2019 (11) TMI 1494 - Tri - Insolvency and Bankruptcy

Dishonor of Cheque - contention of the learned Counsel for the Applicant that the issue has already adjudicated by the judicial authority and it is not open to the Resolution Professional to examine again on the same issue is without jurisdiction is not at all tenable - HELD THAT - It is settled position of law that once the case is admitted by the Adjudicating Authority the entire CIRP will be conducted by the RP/IRP with the approval of CoC on the subject and subject to final the jurisdiction of the Adjudicating Authority. The Resolution Professional is not expected to accept claim(s) without verification of those claims basing on the documents and it is his duty to do so. Since the Applicant has not furnished the documents as sought for by the Resolution Professional so as to consider the claim as per law the impugned action of Resolution Professional does not warrant any interference by the Adjudicating Authority. However the Applicant can be granted liberty to file necessary documents as sought for by the Resolution Professional so as to reconsider the issue. The Applicant is granted liberty to file necessary documents as sought by the Resolution Professional to substantiate its claims within a period of one week from receipt of the copy of the order - Application disposed off.

Issues Involved:
1. Admissibility and verification of claims by the Resolution Professional (RP).
2. Rejection of claims due to insufficient documentation.
3. Legal validity of claims based on judicial admissions and promissory notes.
4. Duplicate claims and multiple submissions by the claimant.
5. Responsibilities of the Resolution Professional in verifying claims.

Issue-wise Detailed Analysis:

1. Admissibility and Verification of Claims by the Resolution Professional (RP):
The Applicant/Claimant, Madhu Steel Corporation, filed I.A. Nos. 467 & 468 of 2019 seeking to direct the Resolution Professional to accept their claims. The claims were based on credit bills and postdated cheques issued by the Corporate Debtor, which were dishonored. The claims were supported by judicial admissions, promissory notes, and other legal documents. However, the RP rejected these claims due to the lack of sufficient supporting documents, such as contractual agreements and purchase orders. The Tribunal emphasized that it is the RP's duty to verify claims based on provided evidence and that the Applicant must furnish necessary documents to substantiate their claims.

2. Rejection of Claims Due to Insufficient Documentation:
The RP rejected the claims citing several reasons, including the absence of a contractual agreement, purchase orders, VAT returns, and certified statements of accounts. The Tribunal noted that the RP had requested these documents to substantiate the claims, but the Applicant failed to provide them. The Tribunal upheld the RP's decision, stating that the RP is not expected to accept claims without proper verification and documentation.

3. Legal Validity of Claims Based on Judicial Admissions and Promissory Notes:
The Applicant argued that the claims were supported by judicial admissions and promissory notes, which should be sufficient for acceptance. The Tribunal acknowledged the legal principle that judicial admissions can form the foundation of rights. However, it reiterated that the RP must scrutinize claims based on evidence. The Tribunal found that the RP acted within his jurisdiction in demanding additional documents to verify the claims.

4. Duplicate Claims and Multiple Submissions by the Claimant:
The RP observed that the Applicant had submitted multiple claims for the same invoices, leading to potential duplication. The claims were filed in different forms (Form B and Form C) on various dates. The Tribunal noted that the RP had the right to seek clarification and additional documents to resolve these discrepancies. The RP's actions were in line with the regulations governing the insolvency process, which require creditors to prove their debts.

5. Responsibilities of the Resolution Professional in Verifying Claims:
The Tribunal emphasized that the RP is responsible for verifying claims and determining their admissibility based on the provided documents. The RP's duty includes calling for clarifications and additional information from creditors. The Tribunal found that the RP had acted appropriately by requesting necessary documents and that the Applicant's failure to provide them justified the rejection of the claims.

Conclusion:
The Tribunal concluded that the RP's rejection of the claims was justified due to the Applicant's failure to provide necessary documents. The Tribunal granted the Applicant liberty to file the required documents within one week and directed the RP to reconsider the claims upon receipt of the documents. The decision underscores the importance of proper documentation and verification in the insolvency resolution process.

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