilities as on the initiation date; and (iv) such other matters as may be specified; (b) receive and collate all the claimsJ2 submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15; (c) constitute a committee of creditors; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors; (e) file information collected with the information utility, if necessary; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of as....
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....RP to collect all the information as described under Section 18 of the IBC pertaining to the CD and thereafter substantiate the claims submitted by the creditors by asking them to submit evidence or clarification as he deems fit and thereafter to proceed with the verification of the claim. It is also clear that the IRP is only having a duty to collect and verify the claim and on verification may admit it, however, no power of adjudication with regard to the same has been conferred on him which could only be exercised by the NCLT. 39. Coming back to the facts of the instant case, as stated earlier the other ground of rejection of claim of the appellant is that the same could not be verified from the account books of accounts of the CD. No. doubt the contention of the Learned Counsel for the appellant is correct to this extent that under Regulation 7 of the CIRP Regulations of 2016, the financial Accounts are not the only source to prove existence of such claim but it could not be denied that the existence of entries in the books of accounts of the CD with regard to such claim of the appellant is the prima facie proof of such claim or debt and if this is not available, the other s....
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....e the services to the Respondent, Corporate Debtor as reflected from the hundreds of emails filed by the Appellant, Juristica Legal Services LLP in Volume II and Volume III of the Appeal Paper Book and also acknowledged by the Respondent, Corporate Debtor in Para 24 of their Reply filed before the Hon'ble NCLT and in Para 25 of their Reply (at Page 109 of the Appeal Paper Book) filed before this Hon'ble Appellate Tribunal, however, the Respondent, Corporate Debtor, neither booked these Invoices in their books, nor made any payment to the Appellant, Juristica Legal Services LLP. 9. That the Deponent state that in addition to the "Corporate Legal Consultancy Services", the Appellant, Juristica Legal Services LLP has also provided "Court Litigation Services" to the Respondent, Corporate Debtor and also to the other group companies of the Respondent, Corporate Debtor and raised bills / invoices of such Court Litigation Services on the relevant group entities which unpaid amounts has been adjusted/set-off towards the consideration of the Flats/Inventories allotted to the Appellant, Juristica Legal Services LLP, by such group entities. 10. That the Deponent stat....
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....ed from the record that it was the IRP who had informed the appellant to submit its claim as he (IRP) has found certain evidence in the account books of the corporate debtor pertaining to the providing of legal services to it by the appellant and it is the case of the Respondent that the claim only to the tune of Rs. 45,000/- has been collated and verified. 45. One of the submission which has been raised by Ld. Counsel for the Respondent is that the claim of the appellant is doubtful, as no effort has been made by the appellant to recover its dues from the Corporate Debtor and even no notice etc. has been sent to the CD for the purpose of realising its dues. We also find substance in it, for the reason that when the retainer ship fee of the appellant was due on the CD of many months, the natural corollary is that he should have demanded the same either by writing any email or letter etc. Non- demand of such dues also put the claim of the appellant in the category of doubtful claim, more so in absence of commensurate material in the books of accounts of CD. 46. Keeping in view all the facts and circumstances of this case and specifically that the claim of the appellant has not....