2022 (3) TMI 989 - Tri - Insolvency and Bankruptcy

Seeking admission of claim as Financial Creditor - seeking reconstitution of COC with revised voting rights - seeking to pass necessary advisory/instruction to the respondent IRP not to show any further partiality, biasness, delinquency and non-professional approach against the present applicant - verification of claim of the applicant - HELD THAT - From the bare perusal of the records, it is seen that the Respondent has not verified the documents sent by the applicant and has not passed any order regarding approval or rejection of claim of the applicant. The CIR Process is a time bound process and the IRP should have verified the claim of all the claimants as soon as possible for timely completion of the CIR Process. The present application stands disposed of with the direction to the applicant herein to provide all the information and related documents in respect of its claim before Respondent within seven days and in return the IRP shall examine the same within seven days, after giving due opportunity to the present applicant - the process should be completed within 15 days from today.

Summary

Issues:
1. Claim admission and reconstitution of Committee of Creditors (COC)
2. Allegations of partiality and bias by the Interim Resolution Professional (IRP)
3. Verification and approval of claim by the IRP within the stipulated time frame

Analysis:

Claim Admission and COC Reconstitution:
The application was filed under Section 60 (5) of the Insolvency & Bankruptcy Code, 2016, seeking directions for the admission of the claim as a Financial Creditor of the Corporate Debtor and the reconstitution of the COC with revised voting rights. The facts revealed that the IRP did not verify the documents submitted by the applicant and did not make a decision regarding the approval or rejection of the claim. The Tribunal emphasized the importance of timely verification of claims in the Corporate Insolvency Resolution (CIR) Process and directed the applicant to provide all necessary information within seven days for examination by the IRP. The IRP was instructed to verify the claims based on relevant documents and records within 15 days to ensure compliance with the provisions of the Code.

Allegations of Partiality and Bias:
The applicant alleged partiality, bias, and non-professional conduct by the IRP in handling the claim. Despite multiple email communications, the IRP had not approved or rejected the claim, leading to concerns regarding the fair treatment of the applicant. The Tribunal did not make any conclusive remarks on whether the loan was settled or not but directed the IRP to reexamine the claims based on available documents and audited balance sheets of the Corporate Debtor. The order aimed to ensure transparency, good faith, and adherence to the principles of justice and fairness in the resolution process.

Verification and Approval of Claim:
The Respondent contended that the applicant's claim was not crystallized and that, according to the company's records, the loan account had already been settled. However, objections were raised against the claim without a formal verification process being conducted by the IRP. The Tribunal stressed the need for prompt verification of claims to facilitate the timely completion of the CIR Process. The order mandated the IRP to examine the provided information within seven days, allowing the applicant an opportunity to present relevant documents. The overall objective was to ensure a thorough verification process and a fair resolution of the claim within the specified timeframe.

In conclusion, the Tribunal's judgment addressed the issues of claim admission, COC reconstitution, allegations of partiality, and the verification and approval of the claim in a structured manner, emphasizing the importance of procedural compliance and fair treatment in insolvency proceedings.