Srei Infrastructure Finance Ltd vs Kannan Tiruvengadam

Present: For Appellant : Mr. V. Prakash, Senior Advocate assisted by Mr. Ajay Garg, Ms. Shubharanjani Ananth and Mr. Kartikeya Goel, Advocates

For Respondents: Mr. M. M. Abbasi, Advocate for R.P.

Mr. Rajiv S. Roy, Mr. Avorjyoti Chatterjee, Mr. Abhijit Roy and Ms. Jayasree Saha, Advocates for Respondent No. 2

Mr. Syed Medi Imam, Advocate for Respondent No.3

Company Appeal (AT) (Insolvency) No. 591 of 2018

IN THE MATTER OF:

SREI Infrastructure Finance Ltd. ...Appellant

Versus

Kannan Tiruvengandam (R.P.) & Anr. ...Respondents

Present:

For Appellant : Mr. Abhijeet Sinha, Mr. Arijit Mazumdar, Mr. Akanksha Kaushik, Mr. Akshay Chanda, Mr. Aditya Shukla and Mr. Saikat Sarkar, Advocates

For Respondent: Mr. Ajay Gaggar and Mr. Rubin Sirohi, Advocates 2

ORDER

01.02.2019 In both the appeals as common question of law is involved,

they are disposed of by this common order.

2. The appellant 'M/s. Prasad Gempex' filed a claim as 'Financial Creditor'.

The 'Resolution Professional' rejected the claim. 'M/s. Prasad Gempex' thereafter

claimed to be an 'Operational Creditor' on suggestion of the 'Resolution

Professional' but the same has also been rejected.

3. According to the appellant 'M/s. Prasad Gempex' had filed 'Expression of

Interest' before the 'Resolution Professional' but it was not taken care by the

'Committee of Creditors'. In this background, the appellant filed an application

before the Adjudicating Authority (National Company Law Tribunal), Single

Bench, Chennai and by impugned order dated 22nd May, 2018, the Adjudicating

Authority rejected the application.

4. According to the respondents the 'Resolution Professional' had rejected

'Expression of Interest' and it was not placed before the 'Committee of Creditors'.

It is not in dispute that the so called 'resolution plan' met the criteria.

5. In this appeal the appellant has assailed all the rejection of its claim as

'financial creditor', rejection of its claim as 'operational creditors' and rejection

of its claim as 'Resolution Applicant'.

6. The connected appeal has been preferred by 'SREI Infrastructure Finance

Limited' (Financial Creditor) against the order dated 23rd July, 2018. By the said

order, the application preferred by the appellant 'SREI Infrastructure Finance

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018 3

Limited' to set aside the decision of the 'Resolution Professional' dated 15th April,

2018 for refusing, re-calculating or reducing the claim in respect of the 'corporate

debtor' has not been entertained. Thus, the rejection/reduction of the claim by

'Resolution Professional' by order dated 15th April, 2018 reached a finality. The

question arises for consideration in both the appeals is whether the 'Resolution

Professional' has jurisdiction to decide or reject the claim of one or other

'Financial Creditor' or 'Operational Creditor'.

7. Similar issue fell for consideration before this Appellate Tribunal in 'M/s.

Dynepro Private Limited' vs. Mr. V. Nagarajan - Company Appeal (AT) (Insolvency)

No. 229 of 2018 etc.' The Appellate Tribunal by its judgment dated 30th January,

2019 held that 'Resolution Professional has no jurisdiction to decide the claim

of one or other creditor, including 'Financial Creditor', 'Operational Creditor',

'Secured Creditor' or 'unsecured Creditor'. Referring to sub-section (6) of Section

60 of the 'I&B Code', this Appellate Tribunal further observed that after

completion of the period of moratorium, a suit or application can be filed against

the 'Corporate Debtor'. Relevant portion of Section 60 is quoted below:-

"60. (1) The Adjudicating Authority, in relation to insolvency

resolution and liquidation for corporate persons including

corporate debtors and personal guarantors thereof shall be

the National Company Law Tribunal having territorial

jurisdiction over the place where the registered office of the

corporate person is located.

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018 4

xxx xxx xxx

(5) Notwithstanding anything to the contrary contained in

any other law for the time being in force, the National

Company Law Tribunal shall have jurisdiction to entertain

or dispose of--

(a) any application or proceeding by or against the

corporate debtor or corporate person;

(b) any claim made by or against the corporate

debtor or corporate person, including claims by or

against any of its subsidiaries situated in India; and

(c) any question of priorities or any question of law or

facts, arising out of or in relation to the insolvency

resolution or liquidation proceedings of the corporate

debtor or corporate person under this Code.

(6) Notwithstanding anything contained in the Limitation

Act, 1963 or in any other law for the time being in force, in

computing the period of limitation specified for any suit or

application by or against a corporate debtor for which an

order of moratorium has been made under this Part, the

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018 5

period during which such moratorium is in place shall be

excluded.

From the aforesaid provision, it is clear notwithstanding the order

passed under Section 31 of the I&B Code (any existing law), it is open to a

person to file a suit or an application against the 'corporate debtor' after

completion of the period of moratorium.

8. The power of 'Resolution Professional' also fell for consideration before the

Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. vs. Union of India

& Ors. - Writ Petition (Civil) No. 99 of 2018'. In the said judgment dated 25th

January, 2019, the Hon'ble Supreme Court held that 'Resolution Professional'

has no adjudicatory power. The 'Resolution Professional' has to vet and verify

the claims made and ultimately determine the amount of each claim. As opposed

to this, the 'Liquidator' in the Liquidation proceedings under the I&B Code has

to consolidate and verify the claims and either admit or reject such claims under

Sections 38 to 40 of the Code.

9. In the present case, it is informed that the 'resolution plan' has already

been approved by the 'Committee of Creditors' and the 'Resolution Professional'

had placed the same before the Adjudicating Authority on 4th October, 2018 in

'M/s. Prasad Gempex' with regard to the 'corporate insolvency resolution

process' initiated against 'M/s. Star Agro Marine Exports Pvt. Ltd.' (subject

matter of Company Appeal (AT) (Insolvency) No. 291/18) . A 'resolution plan' has

already been approved and placed before the Adjudicating Authority (Chennai)

on 4th October, 2018. However, till date no order under Section 31 has been

passed. We find that 270 days have passed.

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018 6

10. Insofar as 'corporate insolvency resolution process' initiated against

'Assam Company India Ltd.' is concerned it is informed that a separate

'resolution plan' has already been approved by the 'Committee of Creditors' and

same has been approved by the Adjudicating Authority under Section 31 of the

I&B Code on 20th September, 2018.

11. In the facts and circumstances, we direct the Adjudicating Authority

(National Company Law Tribunal), Chennai to pass appropriate order under

Section 31 of the I&B Code on the 'resolution plan' as approved by the

'Committee of creditors', if not yet passed, by 22nd February, 2019.

12. We allow the appellant - 'M/s. Prasad Gempex' to file claim in terms of

sub-section (6) of Section 60 before the appropriate court of law or may file

appropriate application against the 'corporate debtor' namely 'M/s. Star Agro

Marine Exports Pvt. Ltd.', if the 'resolution plan' is approved and do not take

proper care of the applicant. In case the 'resolution plan' is not approved and

order of 'liquidation' is passed in respect of 'M/s. Star Agro Marine Exports Pvt.

Ltd.', in such case, it will be open to the appellant 'M/s. Prasad Gempex' to file

claim before the 'Liquidator' in accordance with the provisions as referred to

above and the 'Liquidator' will decide the claim under Section 40 of the I&B Code.

13. We may observe that we have not expressed any opinion with regard to the

claim as made by 'M/s. Prasad Gempex'. So far as the 'SREI Infrastructure

Finance Ltd.' who is aggrieved by the decision of the 'Resolution Professional', it

may also take steps under sub-section (6) of Section 60 against the 'corporate

debtor' or any other party. In this case, we make it clear that we have not

expressed any opinion with regard to the claim made by the 'SREI Infrastructure

Finance Ltd.' or the decision as taken by the 'Resolution Professional'.

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018 7

Both the appeals stand disposed of with aforesaid observation and

directions given to the Adjudicating Authority, Chennai in one of the case. No

cost.

[Justice S.J. Mukhopadhaya] Chairperson

[ Justice Bansi Lal Bhat ] Member (Judicial)

/ns/sk/

Company Appeal (AT) (Insolvency) Nos. 291 & 591 of 2018