TMI Blog2021 (10) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... sed off. - IA (IBC) No. 50 of 2021 IN C.P. (IB)No. 07/GB/2021 - - - Dated:- 6-10-2021 - Hon ble Shri H. V. Subba Rao, Member (J) And Hon ble Shri Prasanta Kumar Mohanty, Member (T) MR. D. SRIVASTAVA ADVOCATE PETITIONER PRESENT IN VIDEO MR. BHATRA ADVOCATE PETITIONER CONFERENCE MR. AMIT PAREEK RP IN PERSON ORDER [ Per se: Shri Prasanta Kumar Mohanty , Member (T) ] 1. The present application is filed by the Applicant under Sec. 60(5) of the Insolvency and Bankruptcy Code 2016, with rule 11 of the National Company Law Tribunal Rules, 2016 seeking directions for the Respondent to accept the entire claim filed by the Applicant. The Applicant has preferred the present application being aggrieved by the partial rejection of its claim dated 11.05.2021 as an Operational Creditor by the Resolution Professional (hereinafter referred to as RP). 2. The Applicant submits that this Hon ble Court vide order dated 07.04.2021 in C.P.(I.B.)/7/GB/2021 initiated Corporate Insolvency Resolution Process against the Corporate Debtor and the Respondent was appointed as the Interim Resolution Professional who was afterwards confirmed as the Resolution Professional on 06.05. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Financial Creditor were thus used for the day-to-day operations of the Corporate Debtor and for creation of fixed assets for the Plant of the Corporate Debtor. A copy of the term sheet dated 2710.2010 executed between the Financial Creditor and the Corporate Debtor is annexed herewith and marked as ANNEXURE D. (Page No. 38 to 44) 6. That the Financial Creditor continued to give interest free loan to the Corporate Debtor as agreed. That from the Financial Year 2013-2014 the loan advanced to the Corporate Debtor by the Financial Creditor was considered as Unsecured Loan under the head 'Long Term Borrowing in the balance sheet of the Corporate Debtor. It is submitted that till date no repayment has been done with context of the said loan by the Financial Creditor. 7. That in addition to the said documents as above, the Financial Debt can also be substantiated by the audited financial statement for the financial year 2009-10 to 2018-2019, from the bank statement of the Financial Creditor and from the minutes of board meetings (BM's) dated 02.09.2015, 01.08.2016, 30.09.2017 and 14.04.2020 which clearly shows that the Financial Creditor had advanced loans to the Corp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ... 18. Duties of interim resolution professional. The interim resolution professional shall perform the following duties, namely: (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the Corporate Debtor, including information relating to i. business operations for the previous two years, ii. financial and operational payments for the previous two years, iii. list of assets and liabilities as on the initiation date, and iv. such other matters as may be specified, (b) receive and collate all the claims submitted by creditors to him pursuant to the public announcement made under sections 13 and 15, ... 14. Additionally, Section 25 of the Code lays down the Duties of Resolution Professional . The relevant extract of Section 25 of the Code states as follows: 25. Duties of Resolution Professional. 1. It shall be the duty of the resolution professional to preserve and protect the assets of the corporate debtor, including the continued business operations of the Corporate Debtor. 2. For the purposes of sub-section (1), the Resolution Professional sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Code as well as the Regulations that the Resolution Professional has no adjudicatory powers... ... It is clear from a reading of these Regulations that the Resolution Professional is given administrative as opposed to quasi-judicial powers... Unlike the liquidator, the Resolution Professional cannot act in a number of matters without the approval of the Committee of Creditors under Section 28 of the Code, which can, by a two-thirds majority, replace one Resolution Professional with another, in case they are unhappy with his performance. Thus, the Resolution Professional is really a facilitator of the Resolution Process, whose administrative functions are overseen by the Committee of Creditors and by the Adjudicating Authority... 18. However, to the dismay and disconcert of the Financial Creditor, the RP vide email dated 10.06.2021 intimated the Financial Creditor that its claim as a Financial Creditor has been rejected without providing any reasons. A copy of the email dated 10.06.2021 sent by the RP to the Financial Creditor is annexed herewith and marked as ANNEXURE H (Page No. 248 to 249). 19. The RP has without application of mind and without any bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 (Rupees Eighteen Lakhs Thirty-Eight Thousand Nine Hundred Forty-Three Only). b. To pass any such other order as this Hon ble Tribunal as may deem fit and proper under the facts and circumstances of the case, in the interest of justice, equity and fair trial. 26. That this Hon'ble Tribunal has jurisdiction to decide the present application under Section 60(5) of the Code. 27. That the present application is filed within limitation period. 28. That irreparable prejudice will be caused to the Applicant/Financial Creditor if the claim is not admitted. The present application warrants urgent adjudication since the CIR process is at an advance stage. 29. In view of the facts and circumstances stated herein above the Applicant most respectfully prays that this Hon ble Tribunal may be pleased to: a. Direct the Respondent/RP Mr. Amit Pareek to admit the entire claim filed by the Financial Creditor/ Applicant of ₹ 18,38,943.00 (Rupees Eighteen Lakhs Thirty-Eight Thousand Nine Hundred Forty-Three Only) b. To pass any such other order as this Hon ble Tribunal as may deem fit and proper under the facts and circumstances of the case, in the interest of justice, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 201 note no. 9 Pg. no. 206 note no. 31(b) the Audited Financial statement of the CD for the FY ended on 2016 to 2019 clearly shows that the amount due to the Applicant the proprietor of Intrade Corporation under the head of Advance for fertiliser which can not be treated as the Financial creditor. Further more the Audited Financial statement for the FY 2019-20 2020-21 also shows that the amount due to the claimant under the head of Advance for fertiliser, Hence the audited financial statement clearly indicates and proves that the amount due to the claimant is purely of business advances and or transaction to CD not the loan. Copy of relevant Pages of Audited Financial Statement attached Marked as Annexure D. vi. After receipt of the Claim Form, R.P. entirely verified the documents based on records available to him and turned up with the following observations: As per the information and documents submitted with Form-C and as per the information available with the R.P., it is observed that the claimant is neither financial creditor u/s 5(7) nor the financial debt u/s 5(8) of IBC 2016, the documents available for claim verification are subtle and furthermore in earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Niyati Chemicals vs. Minepro Minerals Pvt. Ltd., Company appeal (AT) (Insolvency) No. 861 of 2020 vide order dated 08.10.2020 held that as far as IBC concerned, providing advance against business dealings is not covered under the financial debt hence section 7 of IBC can not be invoked for such transactions. should be treated at par with the other equity shareholders. xiii. That the claimant in support to his alleged financial debt has relied and submitted a BINDING TERM SHEET FOR SHARE PURCHASE Dated 27.10.2010 being prepared on plain paper signed by the Claimant and his sibling Mr. Prokash Dutta the suspended Director on behalf of CD having no legal authenticity and a valid contract of loan and more interestingly the alleged Binding Term Sheet for Share Purchase was made between the CD Prokash Datta, the Claimant is not the party of the aforesaid binding term vide Pg. no. 38 of instant application. Further as per the books of CD there are numerous number of inflow and outflow of funds by way of debit and credit transaction and it is in the nature of running account having no commercial effect of borrowing. which is an essential element in terms of section 5(8) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or who has preferred the present application u/s 60(5) of the IBC, 2016 being aggrieved by the rejection of its entire claim dated 11.05.2021 as a Financial Creditor by the Resolution Professional. That Applicant submitted its proof of Claim on 11.05.2021 in FORM C as a Financial Creditor by email and further sent the hard copies of the same along with a supporting Affidavit under Regulation 8 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 to the RP. The total financial debt is ₹ 18,38,943.00 ii. That the Financial debt on the Corporate Debtor can be ascertained by various documents which are reproduced herein: Ann. No. Documents Page No. in the Application A Extraordinary General Meeting dated 30.09.2010 Pg. 34-37 B Term Sheet dated 27.10.2010 Pg. 38-44 C Audit Report from 2009-10 till 2018-19 Pg. 45-193 2012 13 Long Term Borro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualifies as Financial Debt. v. That it is the duty of the RP to collate all the claims submitted to it. The RP does not have the jurisdiction to adjudicate upon the claim as held by the Hon ble Supreme Court in Swiss Ribbons Pvt. Ltd. and Anr. versus Union of India - (2019) 4 SCC 17 . But, to the dismay and disconcert of the Financial Creditor, the RP vide email dated 10.06.2021 [Pg. No. 250] intimated that the entire claim has been rejected without providing any reasons. vi. That the RP has neither verified the documents submitted by the Financial Creditor nor the records of the Corporate Debtor before rejecting its claim. It is submitted that in support of the claim the entitlement of the Applicant towards the Financial Debt is admitted in books of the Corporate Debtor which the RP has conveniently ignored. vii. Therefore, it is prayed from this Hon ble Tribunal to admit the claim of the Financial Creditor and direct the RP to admit the entire claim of ₹ 18,38,943.00 of the Applicant as a Financial Debt. viii. Without Prejudice to the above, it is submitted that this Hon ble Tribunal had taken up the mater IA. No. 45/2021 Prokash Datta versus Amit Pareek ..... X X X X Extracts X X X X X X X X Extracts X X X X
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