2021 (7) TMI 1081 - Tri - Insolvency and Bankruptcy

Seeking setting aside of the rejection of claim of the Applicant by the Liquidator - Section 42 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - The Applicant charging 12% interest on the outstanding amount is not wrong. Moreover, the contention of the Respondent that the assignment of debt (if it can be so called) in the form of letters of ultimate suppliers, require stamp duty to be paid as mandated under law. However, the Respondent has admitted to the fact that ₹ 3,61,595/- was reflecting in the books of accounts of the Corporate Debtor, on the basis of which the Respondent admitted the said principal amount. Therefore, there are no reason in delving into the approval of the principal amount and the claim of the Applicant including interest is due and payable by the Corporate Debtor. The claim of the Applicant in respect of M/s. Shyam Enterprises cannot be denied, to the extent of the principal amount. And the claim of the Applicant with respect to the interest charged is still unclear, as no proof/documents/evidence have been provided by the Applicant. In the circumstances, the Liquidator shall verify the veracity of the claims of the Applicant with respect to the interest amount and take a decision accordingly. It is seen that the Corporate Debtor was maintaining a running account on ledger basis of both the Applicant as well as the ultimate suppliers. The Liquidator while accepted the claim of ₹ 3,61,595/- of the Applicant in respect of M/s. Sohan Lal Sons, there is no reason why a different and a rather inconsistent logic/approach shall be adopted by the Liquidator in terms of the claim of the Applicant in respect of M/s. Shyam Enterprises, in particular when the Corporate Debtor remained under the shadows of BIFR and hence, isolated itself from any claims/recovery. It is seen that the claim of the Applicant excluding interest amount of ₹ 7,86,276/- (M/s. Shyam Enterprises) is admissible - Liquidator is directed to act in accordance with the observations of this Adjudicating Authority.

Summary

Issues:
Rejection of claim by the Liquidator under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Background and Claim Rejection:
The Applicant filed an Application seeking to set aside the rejection of their claim by the Liquidator under the Insolvency and Bankruptcy Code, 2016. The Applicant was involved in coal supply, acting as a middleman for the Corporate Debtor. The Liquidator rejected part of the claim, citing reasons such as lack of agreements, invoices, and time-barred claims.

2. Claim Details and Rejection:
The Applicant submitted claims for two proprietary concerns, detailing outstanding amounts owed by the Corporate Debtor. The Liquidator accepted the principal amount for one concern but rejected the interest component, mentioning the absence of documentation and time limitations. Similar rejection was made for the other concern based on the same grounds.

3. Operational Creditor Definition and Debt Assignment:
The Applicant argued as an Operational Creditor under the Code, emphasizing legal debt assignment from ultimate suppliers to them. Letters from suppliers were presented to support this transfer of debt ownership. The Applicant highlighted restrictions faced due to BIFR proceedings and subsequent legal actions against the Corporate Debtor.

4. Respondent's Counterarguments and Submissions:
The Respondent disputed the authenticity of communications from suppliers and questioned the lack of acknowledgment in the Corporate Debtor's accounts for one of the claims. Issues regarding stamp duty on debt assignment and pending legal actions were raised to challenge the Applicant's claims.

5. Adjudicating Authority's Observations and Decision:
The Adjudicating Authority reviewed ledger accounts, invoices, and supplier letters to assess the validity of claims. It found merit in the claims related to the principal amounts owed by the Corporate Debtor. The Authority directed the Liquidator to accept the claims excluding the interest component for one concern, while further verification was needed for interest charges in the other concern.

6. Conclusion and Directive:
The Authority concluded that the claims, excluding interest, were admissible based on the evidence provided. It emphasized the need for the Liquidator to act in accordance with its observations, ensuring fair treatment of the Applicant's claims under the Insolvency and Bankruptcy proceedings.