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2021 (1) TMI 108 - Tri - Insolvency and BankruptcyAssignment of Debt - Seeking directions to Resolution Professional / 1st Respondent herein who is Resolution Professional to admit claim - Section 60 (5) of Insolvency & Bankruptcy Code - HELD THAT:- The Learned Counsel for Applicant would contend that the Applicant is assignee of the debt which was payable to the 2nd Respondent, the Assignor by the Corporate Debtor. The Learned Counsel would contend, there is an Assignment Agreement duly executed by the Assignor/the second Respondent herein namely, SREI Infrastructure Finance Limited. The Learned Counsel would contend, the debt transferred under Assignment Agreement is permitted to be recognised. In this connection the Learned Counsel for Applicant relied on Regulation 28 of CIRP Regulations. The Learned Counsel contended, the 2nd Respondent transferred / assigned the debt of ₹ 60,47,38,233/- on 18.05.2020. The Learned Counsel contended, soon after assigning the debt in favour of Applicant by the Assignor, the Applicant/Assignee filed claim before the 1st Respondent/ Resolution Professional of the Corporate Debtor. The Learned Counsel contended, the Resolution Professional being administrator and facilitator is bound to accept the claim transferred in favour of Applicant, declaring him as Financial Creditor and include in the CoC for the Corporate Debtor. The Learned Counsel contended, the Resolution Professional has not admitted the claim raising unnecessary objections and acted as adjudicator, which he is not empowered to do so. The Learned Counsel contended, the Resolution Professional rejected the claim by adjudicating the claim filed by the Applicant, as if the same cannot be admitted. It is true the debt of ₹ 60,47,38,233/- was assigned to the Applicant with the underlying securities which is for a sum of ₹ 10 lakhs. I agree with the contention of the Assignor that the inadequacy of consideration is not by itself a ground to entertain a doubt about the transaction. There are other circumstances pointed out by the Resolution Professional. The contention of the Resolution Professional that he has relied on Section 5 (7) of the Code and decided the claim on administrative side. The Resolution Professional would contend, the Applicant is a non-financial institution and non-ARC. How this Applicant being a non financial institution and non-ARC is entitled to purchase the debt with underlying immovable and movable securities from Respondent No.2 which is a Non-Banking financial institution and holding net worth of ₹ 2987.08 crores as on 31.03.2018 can assign its debts with underlying immovable and movable securities to non-financial institution and non-ARC, the Applicant herein, whose paid up capital is just ₹ 47.63 lakhs and how the debt of ₹ 60.47 crores was assigned for a sum of ₹ 10 lakhs. Certainly, this is an important circumstance which ought not to be ignored while assessing genuiness of this transaction. The question is whether claim can be admitted basing on the un-registered document when it was filed before the Resolution Professional. The unregistered documents cannot be taken into account for admission of the claim. The document must have been registered on the date on which the claim is made. No doubt for registration, four months are available under Section 23 of the Registration Act. The question is whether Assignment Agreement was registered on the date on which claim was made before the Resolution Professional. The documents must have been registered by the date the claim was made before the Resolution Professional. So when claim was made, the documents was not registered. Therefore, the document cannot be looked into. The Resolution Professional had not committed any error by not relying the unregistered Assignment Agreement because it was not registered and claim could not be admitted. The Resolution Professional has rightly observed a serious suspicious circumstance in the alleged transaction. The Applicant is a non-financial institution and non-ARC, then how the Applicant purchased the debt with underlying movable and immovable securities from the Assignor which is an NBFC and holding net-worth of ₹ 2987.08 crores as on 31.03.2018, which can assign its debts with underlying immovable and movable security to a non-financial institution and non-ARC, the Applicant herein, whose paid up capital is ₹ 47.63 lakhs. This certainly is an important circumstance which cannot be ignored and it casts a serious doubt on the transaction - The debt is stated to have been transferred to the Applicant, the Assignee. Now the prayer by the Applicant is to recognise him as financial creditor and further to include it in the CoC. The Resolution Professional has taken a right decision that Assignment Agreement is not registered. Therefore, he has not recognised the claim of the Applicant basing on the unregistered Assignment Agreement. Secondly, the Applicant cannot be included in the CoC even if transfer is treated as a valid transfer since the Assignee got the debt transferred from the related party. The Assignee is stepping into the shoes of the Assignor. Therefore, the Applicant cannot be included in the CoC having acquired the debt by transfer from the related party to the Corporate Debtor. The transaction on the face of it appear to be not a genuine transaction with regard to the transfer of debt in favour of Assignee. Already Resolution Professional recognised the debt of the Assignor and only a part of debt was not admitted because of pending reconciliation. Thus, there is no error committed by the Resolution Professional for not accepting transfer and not including the Applicant in the CoC. The Assignor continued to be a financial creditor of the Corporate Debtor. If transfer is not recognised by the Resolution Professional, the status of the Assignor/2nd Respondent herein, does not change and Assignor continues to be financial creditor of the Corporate Debtor - application dismissed.
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