TMI Blog2022 (6) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ence to decide on the nature of a claim for the purpose of admission of the same. The documents brought on record have not shown any kind of non-compliance by the applicant to any query raised by the Resolution Professional in this regard. The very fact that prior to the CIRP both the applicant and the respondent were under the same management would have ensured a better appreciation of the facts presented by the applicant relating to its claim. In the course of the present proceedings, the Resolution Professional could not justify the rejection of the detailed claim made by the applicant and also his inability to classify the same into operational and financial debts. The Resolution Professionals' statements that after receiving details of the claim he could not change his earlier decision to reject the same on the ground that he was advised not to review his original rejection is against the tenets of equity. To sum up, this rejection of the claim of the applicant could not be justified by the Resolution Professional during the present proceedings. This Bench is of the view that the Resolution Professional has failed in his duty to analyze the evidence placed before him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions of supply of yarn. The reasons for the non-payment by the corporate debtor is attributed to the low quality of yarn supplied by the Applicant. The parties have made claims and counterclaims on the quality issue. This Bench is of the view that the prayers made by the applicant cannot be acceded to - Application dismissed. - CA No.568/2019, IA No.548/2020, 550/2020 & 194/2022 in CP (IB) No.391/Chd/Pb/2018 (admitted) - - - Dated:- 24-5-2022 - HON BLE MR. HARNAM SINGH THAKUR, MEMBER (JUDICIAL) HON BLE MR. SUBRATA KUMAR DASH, MEMBER (TECHNICAL) For the Applicants in : Mr. Manmeet Singh, Advocate CA No.568/2019 Mr. Amandeep Singh Talwar, Advocate Ms. Nishtha Chaturvedi, Advocate For the Applicant in : Mrs. Munisha Gandhi, Senior Advocate IA No.IA No.548/2020 Mr. Vaibhav Sharma, Advocate For the Applicant in : Mr. Vaibhav Sharma, Advocate IA No.550/2020 For the Applicant in : Mr. Chetan Mittal, Senior Advocate IA No.194/2022 Mr. Alok Kumar Jain, Advocate Mr. Nahush Jain, Advocate For the Respondent/ Resolution Professional in : Dr. Rajansh Thukral, Advocate CA No.568/2019, Dr. Surekha Thukral, Advocate IA No.548/2020, IA No.550/2020 IA No.194/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Vardhman Industries on account of its own ongoing CIR Process; and (c) the account statement provided was allegedly not enough to authenticate the amount claimed. Subsequently, the applicant submitted a new Form C dated 20.05.2019 along with supporting documents duly signed by Mr. Anil Surya, as sought by the RP. This Form C was submitted well within the 90 days period under Regulation 12(2) of the IBBI (Insolvency Resolution Process for Corporate Person) Regulations, 2016 ( CIRP Regulations''). Subsequently, on 04.06.2019, the RP emailed Mr. Anil Surya stating that information was sought via email on 01.05.2019 and as the same was not provided, the RP was rejecting the claim a day later on 02.05.2019. The Resolution Professional also referred to Regulation 12(2) of the CIRP Regulations and admitted that the claim of the applicant was filed within the prescribed time period and subsequently rejected and that no belated claim may be filed. Subsequently, the applicant sent another e-mail on 05.06.2019 duly providing a detailed explanation as to how the claim was arbitrarily rejected. The applicant had submitted that its claims are borne out and evident by the audited acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how the consideration of time value of money is satisfied with respect to alleged financial transactions of loan. The respondent has claimed that the transactions are not properly verified and has also pointed out that even at the face value there are glaring discrepancies between the closing balance as on 31.03.2009 and the opening balance as on 01.04.2009 amounting to almost Rs.6 Crores. It is also stated that the applicant is required to demonstrate how the provisions of Section 295 of the Companies Act, 1956 or Section 185 of the Companies Act, 2013 are satisfied with respect to giving of loans to related parties. The respondent further averred that the applicant has not supplied information with respect to transactions recorded in the statement of account since 2007 and there are no supporting vouchers and documents with respect to such transactions. It is also stated that the applicant failed to satisfy the RP with respect to compliance of the provisions with respect to Section 297 and 295 of the Companies Act, 1956 and the corresponding provisions of the Companies Act, 2013. 5. In the rejoinder filed by Diary No.5880 dated 29.10.2019, the applicant has further averred th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot add grounds not taken while rejecting the claim in its email dated 02.05.2019 and 04.06.2019 for the first time in its reply to the caption proceedings. In rejecting the claim, the RP has exercised adjudicated powers that are not given to him under the Code. 9. We have heard the learned counsel for the applicant and respondent and perused the records carefully. 10. In the present case, the issue that falls for our consideration is whether the claims of the applicant have been properly verified before the rejection of the same by the Resolution Professional. To reiterate, the applicant has submitted the relevant copies of the audited accounts of Vardhman Industries Limited (Applicant) in respect of Vallabh Textiles Company Limited (Respondent). We have closely perused the financial statements annexed as Annexure A-8 and A-9 with the application. From the correspondence between the parties, it is clear that no serious effort was made by the Resolution Professional to classify the debts into financial and operational debts of the applicant. There is no denying the fact that the Resolution Professional needs documents and supporting evidence to decide on the nature of a cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required and decide in the light of the discussions in the foregoing paragraphs. Based on the evidence before him, he is directed to also evaluate the claim of the applicant to be classified as a financial creditor and to reconstitute the COC with the applicant as a member. With the above said observations, CA No.568/2019 is allowed and disposed of accordingly. 2. IA No.548/2020 This is an application filed by Vikram Jain, Lata Jain, Dr. Zarqa Jain and Anil Goyal, against Mr. Sumat Kumar Gupta, Resolution Professional of Vallabh Textiles Company Limited, under Section 60(5) of the IBC, 2016. 2. In the present application, the applicants seek inter alia to issue a direction to the respondent-Resolution Professional to forthwith release the salaries of Applicant Nos.1-2 for the period from August 2019 till date in the case of Applicant No.1, and July 2019 till date in the case of Applicant No.2; and also to release the dues of the Applicant Nos.1-4 as filed in respective Form Ds; or at least makes a provision for the dues payable to the Applicant Nos.1-4, based upon the claims filed in the person with the Resolution Professional during June 2019 itself. 3. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of CoC. There was no provision for any payment of gratuity or leave with wages in the appointment order. It is pointed out that the applicant has also failed to produce any letter/document to prove the contrary. The RP has terminated the services of applicant No.1 and the same has not been challenged in any forum. It is also stated that applicant No.1 has not rendered any service to the company after termination of the services and hence, is not entitled to any remuneration. As regards, applicant No.2, it is stated that admittedly she has received salary upto 30th June 2019, though she ceased to be an employee of the company w.e.f. 31.03.2019. Her services were secured by the RP, who obtained the permission of the CoC in this regard, and the respondent states that the RP is the final authority to decide whether to retain or not to retain applicant No.2. A case of non-attendance of office and unacceptable behaviour on the part of applicant No.2 has also been made out by the respondent. It is also pointed out that this termination by the RP was not set aside by CoC and the RP has already clarified to the CoC that salaries will be released to her only if any specific directions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pite the mandate of the CoC issued in the second meeting, even though he was bound by the mandate issued by the CoC on this issue in its second meeting. It is also stated that the stand of the RP that the dues on account of salary are hit by Section 197 of the Companies Act, 2013 has not been taken earlier and that the status of the Applicant No.1 and 2 was that of an employee of the corporate debtor and not that of managerial personnel. It is also stated that Section 197 of the Companies Act, 2013 does not bar payment of salary to managerial personnel even in a loss-making company subject to the condition that the permission of the financial institutions where the default has occurred and the permission of the shareholders have to be obtained. Various alleged factual discrepancies regarding the claim of salary during particular months were highlighted by the applicants. It is also stated that a judgment of the Hon ble NCLAT in Company Appeal (AT) (Insolvency) No.1229 of 2019, cited by the respondent to argue that no gratuity is payable unless there is a specific gratuity fund has been completely misread as the said case relates to a situation where liquidation of the corporate deb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Authority were fictitious. Therefore, such a document could not have been relied upon to come to a conclusion that there is no debt payable. However, such dispute could not have been decided by the Adjudicating Authority nor can be decided by this Appellate Tribunal as to whether the documents were fictitious or are of the earlier period which could be decided only by the forum of competent jurisdiction 10. It is further observed that in CIRP proceedings, under the provisions of Regulation 27(2) of the Insolvency Resolution Process for Corporate Persons Regulation 2016, the Resolution Professional may appoint any professional, in addition to registered valuers under sub-regulation (1) to assist him in discharge of his duties in conduct of the corporate insolvency resolution process, if he is of the opinion that the services of such professional are required and such services are not available with the corporate debtor. Once the terms and conditions of the employment are decided by the Resolution Professional, the amounts due to the Professional are then calculated in terms of those terms and conditions. This can also be monitored by the CoC. 11. Keeping in mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicant and his family has been using the aforesaid phone numbers for decades and the same are also linked with bank accounts, Income Tax Department, online account, and such other places. The RP has never objected to the usage of such phone numbers for almost 1.5 years of the CIRP process but after the approval of the resolution plan, the RP has started alleging the wrong usage of phone numbers. 4. It is further submitted by the applicant that the RP was the consultant to the group companies of the applicant and the RP has ceased to be associated with the corporate debtor since December 2018 and the CIRP was initiated on 12.04.2019. The Resolution Professional is not acting in a good faith due to the past business relationship between the applicant and the RP. The RP is misusing his position which caused a huge loss to the company and other stakeholders. The e-mails circulated by the Punjab National Bank expressing strong opposition to the language used by the RP in the CoC meeting is also attached as Annexure A-2 of the application. 5. The Respondent has filed its reply by Diary No.01500/01 dated 28.10.2021, in which all the allegations levelled by the applicant are denied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against payment of money and the supply of towel by the corporate debtor. It is also stated that the RP/Corporate Debtor had acknowledged having received all the goods and materials. It is further stated that outstanding amounts of Rs.13,63,188.20 and Rs.37,72,106.42 pertain to the supply of cotton yarn against payment of money and for getting job work done for making of towels respectively. It is further stated that these payments have been withheld by the respondent citing some vague and false reasons. The RP has cited quality issues but according to the applicant, the particular lot of yarn having quality issues has not been identified and the yarn supplied by the applicant was utilized by the respondent-RP in finished goods (towels) supplied to other customers. The applicant has also claimed interest of Rs.18% on the alleged outstanding amount of Rs.51,35,294. In this application, the applicant prayed for payment of the outstanding dues of Rs.51,35,294/- along with interest of 18% per annum. 4. In its reply filed vide Diary No.00420/01 dated 08.04.2022, the respondent has stated that the issues involved are primarily under dispute with respect to the quality of material whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 234 of 2021 wherein it is held that ..this Tribunal is not expected to function as original and Appellate Jurisdiction to decided and adjudicate upon the disputes pertaining to the contractual obligations''. It is also underlined that there are only six invoices which are under dispute in the present application. The respondent has also attached copies of various e-mails dated 14.04.2021, 15.04.2021, 16.04.2021, and on many other dates clearly pointing at, among other things, disputes on quality issues. A detailed table has also been submitted on page No.4 of the said submissions showing the net amount recovered from the applicant at Rs. 37,45,224/-. 7. We have heard the learned counsel for the applicant as well as the respondent and perused the records carefully. 8. A perusal of the facts of the present application indicates that there is a continuing dispute regarding a few transactions of supply of cotton yarn made by the applicant to the corporate debtor after the initiation of the CIRP. It is also observed that most payments regarding yarn supplies made by the applicant have been made except in the cases of the disputed transactions of supply of yarn. The reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
