2019 (2) TMI 1823 - Tri - Insolvency and Bankruptcy

Prayer for amendment of the prayer clause of its main interlocutory application - HELD THAT - The relief being sought for in the present I. A. is procedural in nature and by seeking incorporation of additional pleadings as proposed in paragraph 2 of the application the nature of the proceedings is not changed nor does there arise a separate of cause of action. In the present application the applicant is seeking incorporation of prayer clauses (D) and (E) in I. A. No. 468 of 2018. Application allowed.

Issues:
1. Amendment of prayer clause in the main interlocutory application
2. Joining the resolution professional as a party respondent
3. Incorporating additional prayers in the main application
4. Challenge to the decision of the insolvency resolution professional
5. Incorporation of interest on the total claim
6. Consideration of the merits of the present application

Amendment of Prayer Clause in the Main Interlocutory Application:
The applicant, a State Tax Officer, sought an amendment to the prayer clause of the main interlocutory application, I. A. No. 468 of 2018. The purpose was to join the resolution professional as a party respondent, as there was an omission to include them initially. The applicant also requested the addition of two more prayers in the main application, relating to the decision of the resolution professional and the inclusion of interest on the total claim.

Joining the Resolution Professional as a Party Respondent:
The applicant highlighted that due to a genuine error, the resolution professional was not included as a party respondent in the cause title of the main application, I. A. No. 468 of 2018. Therefore, the applicant sought leave to join the resolution professional, emphasizing the importance of their involvement in the proceedings.

Incorporating Additional Prayers in the Main Application:
The applicant requested the inclusion of two additional prayers in the prayer clause of the main application. These prayers aimed to challenge the decision of the resolution professional under specific sections of the Insolvency Code and to add interest on the total claim amount. The applicant argued that these additions were crucial for addressing the outstanding dues accurately.

Challenge to the Decision of the Insolvency Resolution Professional:
The State Tax Department challenged the decision of the insolvency resolution professional, who reduced the claim amount of the applicant authority. The State Tax Department contended that the reduction was arbitrary and lacked jurisdiction. The department emphasized that the outstanding dues amounted to a significant sum, necessitating the incorporation of interest on the total claim.

Incorporation of Interest on the Total Claim:
The applicant sought to add interest at the rate of 18% per annum on the total claim amount, which was crystallized dues of Rs. 544 crores. The remaining dues, totaling Rs. 995.53 crores, were still sub judice. The applicant argued that the interest addition was essential to accurately reflect the total outstanding dues.

Consideration of the Merits of the Present Application:
After considering the merits of the application, the Tribunal concluded that the relief sought was procedural in nature. The incorporation of additional pleadings in the main application did not change the nature of the proceedings or create a new cause of action. The Tribunal clarified that allowing the application for amendment would not lead to a fresh hearing of the main application but would permit the filing of written submissions, considering the time-bound nature of the case. Consequently, the application for amendment was conditionally allowed, and the proposed changes were deemed to have been made in the main application, to be dealt with alongside the main application.

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