2021 (2) TMI 1365 - AT - Insolvency and Bankruptcy

Refusal to accept the application of Appellant seeking modification of order dated 19th July 2018 - direction in the name of Resolution Professional to abide the terms and conditions of four work orders - direction to not take charge or control of the current account operated by the AppellantCIRP being at an advanced stage and liquidator having been appointed - HELD THAT - It is opined that the appeal can be disposed off without issuing notice to Respondents - the notice is dispensed with - Since a liquidator has been appointed under provisions of Section 38 of the Insolvency and Bankruptcy Code 2016 (I B Code) it is enjoined upon the liquidator to receive and collect the claims of the creditors within a period of 30 days from the date of commencement of liquidation process. The liquidator being a quasi-judicial authority is empowered to admit or reject the claim in whole or in part and such determination is subjected to appeal under the provisions embodied in Section 42 of the I B Code. The appeal lies to the Adjudicating Authority i.e. NCLT. In view of these statutory provisions there is no difficulty in holding that the Appellant would not be precluded from filing its claim before the liquidator. The impugned order cannot be construed to curtail or prejudicially affect this statutory right. In fact the Adjudicating Authority itself has observed that the Appellant would be entitled to lodge his claim before the Competent Court/ Authority. The impugned order need not be interfered with which does not suffer from any legal infirmity - this appeal is disposed off in the light of foregoing observations giving liberty to the Appellant to approach the liquidator with its claim within one week from today.

Summary

Issues:
1. Modification of order dated 19th July, 2018 sought by the Appellant.
2. Adjudicating Authority's refusal to entertain certain prayers due to the Corporate Insolvency Resolution Process (CIRP) culminating in liquidation.
3. Appellant's right to approach the liquidator for filing claims post liquidation process.

Analysis:

Issue 1: The Appellant sought modification of the order dated 19th July, 2018, which was declined by the Adjudicating Authority citing its relation to the admission of the Company Petition. The Authority mentioned that since the CIRP against the Corporate Debtor had progressed to liquidation, the modification could not be entertained. However, the Appellant was assured the right to seek recourse in other forums for any incurred losses.

Issue 2: The Adjudicating Authority, while refusing to entertain certain prayers, emphasized that the CIRP had advanced to the point of liquidation with the appointment of a liquidator. It clarified that the Appellant could approach other forums for losses incurred, and the liquidator was mandated under Section 38 of the Insolvency and Bankruptcy Code, 2016, to receive and adjudicate on creditors' claims within 30 days of the liquidation process commencement. The liquidator's decisions on claims could be appealed under Section 42 of the I&B Code before the Adjudicating Authority.

Issue 3: The Tribunal, after hearing the Appellant's representation, decided to dispose of the appeal without issuing notice to the Respondents. It was concluded that the Appellant could file its claim before the liquidator as per statutory provisions, and the impugned order did not impede this right. The Appellant was granted liberty to approach the liquidator with its claim within a week from the judgment date, and the order was to be promptly communicated to the Adjudicating Authority.

This comprehensive analysis of the judgment from the National Company Law Appellate Tribunal, New Delhi, highlights the key issues addressed, the reasoning behind the decisions made, and the rights and obligations of the parties involved in the context of the Insolvency and Bankruptcy legal framework.