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TMI Blog2022 (3) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a case of providing term loan or other temporary non -fund based facilities to be guided by rates provided in the sanction letter and for Letter of Credit facilities no such rate of interest was provided specifically to be charged at a higher rate of interest of 20% p.a plus penal interest or so. The Appellant being an Assignor is only producing the Ledger Account of the Karur Vysya Bank who is the Assignor of the Agreement and the same is not supported by the requisite authority letters - as per details provided at page 230 of the Appeal paper book the base rate was 9% p.a and that over base rate a spread of 4% p.a. was provided with maximum lending rate of 20% p.a. The Appellant cannot be agreed upon ,that Liquidator has no power to reduce the claim of the Appellant and his duty is only to verify the claim. It is made clear vide Section 39 of the Code that the Liquidator is suppose to verify the claim and Section 35 of the Code empowers it to verify the claims. The available banking practices as also such exorbitant maximum high rate of interest alleged by the Appellant is not justifying the allowing of appeal. Hence, we uphold the order of the Adjudicating Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Process of the CD etc. 3. The Ld. Counsel for the Appellant has submitted that the CD has availed the financial facilities from the said bank which has been assigned to the Appellant by an Assignment Agreement dated 28.03.2016 and the same is at Annexure A-5 appearing at page 65 of the Appeal Paper Book. The Corporate Insolvency Resolution Process (CIRP) was initiated on 18.12.2019 by the Adjudicating Authority vide its order in CP(IB) No. 305 of 2018. The IRP appointed by the Adjudicating Authority, was changed in the 1st meeting of the Committee of Creditors (COC) of the CD on 03rd February, 2020 and Mr. Pradeep Kumar Kabra was appointed as Resolution Professional (RP) during CIRP, the Appellant filed its claim of ₹ 51,50,74,531/- and the RP admitted an amount of ₹ 31,56,84,503/-. The Appellant being aggrieved approached the Adjudicating Authority for reduction in the claim. However, in the 6th meeting of the CoC of the CD held on 10th September, 2020, the CoC resolved by 100% vote to liquidate the CD as no resolution plan was received by the RP in the CIRP of CD. The liquidation process of the CD was allowed by the Adjudicating Authority vide its orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to page 18 of the paper book and contended that for ILC/FLC sub limit under the term loan the rate of interest was to be applied as per circulars. Thereafter, he drew our attention to page 156 of the paper book wherein the methodology for working out the interest rate had been mentioned and it was claimed that the maximum lending rate would be 20% p.a. Our attention was also drawn to page 136 containing copy of the statement of accounts of the CD from 01.01.2014 to 03.12.2020 wherein interest was charged at the rate of 20%. The Learned counsel pleaded that such statement was available to the CD and no disagreement of whatsoever nature had been shown by the CD at any stage. Hence, now the Liquidator is bound to accept this rate of interest and workout the claim made by the Applicant. It was also claimed that Liquidator was only to verify claims and was not competent to substitute his own view/ calculation on the ground that the claim is too high despite the proof for the basis of charging interest on such rate given to the Liquidator. 9.The short dispute involved in this application is regarding rate of interest which is to be applied to compute the amount of claim. It is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Process) 2016 for verification of the claim. The Liquidator based on above Regulations have alleged that the Appellant failed to provide the reasons for charging high rate of interest as also the citations of the circulars to supplement their case. The Liquidator has also submitted that the sanction letters are silent on the point of rate of interest/commission except that bank will keep cash margin of 10% and rate of interest/commission percentage will as per circulars etc. The circular cited by the Appellant dated 17th August, 2013, 21st January, 2015 03rd October, 2015 provide for a maximum lending rate and do not state that they are applicable to the LC facilities and the circulars also requires an acknowledgment of the borrower and there is no document or material to show that this requirement was complied with. The Appellant has failed to produce any document which shows that the CD had agreed the rate of interest i.e. 20%. The Ld counsel for the Liquidator has orally submitted that it has considered around 13 % p.a interest rate while admitting claim when queried by the bench if the Appellant is to be paid at that higher rate of interest as alleged by them in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to verify the claim and Section 35 of the Code empowers it to verify the claims. For brevity and clarity Section 35 39 of the I B Code, 2016 are reproduced below for ease of reference: Section 35: Powers and duties of liquidator: (1) Subject to the directions of the Adjudicating Authority, the liquidator shall have the following powers and duties, namely:- (a) to verify claims of all the creditors; (b) to take into his custody or control all the assets, property, effects and actionable claims of the corporate debtor; (c) to evaluate the assets and property of the corporate debtor in the manner as may be specified by the Board and prepare a report; (d) to take such measures to protect and preserve the assets and properties of the corporate debtor as he considers necessary; (e) to carry on the business of the corporate debtor for its beneficial liquidation as he considers necessary; (f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shall have the power to consult any of the stakeholders entitled to a distribution of proceeds under section 53: Provided that any such consultation shall not be binding on the liquidator: Provided further that the records of any such consultation shall be made available to all other stakeholders not so consulted, in a manner specified by the Board. Section 39: Verification of claims. 39. (1) The liquidator shall verify the claims submitted under section 38 within such time as specified by the Board. (2) The liquidator may require any creditor or the corporate debtor or any other person to produce any other document or evidence which he thinks necessary for the purpose of verifying the whole or any part of the claim. d. For ease of convenience, Regulations 16, 18, 23 30 of the IBBI (Liquidation Process) 2016 are reproduced below: Regulation 16 : Submission of claim. (1) A person, who claims to be a stakeholder, shall submit its claim, or update its claim submitted during the corporate insolvency resolution process, including interest, if any, on or before the last date mentioned in the public announcement. (2) A person shall prove its claim for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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