2019 (11) TMI 1521 - Tri - Companies Law

Admission of various claims - determination of the voting share of various financial creditors on the Committee of Creditors (CoC) of the Corporate Debtor - It is the case of the Applicant that the Respondent Nos. 3 and 4 are unable to satisfy the criteria laid down in Regulation 8(2)(b)(ii) since they have neither committed any amounts to the Corporate Debtor under a facility, nor has the Corporate Debtor drawn such amount - HELD THAT - The points for consideration are basically of two-fold whether the documents relied upon by the Respondents for being considered as Financial Creditors are correct and will the same fasten any liability on the Corporate Debtor who is projected as obligor/guarantor as the case may be. The basic principle is that Documents speak for themselves , a simple verification of the above documents infact are sufficient enough to conclude that the Corporate Debtor has a liability to pay the amounts as claimed in the documents. Any amount of interpretation from the side of the Applicants that there is no privity of Contracts or the term 'obligor' does not bind them, nor documents does not directly or indirectly connect the Claimants with that of the Corporate Debtor, is of no consequence or for consideration. The Applications doesn't deserve any consideration by this bench are required to be dismissed on merits - Application dismissed.

Summary

Issues Involved:
1. Admission of various claims by the Resolution Professional.
2. Determination of the voting share of financial creditors on the Committee of Creditors (CoC).
3. Validity of claims by certain financial creditors.
4. Maintainability of the applications under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.

Issue-wise Detailed Analysis:

1. Admission of Various Claims by the Resolution Professional:
The applications challenged the admission of claims by the Resolution Professional (RP) and the subsequent determination of the voting share of financial creditors on the CoC. HDFC, the applicant in M.A. No. 999/2019, contested the acceptance of claims from Respondent Nos. 2 to 4, arguing that if these claims were not accepted, HDFC's voting share would increase significantly. Dipco, the applicant in M.A. No. 1124/2019, also contested the RP's acceptance of claims from Vistra and Aasan, arguing that there was no debtor-creditor relationship between the Corporate Debtor and these entities.

2. Determination of the Voting Share of Financial Creditors on the CoC:
HDFC argued that the wrongful acceptance of claims from Respondent Nos. 2 to 4 by the RP reduced their voting share on the CoC from 51% to 21.26%. They contended that the RP should re-adjudicate these claims to correct the voting ratio.

3. Validity of Claims by Certain Financial Creditors:
HDFC and Dipco argued that Respondent Nos. 2 to 4 did not meet the criteria to be considered financial creditors. HDFC contended that the Corporate Debtor's liability under the Debenture Trust Deeds (DTDs) did not extend to Respondent Nos. 2 to 4, and there was no proof of their locus standi. Dipco argued that Vistra and IIFL did not provide any documentary evidence to support their claims as financial creditors.

4. Maintainability of the Applications Under Section 60(5) of the Insolvency and Bankruptcy Code, 2016:
Respondent Nos. 2 to 4 raised a preliminary objection regarding the maintainability of the applications, citing the Arcelormittal India Private Limited vs. Satish Kumar Gupta & Ors. case. They argued that such applications could only be entertained after the resolution plan is placed before the CoC and voted upon. The Tribunal agreed, stating that applications of this nature should be filed only after the resolution plan is approved by the CoC to avoid unnecessary delays and to maintain the integrity of the corporate insolvency resolution process.

Conclusion:
The Tribunal dismissed both applications on the grounds of maintainability and merits. It was determined that the applications were premature and could only be considered after the resolution plan was approved by the CoC. The Tribunal directed the Resolution Professional to proceed with the decisions taken in the CoC meeting regarding the approval of the resolution plan.