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TMI Blog2024 (1) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... al Creditor has been dismissed, aggrieved against which order, this Appeal has been filed. 2. Brief facts of the case necessary to be noticed for deciding this Appeal are:- 2.1. The Corporate Debtor demerged under a Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013 between the Appellant and the Corporate Debtor approved by the NCLT, Kolkata vide order dated 08.11.2019. An Application under Section 9 was filed in the year 2021 against the Corporate Debtor which was admitted by order dated 05.05.2022 and one Mr. Seikh Abdul Salam was appointed as Interim Resolution Professional (IRP). In pursuance of the public announcement dated 07.05.2022, Appellant filed its claim in prescribed Form C as Financial Creditor for an amount of Rs.5,18,28,91,356/-. Earlier Resolution Professional (RP) collated the claim for an amount of Rs.516,81,01,037/-. Appellant was initially admitted to the Committee of Creditors (CoC) of the Corporate Debtor but subsequently was removed by the RP as related party. Appellant had filed an IA No.638 of 2022 challenging his removal before the Adjudicating Authority. The Adjudicating Authority vide order dated 31.10.2022 replaced the RP- Mr. Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay deem fit and proper. And for this Act of kindness, your applicants as in duty bound shall ever pray." 2.2. IA filed by the Appellant was replied by the Resolution Professional. Adjudicating Authority heard the Appellant as well as the Resolution Professional and by the impugned order rejected the IA upholding the decision of the Resolution Professional rejecting the claim of the Appellant as Financial Creditor. Aggrieved by the impugned order dated 18.10.2023, this Appeal has been filed. 3. We have heard Shri Mainak Bose, Learned Counsel for the Appellant, Shri S.N. Mookherjee, Learned Senior Counsel with Shri Abhijeet Sinha, Learned Counsel for the Respondent No.1- Resolution Professional. 4. Shri Mainak Bose, Learned Counsel for the Appellant submits that the Regulations 8, 10 and 13 of the CIRP Regulations, 2016 permits and IRP or RP to call for and/or seek from a creditor for substantiation of the claim prior to its admission. Once a claim is admitted by an IRP or RP, provisions of the said Regulations 8, 10 and 13 are no more available to the RP and his powers thereafter is limited only to revising the admitted claim. None of the Regulations authorises the RP to re-v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter-company loan given from time to time along with the accrued interest thereon' whereas no loan was given at any point of time to the Corporate Debtor nor there was any disbursement of any loan to the Corporate Debtor. There being no transaction which gave rise to the financial debt, the claim of the Appellant as a Financial Creditor was unfounded and in spite of the Resolution Professional asking by repeated e-mails to the Appellant to submit the documents to prove the financial debt, neither any document was submitted nor any reply was given, leaving no option to the Resolution Professional except to reject the claim of the financial debt. During the arguments, Counsel for the Appellant contended that the claim is based on a Scheme of Demerger whereas claim form did not mention the Scheme of Demerger as basis of the claim. Scheme of demerger does not mention any loan of Appellant to the Corporate Debtor. The actual transactions of borrowings of the Corporate Debtor relating to the demerger period are for Rs.133 Crores and Rs.55 Crores whereas the alleged claim of Appellant is for Rs.518 Crores which makes the claim and the submissions contrary. Even assuming that any amount c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 8 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016) 16th May, 2022 From Kesoram Industries Limited Birla Building, 9/1 R.N Mukherjee Road. Kolkata-700 001. To Mr. Seikh Abdul Salam [Interim Resolution Professional] 64J, Linton Street. Beniapukur. Kolkata- 700 014. Subject: Submission of claim and proof of claim. Sir, Kesoram Industries Limited, hereby submits this claim in respect of the corporate insolvency resolution process of Birla Tyres Limited. The details for the same are set out below: Relevant Particulars (1) (2) (3) 1. Name of the financial creditor Kesoram Industries Limited 2. Identification number of the financial creditor CIN: L17119WB1919PLC003 429 3. Address and email address of the financial creditor for correspondence Address: Birla Building, 9/1 R.N. Mukherjee Road, Kolkata- 700 001 Email: [email protected] 4. Details of claim, if it is made against corporate debtor as principal borrower: (i) Amount of claim (ii) Amount of claim covered by security interest, if any (Please provide details of security interest, the va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof, Kesoram Industries Limited has relied on the documents specified below: Balance confirmation from Birla Tyres Limited as on 30th April, 2022. Statement of Balance Outstanding 3. The said documents are true, valid and genuine to the best of my knowledge. information and belief and no material facts have been concealed therefrom. 4. In respect of the said sum or any part thereof, neither I, nor any person, by my order, to my knowledge or belief, for my use, had or received any manner of satisfaction or security whatsoever. 5. I undertake to update the clam as and when the claim is satisfied, partly or fully, from any source in any manner, after the insolvency commencement date. 6. Kesoram Industries Limited is not a related party of the corporate debtor, as defined under section 5 (24) of the Code. Date: 16th May, 2022. Place: Kolkata For Kesoram Industries Ltd. Company Secretary (Signature of the claimant) VERIFICATION 1, Gautam Ganguli, on behalf of Kesoram Industries Limited, the claimant, hereinabove, do hereby verify that the contents of this proof of claim are true and correct to my knowledge and belief and no material fact has been con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; [Explanation. -For the purposes of this sub-clause, - (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, "allottee" and "real estate project" shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016);] (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; (i) the amount of any liability in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of Section 5(8) of the Code. "This debt may be of any nature but a part of it is always required to be carrying, or corresponding to, or at least having some traces of disbursal against consideration for the time value of money." ( Emphasis Added )" 11. It was held that the requirement of disbursal against the consideration for time value of money remains an essential part. Thus, disbursement against the consideration for time value of money has to be proved for a financial debt. 12. Learned Counsel for the Respondent has referred to the e-mail dated 28.12.2022 sent by the Appellant to the Resolution Professional. In response to the e-mail dated 27.12.2022 by which the Resolution Professional asked the Appellant to give the relevant documents to prove its financial debt. It is useful to notice the e-mail dated 28.12.2022 sent by the Resolution Professional to the Appellant, which is as follows:- "On Wed. Dec 28, 2022 at 5:34 AM Pratim Bayal wrote: Dear Sir, This email communication is in response to your email dated 27 December 2022. You are already aware the Hon'ble NCLT replaced the erstwhile IRP, Mr. Seikh Abdul Salam with the undersigned as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k into an admitted claim. RP can merely revise the amount of admitted claim pursuant to powers derived from Regulation 14(2) on the basis of additional information warranting such revision and not otherwise The authority of RP towards the duty cast on him under Section 20(1) of the IBC on protecting and preserving the value of the property of the corporate debtor and managing the operations of the corporate debtor as a going concern are spelt out in Section 20(2) of IBC and the same too do not empower the RP to recheck and/or reverify and/or relook into an admitted claim Our admitted claim is reflected in the books of accounts of the corporate debtor as also confirmed by the corporate debtor. Plus the fact that you admit the corporate debtor was a business division of our company in itself is testimony to the fact that there could not have been a loan agreement or disbursement to the corporate debtor, and that your instant requisition is made mechanically and without application of mind and does not appear to be bona fide. It is also to be noted that the Hon'ble Supreme Court has observed in several cases that the RP has no adjudicating powers and accordingly you cannot s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the last audited balance sheet of the Corporate Debtor for the financial year 2021-22 is attached hereto marked "P-6", and the debt of the Applicant is recorded in the said balance sheet at internal page no 95 thereof." 16. Financial Statement on which much reliance has been placed by the Appellant has also been filed along with the Appeal. We need to notice certain parts of the financial statement for the year ended 31.03.2022. Counsel for the Appellant has relied on Note 13 and Note 14 which need to be noted for considering the submission. Note 13 deals with 'borrowings'. Under the heading 'borrowings', there is clause (a) 'secured' and clause (b) 'unsecured'. Clause (b) contains a heading 'Inter Corporate Deposit' is of Rs.4,164.57 Lakhs as on 31.03.2022. This 'Inter Corporate Deposit' as reflected in the balance sheet does not sync with the claim which was submitted by the Appellant in Form C. Much reliance has been placed on Note 14 which deals with 'other financial liabilities'. Learned Counsel for the Appellant submits that under Note 14 on "Other Financial Liabilities" under the heading 'current', 'payable to demerged company' amount of Rs.52,119.06 Lakhs has been menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of - (a) any application or proceeding by or against the corporate debtor or corporate person; (b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and (c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code." 19. The Adjudicating Authority in exercise of its jurisdiction under subsection (5) of Section 60 having adjudicated the claim as submitted by the Appellant, the question to be answered in this Appeal is as to whether the order of the Adjudicating Authority adjudicating the claim of the Appellant is sustainable or not. Adjudicating Authority after noticing the judgment of the Hon'ble Supreme Court in Anuj Jain vs. Axis Bank Limited- (2020) 8 SCC 401" has held that the applicant has failed to prove the transaction as a deposit of money or a loan from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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