NCLAT (30.07.2021) in Mukul Kumar RP of KST Infrastructure Ltd. Vs. M/s RPS Infrastructure Ltd. [Company Appeal (AT) (Insolvency) No. 1050 of 2020] held that;
With the aforesaid, we are of view that whenever any claim is filed after extended period provided in Regulation 12(2) of the Regulations, the RP should have rejected the claim. The Legislation has not provided any discretion to RP for admitting the claim after the extended period.
Facts of the Case;
1. Resolution plan submitted by the RWA was approved by the CoC by a majority vote of 80.74% on 11.07.2020.
2. On 19.08.2020 the Respondent through email sent a claim of Rs. 35,67,05,337 to the RP.
3. The Application for approval of Resolution Plan was filed on 08.09.2020 before the Adjudicating Authority.
4. The Respondent filed an application before the AA for directing the RP to consider the claim submitted by the Respondent.
5. Ld. Adjudicating Authority by the impugned order allowed the Application and directed the RP to consider the claim of the Respondent on merits.
6. Appellant Mukul Kumar RP of KST Infrastructure Ltd. has filed this Appeal under Section 61 of the IBC assailing that order.
Excerpts of the Order;
13. From a bare reading of the impugned order it is apparent that Ld. Adjudicating Authority has allowed the Respondent’s Application on following grounds.
(i). For inviting claims, service through paper publication is not proper service.
(ii). The RP has not made necessary efforts to get the records from ex-management.
(iii). The RP has not gathered information about the creditors of Corporate Debtor.
(iv). The RP has hurriedly wrapped up the company with a Resolution Plan.
(v). The RP should not have summarily rejected the claim of the Respondent on the ground that claim has not been filed within time and the Resolution Plan has already been approved by the CoC.
14. We have examined the findings of Ld. Adjudicating Authority in the light of aforesaid grounds one by one.
Ground (i)
15. Ld. Adjudicating Authority in the impugned order held that “Many a times there could be a possibility to the creditors not knowing about initiation of CIRP. It comes out through paper publication. In normal practice, service through paper publication comes into picture when personal service is not effected. That occasion was not available. So, in a situation like this, there is every possibility of missing out the information but that cannot take away the primary right of realization against the debtor.”
19. Ld. Adjudicating Authority in the impugned order also held that “The claimant as soon as came to know of initiation of CIRP against the Corporate Debtor, in the month of August, 2020, has filed its claim before the RP.” The Respondent has submitted its claim on 19.08.2020 through email to the RP. In the email, it is not stated that the Respondent came to know of initiation of the CIRP against the Corporate Debtor only in the month of August, 2020. Even in the Application, it is not disclosed that from which source in the month of August, 2020 the Respondent came to know about initiation of CIRP against the Corporate Debtor. On the other hand, Appellant in its Rejoinder specifically mentioned that the Respondent on 26.07.2019 (i.e. after the confirmation of arbitral award by the Additional District Judge, Gurgaon vide its order dated 25.04.2019) issued a special power of attorney in favour of Corporate Debtor. (Copy of the same is R1 annexed with Rejoinder). This fact is not disputed by the Respondent. Therefore, such a story that the Respondent was unaware of the public notice cannot be accepted.
Ground (ii)
20. Ld. Adjudicating Authority held that “The RP has given a bland answer saying that records of the company are not available, if that is the situation, the RP’s duty was to obtain records of the ex-management and then to verify the claim and financial position and then take up Resolution Plan”
21. The pleadings of the Respondent that the RP has deliberately not collected information though he could have gathered it. It is not the case of the Respondent that RP has deliberately acted so the rightful creditors may not able to file their claims and thereby they may not become the member of CoC. It is pointed out that the RP has indeed made sincere efforts to procure the records of the Corporate Debtor. The IRP has also filed an Application under Section 19 of the IBC seeking proper direction of the Ld. Adjudicating Authority to the ex-management to provide all the records. This fact is not denied by the Respondent in his reply to the Appeal. Thus, we are unable to hold that the RP has failed to do his bounden duty as assigned in the IBC and Regulations.
Ground (iii)
22. Ld. Adjudicating Authority held that “It is the bounden duty of the RP to ascertain much more information as he could gather so that creditors entitled to their share are not left out.”
23. Ld. Adjudicating Authority is not pointing out that what type of efforts RP should make to ascertain the Creditors. Aforesaid finding is a general remark, therefore we cannot hold that the RP has failed to perform his duty assigned in the IBC and Regulations.
Ground (iv)
24. Ld. Adjudicating Authority held that “All this will be taken care of when RP, from day one put efforts to get the records from the ex-management. This is more important than hurriedly wrapping up the company with a Resolution Plan, then only wholesome justification could be done to the purpose for which this Code has come into existence.”
26. With the aforesaid date and events, it is apparent that the CIRP was conducted by the IRP/RP as per the provisions of IBC and Regulations and there is nothing on record to presume that the IRP/RP have hurriedly wrapped up the company with the Resolution Plan.
Ground (v)
27. Ld. Adjudicating Authority held that “The RP should not have summarily rejected the claim of the Applicant solely on the ground that claim has not been filed within time and the Resolution Plan has already been approved by the CoC.”
29. With the aforesaid it is apparent that the IRP/RP can accept the claim as per extended period as provided in Regulation 12(2). It means after extended period of 90 days of the insolvency commencement date the IRP/ RP is not obliged to accept the claim.
30. It is argued on behalf of the Respondent that the Regulations are directory but not mandatory and for this purpose, placed reliance on the Judgment of Hon’ble Supreme Court in the case of Brilliant Alloys Pvt. Ltd. (Supra). In this Judgment Hon’ble Supreme Court has dealt with the provision of Section 12(A) with the Regulation 30 and held that the stipulation in the Regulations can only be construed as directory depending on the facts of each case. There is no ratio of the Judgment that the Regulations are directory and not mandatory.
31. With the aforesaid, we are of view that whenever any claim is filed after extended period provided in Regulation 12(2) of the Regulations, the RP should have rejected the claim. The Legislation has not provided any discretion to RP for admitting the claim after the extended period.
34. With the aforesaid, we are of the view that when the Resolution Plan has already been approved by the CoC and it is pending before the Adjudicating Authority for approval, at this stage, if new claims are entertained the CIRP would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in time bound manner to maximize the value, if such request of claimant is accepted the purpose of IBC would be defeated. Hon’ble Supreme Court in the case of CoC of Essar Steel India Ltd. (Supra) held as under:-
88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6)of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with “undecided” claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count.
35. With the aforesaid we are of view that the Ld. Adjudicating Authority has erroneously directed the RP to consider the claim of the Respondent which is apparently filed after a delay of 287 days, before that the CoC has already approved the Resolution Plan. Thus, the impugned order is not sustainable in law, therefore, it is hereby set aside and the Appeal is allowed, however, no order as to costs.
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IRP/ RP is empowered to take control and custody of assets of the CD as recorded in BS/ Depositories/ any registering authority. Here it is the case where the attachment order has been issued prior to CIRP and the asset now attached with EPFO under consideration of statutory dues so IRP/ RP can not demand the custody of such assets attached.
ReplyDeleteIf we look your comments it is also trues that IT and GST departments following the attachment procedure as you mentioned.
But my question is- it is me detour for EPFO to lodge claim and attchement order with central registry to prove its security interest? If not filed than such security interest could be void and considered unsecured? But as per EPMA dues of PF having first charge over the asset of undertaking under section 11 of EPMA. So statutorily it is recognised first charge over the asset, then it is compulsory to lodge registration with central Registry ??