2019 (6) TMI 460 - AT - Insolvency and Bankruptcy

Consideration of resolution plan as approved by the Committee of Creditors - appellant claims that total claim of the Appellant was not entertained by the Resolution Professional - HELD THAT - The Adjudicating Authority has no jurisdiction to pass any order with regard to any matter pending before the Court of criminal jurisdiction. Further, the parties having given opportunity to move against the Corporate Debtor under sub-section (6) of Section 60 of the I B Code , the Adjudicating Authority cannot prohibit the aggrieved person to file a claim before the Court of competent jurisdiction or an application before the appropriate Forum. This Appellate Tribunal having given liberty to the Appellant to file a claim in terms of sub-section (6) of Section 60 and the impugned order aforesaid to the extent as mentioned in paragraph 13 and quoted above being contrary to the decision of this Appellate Tribunal, is fit to be set aside - Appeal allowed in part.

Issues:
1. Jurisdiction of Resolution Professional to decide creditor claims.
2. Power of Resolution Professional as per Supreme Court judgment.
3. Approval of resolution plan by Committee of Creditors.
4. Adjudicating Authority's jurisdiction over pending matters.
5. Compliance with Section 31 of the I&B Code.

Analysis:

1. The Appellate Tribunal addressed the issue of the Resolution Professional's jurisdiction in deciding creditor claims. Referring to a previous judgment, it was held that the Resolution Professional lacks the authority to adjudicate on claims of creditors, including financial, operational, secured, or unsecured creditors. The Tribunal emphasized that after the moratorium period, a suit or application can be filed against the Corporate Debtor.

2. The Tribunal discussed the Supreme Court's ruling on the Resolution Professional's powers in vetting and verifying claims. The Resolution Professional is tasked with determining the amount of each claim but does not possess adjudicatory powers. In contrast, a Liquidator in liquidation proceedings under the I&B Code is responsible for consolidating and verifying claims, admitting or rejecting them under specific Code sections.

3. In the case at hand, a resolution plan had been approved by the Committee of Creditors but had not been finalized by the Adjudicating Authority within the stipulated time frame. The Tribunal directed the Authority to pass the appropriate order concerning the resolution plan promptly.

4. The Tribunal addressed the Adjudicating Authority's jurisdiction over pending matters, emphasizing that it cannot prohibit aggrieved parties from filing claims before the Court of competent jurisdiction or an appropriate forum, as allowed under Section 60(6) of the I&B Code. An order by the Authority attempting to withdraw or dismiss inquiries, investigations, or proceedings related to the Corporate Debtor was set aside.

5. Finally, the Tribunal set aside the Adjudicating Authority's observation and direction regarding pending inquiries, investigations, and proceedings, as it contradicted the Tribunal's previous decision. The rest of the order approving the plan was upheld. The Tribunal clarified that it did not decide on the Appellant's claim on merit or express any opinion on pending suits or proceedings finalized under Section 31 of the I&B Code.

In conclusion, the Appellate Tribunal allowed the appeal in part, emphasizing the Resolution Professional's limitations, the Authority's jurisdiction, and the need for timely compliance with the I&B Code's provisions.

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