2019 (7) TMI 1623 - AT - Insolvency and Bankruptcy

CIRP process - Operational Creditor or not - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - 'Resolution Professional' rejected the claim on the ground that the Appellant is not 'Operational Creditor' and with regard to their claim arbitration is pending wherein claim petition filed by 'Deepak Cables (India) Limited' and counter claim raised by the Appellant- 'Power Grid Corporation of India' - HELD THAT - We are not inclined to decide the claim of the Appellant at this stage as the Appellant will get right to file fresh claim application before the liquidator who is required to decide the same in terms of Sections 38 39 of the 'I B Code'. In such case, if the claim of the Appellant is rejected by the liquidator under Section 40, it will be open to the Appellant to prefer an appeal against the decision of the liquidator under Section 42 of the 'I B Code'. So far as pendency of the arbitration proceeding is concerned, after liquidation it is open to the Arbitral Tribunal to proceed in the arbitration. However, we are not inclined to express any opinion with regard to the same - if the claim is filed by the 'Corporate Debtor'- 'Deepak Cables (India) Limited', there is no bar to proceed in the arbitration and if it proceeds, its counter claim is to be decided. If the counter claim is awarded in favour of the Appellant and if certain amount is payable to it, it can take advantage of the same. Appeal disposed off.

Issues:
1. Appellant's claim as an Operational Creditor rejected by Resolution Professional.
2. Rejection of separate application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
3. Passing of liquidation order by the Adjudicating Authority.
4. Appellant's right to file a fresh claim application before the liquidator.
5. Pendency of arbitration proceedings and its impact post-liquidation.
6. Multiple arbitration proceedings involving claims and counterclaims.
7. Stay of arbitration proceedings by the Hon'ble High Court of Delhi.

Analysis:
1. The Appellant filed claims as an Operational Creditor against the Corporate Debtor, alleging non-supply of goods and incomplete services. The Resolution Professional rejected the claim, citing pending arbitration involving the Corporate Debtor and the Appellant.

2. Subsequently, the Appellant filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, before the Adjudicating Authority, which was rejected. This led to the filing of appeals by the common Appellant, 'Power Grid Corporation of India.'

3. The Adjudicating Authority passed an order of liquidation on 4th July, 2019, after which the Appellant approached the Appellate Tribunal with similar pleas as before the Resolution Professional and the Adjudicating Authority.

4. The Appellate Tribunal refrained from deciding the Appellant's claim at that stage, indicating the right of the Appellant to file a fresh claim application before the liquidator as per Sections 38 & 39 of the I&B Code. The Appellant could appeal the liquidator's decision under Section 42 if the claim is rejected.

5. Regarding the arbitration proceedings, the Tribunal stated that post-liquidation, the Arbitral Tribunal could proceed with the arbitration. The Tribunal did not express any opinion on this matter but highlighted the possibility of the Corporate Debtor filing claims and the Appellant's counterclaims being decided.

6. The Tribunal noted the existence of multiple arbitration proceedings involving claims and counterclaims between the parties, with some proceedings stayed by the Hon'ble High Court of Delhi. The liquidator was instructed to proceed with claim decisions despite the arbitration stays.

7. Lastly, the Tribunal clarified that it had not expressed any opinion on the Appellant's claim, leaving it to be decided by the appropriate authority or through arbitration proceedings. All appeals were disposed of with liberty, and no costs were awarded.

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