2021 (3) TMI 1386 - Tri - Insolvency and Bankruptcy

Seeking direction to Resolution Professional to restore the claim of the applicant as it was lodged in accordance with the arbitration award - seeking to direct the RP to provide details, documents and information sought by the applicant in stipulated time period - HELD THAT - It is found that RP received the claim from the applicant and verified the same according to the information available, thereafter, on receipt of additional information from Mr. Vasant Modi (Suspended Board of management) regarding the arbitration award. Hence the claim was provisionally admitted taking into consideration the arbitration award. However, on receipt of a mail from suspended board of management and RBI, as stated herein above, the claim of the applicant is refused by the RP. The said facts are duly been updated to the applicant about the status of his claim. Based on the documents and the information so provided by the applicant, the RP has to collate and place the same before the CoC for their decision. The Supreme Court of India in Essar Steel India Limited 2019 (11) TMI 731 - SUPREME COURT as relied by the RP, wherein it is observed that it is the responsibility of the RP to collect, collate and finally admit claims of all creditors. The role of the RP is not adjudicatory but administrative. Hence, the allegation so made by the applicant in the application is baseless and without any substance. The application so filed by the applicant is not maintainable, as the RP has already collated the genuine claim of the applicant based on the document, so filed by the applicant - Application dismissed.

Summary

Issues Involved:
1. Restoration of the applicant's claim as per the arbitration award.
2. Provision of details, documents, and information by the Resolution Professional (RP).
3. Legitimacy of the RP's reduction of the applicant's claim.
4. Calculation discrepancies and methods adopted by the RP.

Issue-wise Detailed Analysis:

1. Restoration of the applicant's claim as per the arbitration award:
The applicant sought the restoration of their claim, initially lodged in accordance with an arbitration award. The applicant's claim, initially valued at Rs. 4,51,96,588.08/-, was significantly reduced to Rs. 69,38,050.38/- by the RP. The arbitration award, passed on 04.04.2016, was challenged but reached finality after dismissal by the District Court, Delhi. The RP, however, recalculated the claim based on the arbitration award, which provided for 18% per annum interest instead of the 36% mentioned in the sanction letter. The RP's recalculations were presented and discussed in the CoC meetings.

2. Provision of details, documents, and information by the Resolution Professional (RP):
The applicant requested the RP to provide details, documents, and information within a stipulated time period. The RP provisionally accepted the applicant's claim and later revised it based on additional information from the suspended management and RBI. The RP communicated these updates to the applicant, including recalculations and reasons for the reduction in the claim amount.

3. Legitimacy of the RP's reduction of the applicant's claim:
The applicant argued that the reduction of their claim was "illegal, arbitrary and erroneous." The RP, however, justified the reduction by stating that the initial claim was provisional due to the absence of the financial statements of Perfect Boring Pvt. Ltd. for the relevant period. The RP recalculated the claim based on the arbitration award and additional information provided by the suspended management and RBI. The RP's role, as stated by the Supreme Court in "Essar Steel India Limited," is administrative, not adjudicatory, and involves collecting, collating, and admitting claims.

4. Calculation discrepancies and methods adopted by the RP:
The applicant alleged that the RP adopted a "Pick and Choose method" and erred in calculations. The RP recalculated the claim considering the arbitration award and interest credited to the loan account. The RP's revised calculations were based on the principal outstanding, security deposits, interest rates, and payments made after the loan recall notice dates. These recalculations were presented in detailed tables, showing discrepancies between the applicant's and RP's figures.

Conclusion:
The Tribunal found that the RP had acted within their administrative role, collecting and collating claims based on available information and additional inputs from the suspended management and RBI. The RP's recalculations and updates were communicated to the applicant and the CoC. The Tribunal dismissed the applicant's application, stating that the RP had collated the genuine claim based on the documents provided by the applicant. The application was deemed not maintainable, and the RP's actions were upheld.