2024 (3) TMI 504 - AT - Insolvency and Bankruptcy

Calculation of the interest - admission of the claim by the Resolution Professional - HELD THAT - The Adjudicating Authority in the impugned order having noticed certain instances and decided that with regard to claim charging of the interest should be examined and adjudicated, there are no error in the order of the Adjudicating Authority when direction has been passed to examine the interest charge in the claims. Till the issues are finalized, the Adjudicating Authority to balance the interest of the parties has directed that no further steps shall be taken for consideration and approval of the Resolution Plan. It is further to be noticed that the next date fixed is 12.03.2024 and in the interest of all concerned, Adjudicating Authority may take a decision on the application and thereafter further steps may proceed in accordance with the law. Appeal disposed off.

Summary

Issues involved:
The issues involved in this case are the exorbitantly high interest and charges admitted by the Resolution Professional, the role of the Committee of Creditors (COC) in approving resolution plans, and the interim relief sought by the public sector bank regarding the interest rates charged.

Exorbitantly High Interest and Charges:
The Adjudicating Authority passed an order directing further consideration of the exorbitantly high interest and charges admitted by the Resolution Professional for certain respondents. The Authority emphasized the need for interim relief based on the governing principles, including prima facie case, balance of convenience, and irreparable loss. It was noted that the COC's role in the matter was not legally tenable as it falls outside the ambit of the Insolvency and Bankruptcy Code (IBC). The Authority granted interim relief restraining the COC from considering and approving resolution plans until the issue is resolved, to prevent prejudice to the bank's interests.

Role of Committee of Creditors (COC):
The Respondents contended that the Adjudicating Authority's observation regarding exorbitant interest charges was incorrect, asserting that all calculations were in accordance with relevant documents. The Resolution Professional also supported the interest calculations and claim admissions. The Adjudicating Authority's order to examine and adjudicate the interest charges in the claims was deemed appropriate, with a directive to halt further steps for resolution plan consideration and approval until the issues are resolved. The next hearing date was set for a future date, allowing the Authority to make a decision and proceed as per the law.

Interim Relief Sought by Public Sector Bank:
The public sector bank sought interim relief due to concerns about the interest rates charged and the impact on its voting rights. The Adjudicating Authority granted the requested relief, restraining the Respondents from voting on resolution plans until the present matter is resolved. The Authority clarified that it had not expressed any opinion on the underlying issue to be decided. The Appeal was disposed of accordingly by the Appellate Tribunal.