2021 (1) TMI 571 - Tri - Insolvency and Bankruptcy

Direction to Respondent to admit the claim of the applicant as Financial Creditor - direction to not to conduct any meeting in absence of the applicant - seeking declaration that any meeting of Committee of Creditors convened by the Respondent, in absence of the applicant herein as illegal and void apart from other prayer - Section13(1)(b) read with Section 15 of the Code and Regulations - HELD THAT - It is a matter of record that the loan was not reflected in the Income Tax record of the Corporate Debtor that apart the RP has also raised objection with regard to the invalid agreement. In view of the fact that the stamp paper was issued in 2014 and the agreement was entered on 25.01.2017. Maharashtra and Gujarat are the two states which have provisions stating that if stamp is not used or surrendered back within 6 months of the date of issue, then they will be treated as expired. Section 52B(b) of the Maharashtra Stamp Act and Section 52 C of Bombay Stamp (Gujarat Amendment) Act, 2016 states that if any Stamp have been purchased and it is neither used nor any allowances are claimed on it within the period of six months, it will be treated as invalid - Admittedly, the agreement was entered in the State of Maharashtra. On perusal of the Non-Judicial paper (page 106 of the application), it is found that the same was issued on 2014 and the agreement was executed on 25.01.2017. So, in view of the Maharashtra Stamp Act, the said agreement is invalid. Application dismissed.

Summary

Issues:
1. Claim of the applicant as a Financial Creditor under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Validity of the applicant's claim in the Committee of Creditors (CoC) meetings.
3. Rejection of the applicant's claim by the Resolution Professional (RP) based on stamp paper validity and income tax records.

Analysis:
1. The applicant filed an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, claiming to be a financial creditor with a specific amount due. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the applicant submitted necessary documents to prove the claim's existence and non-payment during the CoC meetings.

2. The applicant faced challenges during the CoC meetings, with issues arising due to the absence of the applicant, postponements of meetings, and demands for additional supporting documents by the RP. The RP raised objections regarding the validity of the loan agreement based on stamp paper validity and income tax records not reflecting the loan amount.

3. The RP argued that the stamp paper used for the loan agreement was invalid under the Maharashtra Stamp Act, 1958, as it was issued in 2014, while the agreement was executed in 2017. The RP also highlighted discrepancies in the income tax records of the Corporate Debtor, questioning the applicant's entitlement to claim as a Financial Creditor based on the loan amount not being reflected.

4. The Tribunal analyzed the relevant legal provisions, including Section 52B of the Maharashtra Stamp Act, 1958, and the Supreme Court's ruling on the validity of stamp papers. It was noted that Maharashtra law deems stamps expired if not used or surrendered within six months of issue. As the agreement in question was executed in Maharashtra and the stamp paper issued in 2014, the Tribunal concluded that the agreement was invalid under the stamp act.

5. Consequently, the Tribunal dismissed the applicant's application, emphasizing the invalidity of the agreement based on the stamp paper issue date and the specific provisions of the Maharashtra Stamp Act, leading to the rejection of the applicant's claim as a Financial Creditor. The judgment was comprehensive in addressing the legal aspects and factual circumstances surrounding the applicant's claim and the RP's objections, resulting in the disposal of the application.