2020 (11) TMI 997 - Tri - Companies Law

Rejection of the claim by the RP - claim over an arbitral award directing the corporate debtor to pay the amount - HELD THAT - Many a times there could be a possibility to the creditors not knowing about initiation of CIRP. It comes out through paper publication. In normal practice, service through paper publication comes into picture when personal service is not effected. That option is not available. So in a situation like this, there is every possibility for missing out information, but that cannot take away the primary right of realization against the debtor. Therefore, it cannot be made straight jacket formula to reject the claims outright at least until before approval of the plan by the Adjudicating Authority. The resolution professional is directed to consider this claim on merits - Application disposed off.

Summary

Issues:
1. Application for remuneration by the IRP
2. Claim application over an arbitral award rejected by the RP

Analysis:
1. Application for remuneration by the IRP:
The Tribunal heard an application filed by the Insolvency Resolution Professional (IRP) seeking remuneration already approved by the Committee of Creditors (CoC). The RP was directed to communicate with the CoC to ensure the payment is made by the next hearing date. This decision aimed to address the timely disbursement of approved remuneration to the IRP, ensuring procedural compliance and fairness in the insolvency process.

2. Claim application over an arbitral award rejected by the RP:
A claim application was filed by a claimant concerning an arbitral award directing the corporate debtor to pay a substantial amount. The claimant had initiated execution proceedings against the debtor upon non-payment of the awarded sum. Despite filing the claim with the RP upon learning about the Corporate Insolvency Resolution Process (CIRP) initiation, the RP rejected the claim citing procedural reasons and the approval of the resolution plan by the CoC.

The Tribunal noted that the rejection solely based on timing and approval of the resolution plan was not justified, especially considering the pending execution proceedings. It emphasized the importance of ensuring creditors' rights and the need for thorough verification of claims before approving resolution plans. The RP was directed to reconsider the claim on its merits, highlighting the significance of due diligence and equitable treatment of creditors in insolvency proceedings.

Overall, the judgment underscored the need for meticulous consideration of claims, proper record-keeping, and proactive efforts by the RP to safeguard creditors' interests and uphold the objectives of the insolvency framework. The decision aimed to balance the efficiency of resolution processes with the protection of creditors' rights, emphasizing the importance of fair and transparent insolvency proceedings.