2022 (6) TMI 166 - Tri - Insolvency and Bankruptcy

Seeking direction to claim of the applicant submitted on 26.04.2019 as a financial debt owed by the corporate debtor to Vardhman Industries - whether the claims of the applicant have been properly verified before the rejection of the same by the Resolution Professional? - HELD THAT - From the correspondence between the parties, it is clear that no serious effort was made by the Resolution Professional to classify the debts into financial and operational debts of the applicant. There is no denying the fact that the Resolution Professional needs documents and supporting evidence to decide on the nature of a claim for the purpose of admission of the same. The documents brought on record have not shown any kind of non-compliance by the applicant to any query raised by the Resolution Professional in this regard. The very fact that prior to the CIRP both the applicant and the respondent were under the same management would have ensured a better appreciation of the facts presented by the applicant relating to its claim. In the course of the present proceedings, the Resolution Professional could not justify the rejection of the detailed claim made by the applicant and also his inability to classify the same into operational and financial debts. The Resolution Professionals' statements that after receiving details of the claim he could not change his earlier decision to reject the same on the ground that he was advised not to review his original rejection is against the tenets of equity. To sum up, this rejection of the claim of the applicant could not be justified by the Resolution Professional during the present proceedings. This Bench is of the view that the Resolution Professional has failed in his duty to analyze the evidence placed before him regarding the nature of transactions of the applicant reflected in the books of the corporate debtor and present the complete facts regarding the admissibility of the claims made by the applicant before the CoC. The Resolution Professional in the present case was duty-bound to verify these transactions and put the same before the CoC with the complete factual and legal position rather than reject it summarily - this Bench directs the Resolution Professional to reconsider the claims made by the applicant with reference to the evidence already before him. Release of salary - HELD THAT - It is noted that there are claims and counter-claims regarding the genuineness of the documents submitted before this Bench especially those relating to the terms and duration of employment and resignation of the applicants. In this context, it is made clear that this Bench does not provide the forum for deciding on the genuineness of the documents placed in the course of the proceedings. The Resolution Professional is directed to reconsider the claims made by the applicants regarding the payments of their salary, gratuity, and other perks strictly as per the terms and conditions laid down at the time of their employment and put up his findings before the CoC. This Bench, however, cannot decide on the claims and counter-claims made regarding the genuineness of the documents relied upon during the present proceedings and the parties may take up these issues before the Competent Judicial Authorities, if they decide to do so. Seeking direction to the Respondent- Resolution Professional to not interfere in the usage Vodafone-Idea Mobile Numbers belonging to the applicant - HELD THAT - The Resolution Professional is directed not to interfere in the usage of the above mobile numbers and allow the applicant to continue the usage of the SIM cards mentioned in his prayer in his private capacity - Application allowed. Direction to direct Resolution Professional to pay the outstanding amount - HELD THAT - A perusal of the facts of the present application indicates that there is a continuing dispute regarding a few transactions of supply of cotton yarn made by the applicant to the corporate debtor after the initiation of the CIRP. It is also observed that most payments regarding yarn supplies made by the applicant have been made except in the cases of the disputed transactions of supply of yarn. The reasons for the non-payment by the corporate debtor is attributed to the low quality of yarn supplied by the Applicant. The parties have made claims and counterclaims on the quality issue. This Bench is of the view that the prayers made by the applicant cannot be acceded to - Application dismissed.

Summary

Issues Involved:
1. Admission of financial debt claim by Vardhman Industries Limited.
2. Payment of salaries and dues to certain employees during the CIRP period.
3. Usage of mobile numbers by the suspended Managing Director.
4. Payment of outstanding amounts for goods supplied during the CIRP period.

Issue-wise Detailed Analysis:

1. Admission of Financial Debt Claim by Vardhman Industries Limited (CA No.568/2019):
- Application Background: Vardhman Industries Limited, through its Resolution Professional, filed an application against the Resolution Professional of Vallabh Textiles Company Limited under Section 60(5) of the IBC, 2016, seeking the admission of a financial debt claim.
- Applicant’s Arguments: The applicant claimed Rs.10,77,47,444/- as financial debt, supported by audited accounts and a confirmation letter. The claim was initially rejected by the RP due to an old authorization letter and insufficient documentation.
- Respondent’s Arguments: The RP argued that the transactions were not properly verified and required bifurcation into supply of goods/services and loans. The RP also cited discrepancies in the account balances and non-compliance with Sections 295 and 297 of the Companies Act, 1956.
- Tribunal’s Findings: The Tribunal found that the RP failed to properly verify the claim and classify the debts. The rejection of the claim was deemed unjustified as the RP did not provide adequate reasons or evidence for the rejection.
- Order: The Tribunal directed the RP to reconsider the claim, verify the evidence, and reconstitute the CoC with Vardhman Industries Limited as a member.

2. Payment of Salaries and Dues to Certain Employees During the CIRP Period (IA No.548/2020):
- Application Background: Vikram Jain and others filed an application against the RP of Vallabh Textiles Company Limited under Section 60(5) of the IBC, 2016, seeking the release of unpaid salaries and dues.
- Applicant’s Arguments: The applicants claimed unpaid salaries and other dues, alleging bias and non-compliance by the RP. They argued that the CoC had approved their salaries, and the RP had misled the CoC regarding the payment of dues.
- Respondent’s Arguments: The RP argued that the applicants had ceased to be employees and were not entitled to salaries post-termination. The RP also cited non-compliance with Section 197 of the Companies Act, 2013, and lack of funds for gratuity and other dues.
- Tribunal’s Findings: The Tribunal noted that genuine disputes regarding documents and employment terms could not be resolved in this forum. The RP was directed to reconsider the claims based on the terms of employment and present findings to the CoC.
- Order: The Tribunal directed the RP to reconsider the claims for salaries and dues as per the employment terms and put the findings before the CoC.

3. Usage of Mobile Numbers by the Suspended Managing Director (IA No.550/2020):
- Application Background: The suspended Managing Director filed an application against the RP of Vallabh Textiles Company Limited under Section 60(5) of the IBC, 2016, seeking non-interference in the usage of certain mobile numbers.
- Applicant’s Arguments: The applicant argued that the mobile numbers had been used for decades and were linked to personal accounts. The RP’s objection to the usage of these numbers was raised only after 1.5 years of the CIRP process.
- Respondent’s Arguments: The RP claimed that the transfer of mobile numbers was done without proper authorization and under pressure from the applicant.
- Tribunal’s Findings: The Tribunal found no justification for the RP’s interference in the usage of the mobile numbers.
- Order: The Tribunal directed the RP not to interfere in the usage of the mobile numbers and allowed the applicant to continue using them in a private capacity.

4. Payment of Outstanding Amounts for Goods Supplied During the CIRP Period (IA No.194/2022):
- Application Background: K K Spinners Pvt. Ltd. filed an application against the RP of Vallabh Textiles Company Limited under Section 60(5) of the IBC, 2016, seeking payment for goods supplied during the CIRP period.
- Applicant’s Arguments: The applicant claimed an outstanding amount of Rs.51,35,294/- for goods supplied, arguing that these should be considered as CIRP costs.
- Respondent’s Arguments: The RP argued that the quality of the goods supplied was disputed, and the Tribunal did not have jurisdiction to entertain recovery suits.
- Tribunal’s Findings: The Tribunal emphasized that it is not a forum for settling commercial disputes or recovery suits. The applicant was advised to seek relief from a competent judicial authority.
- Order: The Tribunal dismissed the application, allowing the applicant to pursue the matter before a competent judicial authority.

This comprehensive analysis covers all relevant issues, preserving the legal terminology and significant phrases from the original text.