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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2023 (6) TMI AT This

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2023 (6) TMI 547 - AT - Insolvency and Bankruptcy


Issues Involved:

1. Whether the Resolution Professional (RP) was justified in keeping the Appellant's financial claim in abeyance due to pending arbitration proceedings and counterclaims of the Corporate Debtor.
2. Whether the Appellant's financial claim should be admitted and the Appellant included in the Committee of Creditors (CoC).

Summary:

Issue 1: Justification for Keeping Claim in Abeyance

The Adjudicating Authority (National Company Law Tribunal, Amaravati Bench) observed that the Insolvency and Bankruptcy Code (IBC) mandates the Resolution Professional (RP) to collect and collate claims. However, when a dispute regarding the amount due and interest is pending, the RP cannot admit the claim to avoid conflicting judgments. The RP complied with the mandate of collecting and collating the claim but kept it in abeyance due to the pending arbitration proceedings and counterclaims of the Corporate Debtor. The Authority cited judgments, including EXIM Bank Vs. Resolution Professional JEKPL Private Limited and Reliance Commercial Finance Limited Vs. Ved Cellulose Limited, to support that claims can be kept in abeyance under certain circumstances.

Issue 2: Admission of Appellant's Financial Claim

The Appellant, a Financial Creditor, argued that its claim is an admitted and acknowledged liability, and the RP's failure to admit the claim due to pending arbitration and counterclaims is unlawful. The Appellant cited various judgments, including Innoventive Industries Limited v. ICICI Bank & Anr. and Pioneer Urban Land and Infrastructure Limited v. Union of India, to support that a claim can be made whether or not it is reduced to judgment and that the existence of a dispute does not impede the admission of a claim.

Assessment:

The Tribunal noted that the RP kept the claim in abeyance due to pending arbitration proceedings and counterclaims, which could result in a set-off of amounts payable to the Appellant. The RP's action was within his power and limit to keep claims in abeyance under such circumstances. The Tribunal concluded that the RP's action was justified and the reliefs prayed for by the Appellant could not be granted. The impugned order dated 02.12.2022, dismissing the Appellant's application, was upheld.

Result:

The appeal was dismissed, and the IA No. 26 of 2023 (For Stay) was closed.

 

 

 

 

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