2019 (2) TMI 1660 - AT - Insolvency and Bankruptcy

Jurisdiction - whether the Resolution Professional has jurisdiction to reject the claim? - HELD THAT - The issue fell for consideration before the Hon ble Supreme Court in SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT where it was held that Unlike the liquidator the resolution professional cannot act in a number of matters without the approval of the committee of creditors under Section 28 of the Code which can by a two-thirds majority replace one resolution professional with another in case they are unhappy with his performance. Thus the resolution professional is really a facilitator of the resolution process whose administrative functions are overseen by the committee of creditors and by the Adjudicating Authority. The Resolution Professional is directed to act in accordance with the directions of the Adjudicating Authority. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Jurisdiction of the Resolution Professional to reject a claim in its entirety without examining the evidence.

The judgment by the National Company Law Appellate Tribunal, New Delhi, involved a dispute arising from the corporate insolvency resolution process against a specific company. The respondent, an Operational Creditor, filed a claim which was partially rejected by the Resolution Professional. The Adjudicating Authority directed the Resolution Professional to re-examine the claim based on evidence provided by the creditor. The central issue in this appeal was whether the Resolution Professional had the authority to reject a claim entirely without assessing the evidence presented. The Tribunal referred to a Supreme Court decision emphasizing that Resolution Professionals do not possess adjudicatory powers but are responsible for administrative tasks such as vetting and verifying claims. The Tribunal, in line with the Supreme Court ruling, upheld the Adjudicating Authority's order, directing the Resolution Professional to adhere to its instructions.

In the case at hand, the National Company Law Appellate Tribunal, New Delhi, addressed the specific issue of the Resolution Professional's jurisdiction to reject a claim without delving into the evidence provided. The Tribunal cited a Supreme Court decision highlighting that Resolution Professionals do not possess adjudicatory powers but are primarily tasked with administrative functions related to verifying claims. The Tribunal upheld the Adjudicating Authority's order, emphasizing that the Resolution Professional must act in accordance with the directions provided. This decision underscores the limited role of Resolution Professionals in the insolvency resolution process, focusing on administrative rather than quasi-judicial responsibilities.