TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1229
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.... to reconsider the claim of the Applicant. Aggrieved by the impugned order and adverse observations made against RP and further direction to send the copy of the order to Insolvency and Bankruptcy Board of India ("IBBI"), this Appeal has been filed by the RP. 2. Brief facts of the case necessary to be noticed for deciding the Appeal are: (i) The Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor ("CD") commenced vide order dated 31.10.2019. The IRP made a public announcement on 14.11.2019 asking for submission of the claims. The last date for filing of the claim with proof as per Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") was 30.01.2020. (ii) Respondent No.1 submitted the claim as Financial Creditor in Form-C for an amount of Rs.360,95,17,540/-. The claim was based on corporate guarantee extended by the CD in favour of Respondent No.1 in respect of credit facilities availed from Respondent No.1 by three companies, namely - (i) Today Clean Energy Pvt. Ltd.; (ii) Photon Suryakiran Pvt. Ltd.; and (iii) Photon Sunbeam Pvt. Ltd. (iii)....
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....tted that right to payment of corporate guarantee shall arise only when corporate guarantee is invoked prior to insolvency commencement date. In the present case, admittedly the guarantee submitted in favour of Respondent No.1 was never invoked. Hence, the claim has rightly not been accepted. It is further submitted that the facility which was extended by Respondent No.1, being fully satisfied by the Principal Borrower and no default has been committed by the Principal Borrower, hence, the claim of Corporate Guarantor on the basis of any uninvoked guarantee cannot be accepted. It is further submitted that RP has not exceeded his jurisdiction in considering the claim and the reasons given in the emails rejecting the claim were bonafide reasons, which Appellant believed as per the statutory provisions and as per law as declared by this Tribunal. Hence, there was no occasion for making any adverse observation against the Appellant in the impugned order that act of the RP is in excess and abuse of the powers and duties of the RP. It is submitted that there was no reason to send the copy of the order to the IBBI. 5. Learned Counsel for Respondent No.1 refuting the sub....
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....in the CIRP was for Rs.360,95,17,540/- for the facilities, which were extended by the CD. The facts are also not in dispute that Respondent No.1 has not invoked the corporate guarantee prior to insolvency commencement date. The Adjudicating Authority while noticing the submissions of the Applicant has noted the submission of Respondent No.1 that guarantee has not been invoked. It was noted that claim against corporate guarantor would still be valid claim, despite the fact that guarantee has not been invoked. 9. The Adjudicating Authority after hearing the Applicant as well as the RP has held that there is no adjudicatory power in the RP and the email sent by the RP tantamount to adjudication and cannot be sustained. It was held that RP is only vested with administrative powers as opposed to quasi-judicial powers. The Adjudicating Authority in paragraph 5 (vi), (vii) and (viii) made following observations: "5.vi. In the present application the Applicant has raised a specific objection stating that the Resolution Professional has exceeded in his jurisdiction and has in effect adjudicated the claim although the Resolution ....
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.... The decision of the RP by email dated 13.07.2020 and 23.01.2021 was set aside and directions have been issued to reconsider the claim of the Applicant. It is useful to extract paragraph 5(ix) and (x) of the impugned order, which is as follows: "5.ix. For the ongoing reasons we set aside the decision taken by the Resolution Professional vide E-mail dated 13.07.2020 and 23.01.2021 and direct the Resolution Professional to re-consider the claim of the Applicant in the light of the powers and functions envisaged under Section 18 and 25 of the Code and place the same before the CoC for approval. x. The claim was filed vide E-mail dated 31.01.2020 and the last date to file the proof of claim was 30.01.2020 as per Regulation 12(2) of the CIRP Regulations. The delay of 1 day in filling the claim with the Resolution Professional is condoned in the interest of justice." The application IA - 2504 of 2021 was disposed of in the above terms. 11. The IBC defines "claim" in Section 3 sub-section (6) to the following effect: "(6) "claim" means - (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured;....
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.... not paid by the debtor. It is for this reason that a financial creditor has to prove "default" as opposed to an operational creditor who merely "claims" a right to payment of a liability or obligation in respect of a debt which may be due. When this aspect is borne in mind, the differentiation in the triggering of insolvency resolution process by financial creditors under Section 7 and by operational creditors under Sections 8 and 9 of the Code becomes clear. 14. We need to first notice the objection raised by learned Counsel for the Respondent that Appeal filed by the RP is not maintainable. Reliance has been placed on the judgment of the Hon'ble Supreme Court dated 25.09.2023 in Civil Appeal Nos.5985-6001 of 2023 in Regen Powertech Pvt. Ltd. vs. Giriraj Enterprises and Anr. The Hon'ble Supreme Court in the above judgment made following observations: "We are of the opinion that in view of the facts and circumstances, the Resolution Professional should not have filed the present appeals. The Resolution Professional should have maintained a neutral stand. It is for the aggrieved parties, including the Committee of Creditors of Regen Powertech Private Limited (RPPL) and Regen Inf....
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....inion on the nature of the claim of Respondent No.1 and category, under which the claim is required to be accepted. The first question which needs to be answered in the present Appeal is as to whether claim filed by Respondent No.1 was entitled to be verified and accepted by the RP or the claim was liable to be rejected on the ground that Respondent No.1 has not invoked the guarantee prior to insolvency commencement date. Learned Counsel for the Appellant in support of his submission has relied on judgment of this Tribunal in Company Appeal (AT) (Ins.) No.484 of 2023 - Ankur Kumar vs. Sustainable Agro-Commercial Financial Ltd. decided on 06.02.2025 by this Tribunal as well as judgment of the Hon'ble Supreme Court in China Development Bank (supra). Learned Counsel for the Respondent on the other hand placed heavy reliance on the judgment of the Hon'ble Supreme Court in China Development Bank and judgments of this Tribunal in M/s Edelweiss Asset Reconstruction Co. Ltd. vs. V. Mahesh and Anr. - Company Appeal (AT) (CH) (Ins.) No.226 of 2021 decided on 13.12.2021; the judgment of this Tribunal in Export Import Bank of India vs. Resolution Professional, JEKPL Pvt. Ltd. - Company Appeal ....
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....s of Contract Act, came to the conclusion that even if right cannot be enforced by reason of the applicability of the moratorium, the claim will still exist. It was held that whether the cause of action for invoking the guarantee has arisen or not is not relevant for considering the definition of claim. It is useful to extract paragraph 65 of the judgment, where following was laid down: "65. Another argument was canvassed based on the definition of "claim" under section 3(6) of the Insolvency and Bankruptcy Code, 2016. If the right to payment exists or if a breach of contract gives rise to a right to payment, the definition of claim is attracted. Even if that right cannot be enforced by reason of the applicability of the moratorium, the claim will still exist. Therefore, whether the cause of action for invoking the guarantee has arisen or not is not relevant for considering the definition of claim." 21. The above judgment clearly lays down that even if right cannot be enforced by reason of applicability of the moratorium, the claim will still exist. In the present case, the claim was filed by Respondent No.1, even though the guarantee was not invoked. The acceptance of con....
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....ition of 'claim' and the claim submitted by Respondent No.1 24. Now, coming to the observations made by the Adjudicating Authority in the impugned order regarding that RP has entered into adjudication of the claim. Suffice it to say that the RP under the CIRP Regulations, under Regulation 13, has a duty to verify every claim as on the insolvency commencement date. The RP, thus, for verification of the claim has to look into the nature of the claim, the basis of the claim, the fact that whether the RP has verified the claim or not, it cannot be said to be adjudication of the claim. The verification of claim is a statutory duty of the RP, enforced by Regulation 13. The decision of the RP to verify or not verify a claim, may be erroneous, but that cannot be said to be adjudication of the claim by RP. The Adjudicating Authority has rightly held that RP has no adjudicatory function, which is the law laid down by the Hon'ble Supreme Court in Swiss Ribbons. We, thus, are of the view that the act of not verifying the claim by the RP and communicating email dated 13.07.2021 and 23.01.2021 giving reason for non-verification, cannot be said to be in excess and abuse of the duties of th....