2019 (11) TMI 1595 - Tri - Insolvency and Bankruptcy

Admission of claim of applicant, which is undergoing voluntary liquidation process - Case of respondent is that the claim rejected vide letter dated May 14, 2019 was not part of the declaration dated June 13, 2016 - HELD THAT - Counsel for the applicant has referred to the letter of rejection wherein it is clearly brought out by the liquidator that balance amount of ₹ 16,18,118 is due and payable to the applicant but for certain reasons best known to the liquidator the claim was rejected with the request to the appellants/applicant to approach appropriate authority for the claim of rest of the amount against the company under liquidation. Jurisdiction - Power of Authority to adjudicate upon the application filed by the appellant/applicant - HELD THAT - Counsel for the applicant has referred to section 59 of the Insolvency and Bankruptcy Code, 2016 wherein under sub-section (6), it is provided that the provision of sections 35 to 53 of Chapter III and Chapter VI shall apply to voluntary liquidation proceedings for corporate persons with such modifications as may be necessary. In view of this provision, the applicant has filed appeal/application under section 42 of the IBC, 2016 which provides remedy against the decisions of the liquidator. The submissions made by counsel for the applicant are plausible. The objection raised by counsel for the liquidator is devoid of merits and stands rejected. In terms of the above, the application is allowed. Application disposed off.

Summary

Issues:
1. Setting aside rejection of claim in voluntary liquidation process.
2. Jurisdiction of the Authority to adjudicate the appeal/application.

Analysis:
1. The petitioner sought to set aside the rejection of their claim in the voluntary liquidation process of TEIL Projects Ltd. The liquidator rejected the claim citing it was not part of the initial declaration. The petitioner explained that due to pending issues, a claim of ?16,18,118 was inadvertently missed in the declaration. The liquidator acknowledged the balance due but rejected the claim, advising the petitioner to seek the remaining amount from the appropriate authority. The Tribunal found the rejection unjustified and directed the liquidator to admit the claim as per form B filed by the petitioner, setting aside the rejection letter.

2. The liquidator raised an objection to the Tribunal's jurisdiction to adjudicate the appeal/application. The petitioner cited Section 59 of the Insolvency and Bankruptcy Code, 2016, which allows for appeals against the decisions of the liquidator in voluntary liquidation proceedings. The Tribunal agreed with the petitioner's interpretation of the law and dismissed the objection, asserting its authority to hear the matter. The application was allowed, and the liquidator was instructed to admit the petitioner's claim within 10 working days, notifying the petitioner accordingly. The rejection letter dated May 14, 2019, was set aside concerning the petitioner's claim. Additionally, a memo to amend the cause title from Tata Engineering India Ltd. to TEIL Projects Ltd. was permitted by the Tribunal.