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2021 (8) TMI 1058 - Tri - Insolvency and BankruptcySeeking a direction upon the RP to include its claim of 9.02 crore and pending disposal of the application direct that no Resolution Plan be considered or approved - Joint Venture agreement - HELD THAT - Since it was an ongoing project and final accounts could not have been drawn up either at the stage of invitation of claims or the stage of approval of the resolution plan the RP would have been well advised to make provision for a contingency in case the corporate debtor owed any dues to the applicant after finalization of accounts - there was a gross error of judgment on the part of the Resolution Professional who is also a qualified Chartered Accountant in not doing so. What compounds the problem is the same Resolution Professional has acknowledged the liability in the books of accounts of the corporate debtor while functioning as RP. Therefore it does not stand to reason as to how this claim could not be included with the dues payable to the Operational Creditors. Here again is a case where immediately after the RP refused to accept the claim the applicant knocked on the doors of this Adjudicating Authority seeking a determination of the claim of the applicant even before the approval of the Resolution Plan. While both matters i.e. this application as well as the application for approval of the resolution plan were heard and reserved for orders together the erstwhile Bench approved the Resolution Plan alone while posting this application for hearing once again on 24.03.2020. No reason has been adduced in that order as to why this particular application was also not decided. The RP is hereby directed to draw up final accounts between the corporate debtor and the Joint Venture and include any claim payable to the applicant in the list of operational creditors and also make payments under the resolution plan - Application disposed off.
Issues Involved:
1. Inclusion of the applicant's claim in the Corporate Insolvency Resolution Process (CIRP). 2. Role and actions of the Resolution Professional (RP) in handling the applicant's claim. 3. Acknowledgment of liability in the corporate debtor's balance sheet. 4. Legal implications of the RP's refusal to accept the applicant's claim. 5. Judicial review and directions regarding the applicant's claim post-approval of the Resolution Plan. Issue-wise Detailed Analysis: 1. Inclusion of the Applicant's Claim in the CIRP: The applicant, a joint venture partner, sought inclusion of its claim of ?9.02 crore against the corporate debtor in the CIRP. The applicant argued that the corporate debtor acknowledged this liability in its 54th Annual Report. The RP, however, rejected the claim, stating that the amount was to be adjusted internally within the joint venture. 2. Role and Actions of the Resolution Professional (RP): The RP's role in the collation of claims was scrutinized. The applicant contended that the RP's actions amounted to adjudication rather than collation, which is against the principles established in Swiss Ribbons v. Union of India. The RP requested additional documentation to substantiate the claim, which the applicant provided, but the RP ultimately rejected the claim, citing internal adjustments within the joint venture. 3. Acknowledgment of Liability in the Corporate Debtor's Balance Sheet: The applicant relied on the corporate debtor's balance sheet, which acknowledged an outstanding balance of ?907 lakh. The RP argued that balance sheets prepared under compulsion of law do not amount to acknowledgments of liability, citing legal precedents such as Bengal Silk Mills Co. v. Ismail and Kashinath v. New Akot Cotton Ginning and Pressing Co. Ltd. 4. Legal Implications of the RP's Refusal to Accept the Applicant's Claim: The tribunal found that the RP erred in not making provisions for a contingency regarding the applicant's claim. The RP's acknowledgment of the liability in the books of accounts while functioning as RP was noted. The tribunal emphasized that the applicant diligently pursued legal remedies and should not be left remediless due to the RP's refusal to accept the claim. 5. Judicial Review and Directions Regarding the Applicant's Claim Post-Approval of the Resolution Plan: The tribunal held that the applicant's claim is maintainable even after the approval of the resolution plan. The RP was directed to draw up final accounts between the corporate debtor and the joint venture and include any payable claim to the applicant in the list of operational creditors. The tribunal underscored that justice must be served, and the applicant should not be left without a remedy. Conclusion: The tribunal directed the RP to finalize accounts and include the applicant's claim in the list of operational creditors, ensuring that payments are made under the resolution plan. The application was disposed of with these directions, emphasizing the need for fairness and justice in the insolvency resolution process.
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