2019 (2) TMI 1694 - AT - Insolvency and Bankruptcy

Validity of decision of the Resolution Professional - seeking observation to place the matter before the Committee of Creditors - whether Resolution Professional or the Adjudicating Authority can decide whether goods hypothecated, such as four cranes, belongs to the Corporate Debtor or not? HELD THAT - From the record we find that there is a disputed question of fact which cannot be decided by the Resolution Professional or the Adjudicating Authority . The appellant can raise such issue and claim at an appropriate stage, i.e. after moratorium is over. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to order of Adjudicating Authority rejecting claim of Operational Creditor - Disputed claim of Operational Creditor - Decision on ownership of hypothecated goods by Resolution Professional - Appellant's failure to appear for hearing.

Analysis:
The judgment pertains to an appeal challenging the order of the Adjudicating Authority passed against an Operational Creditor. The Operational Creditor's claim was rejected by the Resolution Professional, prompting the appellant to approach the Adjudicating Authority. However, the Adjudicating Authority declined to entertain the application, emphasizing the need to refer the matter to the Committee of Creditors for further consideration in the interest of justice.

A key issue highlighted in the judgment was the disputed claim of the Operational Creditor. The appellant was directed to provide additional information regarding the existence of their claims in the records of the Corporate Debtor, as well as details of the Corporate Debtor's assets and liabilities. Despite the appellant filing an affidavit, the respondent contended that the Corporate Debtor's records did not reflect the claim, and the Interim Resolution Professional's assessment did not support the appellant's case.

Moreover, the judgment referenced a previous decision by the Appellate Tribunal regarding the authority to determine ownership of hypothecated goods, such as cranes, belonging to the Corporate Debtor. It was established that such claims were beyond the jurisdiction of the Resolution Professional, emphasizing the need for a thorough examination at a later stage.

During the hearing, the appellant failed to appear despite repeated calls, leading to the tribunal's observation that the disputed factual question could not be resolved by the Resolution Professional or the Adjudicating Authority. The judgment emphasized that the appellant could raise the issue and claim at a more appropriate stage, specifically after the moratorium period.

In light of the circumstances and the unresolved nature of the claim, the tribunal dismissed the appeal, highlighting the lack of costs associated with the decision. The judgment underscored the importance of addressing disputed claims at the appropriate juncture and refraining from premature adjudication by the Resolution Professional or the Adjudicating Authority.