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TMI Blog2024 (5) TMI 1348X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Liquidation Regulations. The purpose of the public announcement is to call upon the creditors and other such persons to submit their claims in relation to the corporate debtor. After the receipt of the claims, the liquidator shall verify those claims submitted by the creditors and may also ask the creditors to submit any evidence in relation to their claims for the purpose of verification. In the liquidation process, the liquidator has the power to reject claims raised and if a claim is rejected, a creditor can appeal against this decision to the Adjudicating Authority. After all the required claims have been admitted by the liquidator, he is required to determine the value of the claims for the purpose of distribution of the assets of the Corporate Debtor. This clearly entails the responsibility of more than merely collating claims but verification of claims and determination of their value. No material has been placed on record by the Appellant which shows that the Corporate Debtor had on any earlier occasion denied making payments against the invoices raised by the Respondent. This gives sufficient room to believe that the Corporate Debtor was satisfied with the level of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run Mitra , Member ( Technical ) ] The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 ( IBC in short) by the Appellant arises out of the Order dated 01.11.2023 (hereinafter referred to as Impugned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench-I) in in I.A.3392 of 2019 in CP (IB) 2295/MB-I/2018. By the impugned order, the Adjudicating Authority directed the Appellant - Liquidator in the liquidation process of the Corporate Debtor to accept the claim of the Respondent- M/s Tata Consulting Engineers Limited relating to refund of an amount of Rs.56,80,000/- with interest paid by them to prevent invocation of their Bank Guarantee and an amount of Rs. 16,73,798/- for invoice dated 22.11.2017 raised by them. Aggrieved by this impugned order, the present appeal has been preferred by the Appellant. 2. The salient facts of the case which are relevant to be noticed for consideration of the matter are as outlined below: On 13.01.2010, the Maharashtra State Power Generation Company Ltd ( MSPG in short) issued a work contract in favour of Sunil Hitech Engineers Ltd ( SHEL in short) following which SHEL appointed Tata Consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod, invoked the BG of the Respondent. The Respondent made payment without making any protest or raising any objections to the invocation of the BG. Later when the liquidation proceedings of the Corporate Debtor commenced and the Respondent sought refund of the BG amount of Rs.56.80 lakhs by filing a claim, it was contended by the Learned Counsel of the Appellant that the Liquidator rightly rejected the claims made in this respect since this amount had been paid against the BG without raising any objections. Having made the payment without protest, the Respondent had therefore waived their right to seek refund from the Corporate Debtor and therefore could not have filed their claim for the same amount before the Liquidator. It was vehemently contended that it does not stand to reason how the Adjudicating Authority could have directed the Appellant/Liquidator to allow this claim. 4. It is further contended that the Adjudicating Authority had exceeded its jurisdiction under Section 42 of IBC while passing the impugned order without appreciating the fact that BGs constitute a separate, distinct and independent contract and hence the Adjudicating Authority did not have the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deficiency in the quality of the work output. It was also stoutly contended that the Corporate Debtor had not cleared payment for the last invoice on 22.11.2017 which payment they were entitled to receive. Under such circumstances, it was wrong on the part of the Liquidator to reject the claim filed by them in respect of invoice no. 1719100023. The allegation of delayed and underperformance being levelled now by the Liquidator to justify their rejection of the claim of TCEL is contrived and an after-thought. Hence, the Respondent was constrained to file the IA before the Adjudicating Authority challenging the rejection of their claim by the Liquidator. 8. We have duly considered the arguments advanced by the Learned Counsel for both the parties and perused the records carefully. 9. The main limbs of the Appellant s case are, firstly, that the Respondent had failed to comply with the terms of the contract. The delayed submission of drawings and designs documents by TCEL had affected the overall performance of the Corporate Debtor in the main contract with MSPG leading to invocation of their BG of Rs.83.30 crores by MSPG. Hence the Corporate Debtor had rightly invoked the BG of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of the commencement of the liquidation process. (2) A financial creditor may submit a claim to the liquidator by providing a record of such claim with an information utility: Provided that where the information relating to the claim is not recorded in the information utility, the financial creditor may submit the claim in the same manner provided for the submission of claims for the operational creditor under sub-section (3). (3) An operational creditor may submit a claim to the liquidator in such form and in such manner and along with such supporting documents required to prove the claim as may be specified by the Board. (4) A creditor who is partly a financial creditor and partly an operational creditor shall submit claims to the liquidator to the extent of his financial debt in the manner as provided in sub-section (2) and to the extent of his operational debt under sub-section (3). (5) A creditor may withdraw or vary his claim under this section within fourteen days of its submission. 39. Verification of claims.- (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to their claims for the purpose of verification. A liquidator is empowered to either admit or reject the claims on the basis of verification. If the liquidator rejects or admits a claim of a creditor, he has to communicate the same to the creditor within seven days from such decision. In the liquidation process, the liquidator has the power to reject claims raised and if a claim is rejected, a creditor can appeal against this decision to the Adjudicating Authority. After all the required claims have been admitted by the liquidator, he is required to determine the value of the claims for the purpose of distribution of the assets of the Corporate Debtor. This clearly entails the responsibility of more than merely collating claims but verification of claims and determination of their value. 13. Having noticed the scheme of IBC, with respect to role of the Liquidator, we may now see how the Liquidator in the present factual matrix has handled the claims lodged by the Respondent on 24.07.2019. The Liquidator informed the Respondent by email on 03.10.2019 partly rejecting their claims as follows: Bank Guarantee Claim of INR 56,80,000 We have perused the claim and communication with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our analysis, we find that no material has been placed on record by the Appellant which shows that the Corporate Debtor had on any earlier occasion denied making payments against the invoices raised by the Respondent. This gives sufficient room to believe that the Corporate Debtor was satisfied with the level of services performed by TCEL. We also find that the Respondent had been sending repeated emails on a regular basis to the Corporate Debtor seeking payment against various invoices including Invoice No. 171910023. These emails dated 06.10.2017, 13.10.2017, 02.11.2017, 21.11.2017, 13.12.2017, 16.01.2018, 16.02.2018, 11.04.2018, and 08.01.2019 are available at pages 154 to 157 of Appeal Paper Book ( APB in short). There is nothing to show that the Corporate Debtor had disputed their liability to pay the last invoice No. 171910023 of 22.11.2017 raised by the Respondent. No communication appears to have been sent by the Corporate Debtor to TCEL regarding balance or pending work. There is also substance in the contention of the Respondent that the emails dated 14.11.2013, 02.06.2014 and 10.11.2014 referred to by the Appellant were at best in the nature of reminder emails from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RP had not specified the default or non-compliance on the part of TCEL. The communication contained a very general statement that TCEL had defaulted under the contract and failed to comply with the terms and conditions of the contract. There seems to be no supporting documents to substantiate that the invocation of BG by MSPG was attributable to deficiency in work on the part of the Respondent or failure to achieve the deliverables on their part. Given this backdrop, we are of the considered view that the Liquidator has tried to justify the wrongful invocation of BG by raising the feeble defence that the BG equivalent had been paid without any demur or protest which seems to be more of an after-thought to cover the action of the RP. 19. In such circumstances, we have no hesitation in holding that the Respondent cannot be faulted in following the due process in filing its claim with the Liquidator. Furthermore, in the liquidation process, if a claim is rejected by the Liquidator, a creditor can appeal against this decision before the Adjudicating Authority. The Adjudicating Authority enjoys complete jurisdiction under Section 42 of the IBC to deal with the decision of the Liquidato ..... X X X X Extracts X X X X X X X X Extracts X X X X
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