Dhinal Shah, Liquidator for Innoventive Industries Limited Applicant - Adjudicating Authority permitted the change/replacement of liquidator on the grounds that the present liquidator wishes to change his profession,

NCLT Mumbai-1 (21.12.2021) in Dhinal Shah, Liquidator for Innoventive Industries Limited Applicant [IA No. 2268 of 2021 in C.P. (IB) No. 01/MB/2016] permitted the change/replacement of liquidator on the grounds that the present liquidator wishes to change his  profession, in absence of any such provision in the Code.

Excerpts of the Order;

# 1. This Application has been filed on behalf of the Applicant seeking permission of this Tribunal for release from the position of Liquidator of the Corporate Debtor and consequent discharge from his duties. 

# 2. The brief facts leading to the Application are as follows: 

• a. The Corporate Debtor was put into liquidation vide order of this Adjudicating Authority dated 08.12.2017 and the Applicant herein was appointed as the Liquidator. 

• b. After his appointment as liquidator the significant time out of the period of two years was available to him to complete the liquidation process. But the same was consumed in the legal proceedings initiated by the erstwhile Promoter before the Hon'ble Supreme Court and the Hon'ble National Company Law Appellate Tribunal (NCLAT). 

• c. Further, this Tribunal vide order dated 04.07.2019 excluded the period of 207 days from the liquidation period and directed to complete the process by 02.07.2020. 

• d. Subsequently, this Tribunal vide order dated 08.02.2021 extended the time period of liquidation by 6 months to complete the liquidation process which got delayed due to various factors beyond the control of the Applicant, including without limitation, various pending litigations, delay in completion of sale registration formalities and Covid – 19 outbreaks. Accordingly, after this extension, the period of liquidation stands extended to 07.08.2021. 

• e. Further, due to the pendency of various litigations the liquidation process was not concluded within the extended time (i.e. 07.08.2021). In view of the same this Adjudicating Authority vide order dated 20.09.2021 has extended the time period to complete the liquidation process by another 6 months. 

# 3. It is submitted that during the course of the liquidation process, the Applicant has carried out various duties and functions under the provisions of the Code and the Insolvency and Bankruptcy Board of India (Liquidation Process), Regulations, 2016, including the e-auction and sale of assets forming part of the liquidation estate of the Corporate Debtor and distribution of liquidation proceeds amongst the stakeholders. 

# 4. This Applicant always keep informing this Hon'ble Adjudicating Authority about the liquidation Process of the Corporate Debtor by way of various reports filed from time to time in terms of the Liquidation Process Regulations. 

# 5. It is submitted that the Applicant herein has conducted the three rounds of distribution of liquidation proceeds to the stakeholders of the Corporate Debtor on 01.08.2019, 12.08.2020 and 31.03.2021 for Rs. 92,82,99,191/-, Rs. 02,58,80,949/- and Rs. 03,49,52,369/- under Section 53 of the Code. It is also submitted that various material litigations in relation to the liquidation process of the Corporate Debtor are pending adjudication. 

# 6. It is submitted that due to various pending litigations, the Applicant could not conduct the liquidation process of the Corporate Debtor. As there is no visibility on how much more time will be required for hearing and adjudication of these material litigations and the timeline for completion of the liquidation process which is pending since 2017. It is submitted that the Applicant has been performing his duties as liquidator diligently and has made all possible efforts for successful and early completion of the liquidation process. 

# 7. Further the Applicant on 01.07.2021 intimated the Institute of Chartered Accountants of India (ICAI) regarding surrender of his Certificate of Practice and the same has been noted by ICAI by their e-mail dated 01.07.2021. The copy of the said e-mail by the Applicant to ICAI and the response of ICAI is  annexed as Annexure "C". 

# 8. The Applicant has also informed the Bar Council of Gujarat about his present role as a liquidator of the Corporate Debtor and assured that his role as the Liquidator will be minimum as the substantial assets of the Corporate Debtor has been sold and realised. 

# 9. As far as the liquidation process of the Corporate Debtor is concerned most of the assets has been sold and the monies have been distributed to the stakeholders. However, there is no visibility on completion of the liquidation process on account of pending litigations. 

# 10. The Applicant desires to start his practice as soon as possible and therefore, would like to surrender his registration as an IP and practice only as an Advocate. In view of the same the Applicant will not be able to continue as the Liquidator of the Corporate Debtor. 

# 11. On 17.09.2021 a meeting of the lenders of Corporate Debtor was called upon  to discuss the status of the liquidation proceedings, where the Applicant has informed the lenders about his inability to continue as liquidator of the Corporate Debtor. Applicant herein has also informed the lenders about Mr. Trupal J. Patel for the role of the Liquidator of the Corporate Debtor. The lenders took note of the same. 

# 12. Hence this Application. 

# 13. We have heard the Ld. Counsel for the Applicant and have perused the  records. In the facts and circumstances of the above case the Application deserved to be allowed. Hence ordered. 

ORDER 

The Application be and the same is allowed. 

• 1. Mr. Trupal J. Patel is appointed as Liquidator of the Corporate Debtor in  place of Mr. Dhinal Shah, if there is no proceeding pending against him. 

• 2. The lenders shall release the fees and costs incurred by the erstwhile liquidator, Mr. Dhinal Shah, on his furnishing proof in support thereof. 

• 3. Mr. DhinalShah shall hand over charge to Mr. Trupal J. Patel forthwith. The  liquidator shall make all endeavour to complete the Liquidation process expeditiously within the stipulated period. 

• 4. There would however be no order as to costs. 

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Blogger’s Comments; Replacement of liquidator at this stage (when nearly all the assets of CD has been disposed of and litigation concerning liquidation process is pending) in absence of any pressing health issues, is against the principles of equity.

Outgoing liquidator has been allowed to reap the benefits of the process (liquidator's fee) and when it comes to the unremunerative legwork of dealing with the pending litigation, the same is entrusted to another person. 

As per regulations, the fee of the liquidator is in  proportion to the disposal of assets and distribution to creditors..

Most probably the pending litigation must be the outcome of the actions of the outgoing liquidator in the liquidation process.

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Cotton Casuals (India) Private Limited Vs. Kanchan Dutta, Liquidator of Enfield Apparels Ltd. & Anr. - The scheme in the IBC, thus also reinforce the principle that sale by a Liquidator under the IBC is a sale on behalf of the Corporate Debtor. Such sale cannot be termed to be involuntary sale.

NCLAT (17.12.2021) in Cotton Casuals (India) Private Limited Vs. Kanchan Dutta, Liquidator of Enfield Apparels Ltd. & Anr. [Company Appeal (AT) (Insolvency) No. 206 of 2021 ] held that;

• The judgment of the Hon’ble Supreme Court in M/s Parasram Harnand Rao (supra) does not support the submission of the learned Counsel for the Appellant. Sale on behalf of Corporate Debtor by Liquidator was held sale by the Company and was held to be voluntary sale.

• The scheme in the IBC, thus also reinforce the principle that sale by a Liquidator under the IBC is a sale on behalf of the Corporate Debtor. Such sale cannot be termed to be involuntary sale. The Appellant submission that transfer fee cannot be levied when sale is made by a Liquidator under the IBC, cannot be accepted.

• We are inclined to accept the submission of the learned Counsel for the Respondent No.2 that the last expression in Clause 7.1.12 “all other duties payable in connection with purchase of Sale Assets” has to be read in business efficacious manner. 

• We thus are of the view that transfer fee in respect of transfer made by Liquidator of the lessee assets is liable to be paid and transferee cannot absolve himself from payment of liability to pay transfer fee.

Excerpts of the Order;

The Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘IBC’) has been filed against judgment order dated 2nd February, 2021 passed in IA(IB) 1079/KB/2020 in Company Petition (IB) No.338/KB/2018. Brief facts necessary to be noted for deciding this Appeal are :

• (i) Liquidation proceedings against Corporate Debtor, Enfield Apparels Limited was initiated under the IBC.

• (ii) Invitation for Expression of Interest for acquisition of Corporate Debtor was published by the Corporate Debtor on 24th May, 2019.

• (iii) E-Auction was held on 11th June, 2019 in which the appellant could not participate.

• (iv) A letter dated 26th June, 2019 was written by the Appellant to the Liquidator, requesting for purchase of one of the four modules at prevailing bid value.

• (v) An application was filed by the Appellant before the Adjudicating Authority for cancelling the E-Auction held on 11th June, 2019

• (vi) Appellate made an offer to pay Rs.15.50 crores as compared to the auction price of Rs.14.37 crores.

• (vii) The Adjudicating Authority passed an order dated 24th February, 2020 directing the Appellant to deposit 25% of the proposed bid amount.

• (viii) By subsequent order dated 12th March, 2020 of the Adjudicating Authority, Appellant’s bid for Rs.15.50 crores was accepted and Adjudicating Authority directed the Appellant to deposit the entire amount.

• (ix) Liquidator also filed an Application before the Adjudicating Authority praying that transfer fee demanded is not applicable in the transfer by the Liquidator.

• (x) An Application was filed by the Appellant again seeking time for depositing the remaining amount. The Application filed by the Appellant was allowed, giving time and the Adjudicating Authority further directed that Appellant/ purchaser shall bear and pay the applicable stamp duties, registration fees and all fees and expenses payable for registration of documents, Taxes, GST, etc. and all other duties payable inclusive of transfer fee in connection with purchase of Sale Assets.

• (xi) An Application was filed by the Appellant to modify the order dated 12th March, 2020 and 22nd June, 2020, which too was rejected by the Adjudicating Authority by order dated 29th July, 2020.

• (xii) Respondent No.2 i.e. West Bengal Industrial Development Corporation Limited wrote a letter dated 3rd September, 2020, asking for a deposit of Rs.2,96,69,215/- as transfer fee.

• (xiii) The Appellant again filed an Application before the Adjudicating Authority, questioning the liability of transfer fee, challenging the letter dated 3rd September, 2020 of West Bengal Industrial Development Corporation Limited.

• (xiv) The said Application was heard by the Adjudicating Authority and by the impugned order dated 02.02.2021 the application of the Appellant was rejected. The Adjudicating Authority directed the Appellant/ Applicant to pay the transfer fee to the West Bengal Industrial Development Corporation Limited.

• (xv) This Appeal has been filed by the Appellant challenging the order dated 02.02.2021.

 

# 7. The main issue to be considered and answered in this Appeal is, as to whether the Appellant was liable to pay transfer fee as demanded by the West Bengal Industrial Development Corporation Limited.

 

# 8. The first ground of attack on the payability of transfer fee as mounted by Shri Debal Kr. Banerji, learned Senior Counsel for the Appellant is that the transfer by Liquidator is involuntary transfer and there is no payability of transfer fee and transfer fee could have been asked for as per sub-lease Deed dated 6th August, 2010 in event a voluntary transfer was made by the Company. Learned Senior Counsel for the Appellant in support of his submission has placed reliance on judgment of Calcutta High Court in 1958 SCC OnLine Cal 213 – Krishna Das Nandy v. Bidhan Chandra Roy; the judgment of the Hon’ble Supreme Court in (1980) 3 SCC 565, M/s Parasram Harnand Rao vs. M/s Shanti Parsad Narinder Kumar Jain and Anr.; and B. Arvind Kumar vs. Government of India, (2007) 5 SCC 745.

 

# 9. In Krishna Das Nandy case (supra), the question was as to whether the defendant’s purchase came within Clause (a) and (b) of proviso to Section 13 of West Bengal Rent Control Act, 1950. The question which arose in the above case was as to whether the tenant i.e. the Company has transferred the Company within the meaning of proviso (a). In the above case in liquidation proceeding the defendant has purchased the tenancy through public auction. The Calcutta High Court in the above case held that in winding up, the Company is put into liquidation and sale is made by the Liquidator acting under the control of the Court and sale, therefore, is really by the Court acting through Liquidator. In paragraph 38 and 39 following was laid down:

• “38. In a compulsory winding up, the company is put into liquidation against its will by force of law and the order of the court and the sale is made by the liquidator, acting under the control of the court and with its sanction. That is the dictate of law. The sale, therefore is really by the court, acting through the liquidator  End the company has no hand in the matter. It is thus a sale against the company’s will or a sale in invitum. This is particularly so under the Indian law where the Companies Act differs in an important particular in this respect from its English counterpart, vide section 179(C) of the Indian Act, under which the liquidator can sell only with the sanction of the court, thus contemplating prior sanction, while, in the English Act [Companies (Consolidation) Act, 1908 which was considered in (1921) 2 Ch. 164 (12). (supra)] the corresponding section 151(2), even when read with section 151(3), does not seem to require at least prior sanction of court in case of the liquidator’s sale. The court directs the winding up and, as soon as the order is made, the assets of the company are placed by law in the custody and control of the court (vide section 178) which eventually orders and sanctions the sale, acting under the imperative provisions of the statute [vide section 179(c)]. In essence, therefore, it is a transfer by the court or by operation of law and, looking to the substance of the matter, we do not find any difference in the character of this sale (which, as we have said above, is really a sale in invitum) from a sale in execution or any other compulsory sale, to which, it is not disputed, the provisos will not apply.

 

# 10. The next case referred to by Shri Banerji is (1980) 3 SCC 565, M/s Parasram Harnand Rao vs. M/s Shanti Parsad Narinder Kumar Jain and Anr., in which the Hon’ble Supreme Court has referred to Calcutta High Court judgment in Krishna Das Nandy (supra). The Supreme Court held that on account of transfer made by the Official Liquidator the purchaser stepped into the shoes of the Corporate Debtor i.e. the original tenant and the sale on behalf of the Liquidator was held to be voluntary sale. In paragraph 6 of the judgment following was laid down:

• “6.  . . . .. As regards Point 3, the High Court relying on a decision of Calcutta High Court in Krishna Das Nandy v. Bidhan Chandra Roy [AIR 1959 Cal 181 : 63 CWN 29] has found that as the transfer in favour of Respondent 1 by the Official Liquidator was confirmed by the court, the status of the tenant by Respondent 1 was acquired by operation of law and therefore the transfer was an involuntary transfer and the provisions of Rent Control Act would not be attracted. After a careful perusal of the Calcutta case [AIR 1959 Cal 181 : 63 CWN 29] , in the first place it appears that the section concerned has not been extracted and we are not in a position to know what was the actual language of the section of the Bengal Act. Secondly, in our opinion, the Official Liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the Official Liquidator had transferred the tenancy interest to Respondent 1 under the orders of the court, it was on behalf of the original tenant. It was undoubtedly a voluntary sale which clearly fell within the mischief of Section 14(1)(b) of the Delhi Rent Control Act. Assuming that the sale by the Official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by Section 14(1)(b) of Delhi Rent Control Act. Section 14(1)(b) runs thus:

• “That the tenant has, on or after the 9th day of June, 1952, sublet, assigned or otherwise parted with the possession of the whole or any part of the premises without obtaining the consent in writing of the landlord.”

 

# 11. The judgment of the Hon’ble Supreme Court in M/s Parasram Harnand Rao (supra) does not support the submission of the learned Counsel for the Appellant. Sale on behalf of Corporate Debtor by Liquidator was held sale by the Company and was held to be voluntary sale.

 

14. Section 35 of the IBC, which deals with powers and duties of liquidator, sub-section (f) and (g) clearly indicate that the actions taken by Liquidator are on behalf of the Corporate Debtor. Section 35 sub-section (f) and (g) are as follows:

• “35 (f) subject to section 52, to sell the immovable and movable property and actionable claims of the corporate debtor in liquidation by public auction or private contract, with power to transfer such property to any person or body corporate, or to sell the same in parcels in such manner as may be specified: 

• Provided that the liquidator shall not sell the immovable and movable property or actionable claims of the corporate debtor in liquidation to any person who is not eligible to be a resolution applicant.

• (g) to draw, accept, make and endorse any negotiable instruments including bill of exchange, hundi or promissory note in the name and on behalf of the corporate debtor, with the same effect with respect to the liability as if such instruments were drawn, accepted, made or endorsed by or on behalf of the corporate debtor in the ordinary course of its business;”

 

# 15. The scheme in the IBC, thus also reinforce the principle that sale by a Liquidator under the IBC is a sale on behalf of the Corporate Debtor. Such sale cannot be termed to be involuntary sale. The Appellant submission that transfer fee cannot be levied when sale is made by a Liquidator under the IBC, cannot be accepted.

 

# 16. Now we come to the second submission of the learned Senior Counsel for the Appellant is that Invitation for Expression of Interest, Clause 7.1.12 does not contain payment of transfer fee. Clause 7.1.12 of the Invitation for Expression of Interest is as follows:

• “7.1.12 The purchaser shall bear and pay the applicable stamp duties, registration fees and all fees and expenses payable for registration of documents, Taxes, GST, etc. and all other duties payable in connection with purchase of Sale Assets.”

 

# 17. The Invitation for Expression of Interest and the clauses contained therein cannot be interpreted like a statute. The intendment of Invitation for Expression of Interest has to be looked into. We are inclined to accept the submission of the learned Counsel for the Respondent No.2 that the last expression in Clause 7.1.12 “all other duties payable in connection with purchase of Sale Assets” has to be read in business efficacious manner. Furthermore, when we look into the terms and conditions of sub-lease Deed dated 6th August, 2010 executed in favour of Corporate Debtor by West Bengal Industrial Development Corporation Limited contain clause 12.28, which referred to 10% of prevailing market value of the property as transfer fee. Relevant part of the clause 12.28 is as follows:

• “No Assignment/ Transfer of Sub-Lease hold right: The Sub-Lease shall not assign/ transfer the Demised Premises or any part thereof without obtaining any prior approval and/ or consent in writing from the Sub-Lessor. Such permission shall be granted by Sub-Lessor will be given after payment by the Sub-Lessee to the Sub-Lessor 10% of the prevailing market value of the scheduled property as shall be assessed by the Registering Authority of the Government of West Bengal as transfer fees…..”

 

# 18. We thus are of the view that transfer fee in respect of transfer made by Liquidator of the lessee assets is liable to be paid and transferee cannot absolve himself from payment of liability to pay transfer fee.

 

# 19. Now we come to the orders passed by Adjudicating Authority on 23rd June, 2020 and 29th July, 2020. Before the Adjudicating Authority, an Application was filed by the Appellant seeking further time to make the balance payment. In that connection, while allowing the Application of the Appellant, certain directions were issued by the Adjudicating Authority, including a direction to pay transfer fee by the Appellant. Paragraph 13(iii) is as follows:

• “13(iii). It is made clear that the applicant/ purchaser shall bear and pay the applicable stamp duties, registration fees and all fees and expenses payable for registration of documents, Taxes, GST, etc. and all other duties payable inclusive of transfer fee in connection with purchase of Sale Assets, in addition to the balance bid amount.”

 

# 20. An Application was filed by the Appellant to modify the aforesaid order dated 23rd June, 2020 praying that direction for payment of transfer fee by the Appellant should be modified. The said Application was specifically rejected by the Adjudicating Authority vide order dated 29th July, 2020. There being specific direction by the Adjudicating Authority for payment of transfer fee by the Appellant and the Appellant having not challenged those orders, cannot be heard in contending that he is not liable to pay transfer fee.

 

# 21. Lastly, we may notice the letter dated 26th June, 2019, on the basis of which letter the Appellant was permitted to participate in the bid of the assets. The letter having filed at page 183 of the paper book, is reproduced below:

• “Date: 26th June, 2019

• To

• Mr. Kanchan Dutta

• Liquidator of Enfield Apparels Limited

• Subject: Request for purchase of the one of the said 4 Modules at Prevailing Bid Value.

• Dear Sir,

• With reference to above, we would like to bring under your kind attention to the fact that our legal representative J.K. Dwivedi has been late to contact you regarding above mentioned E-Auction sale, that is why we could not avail the opportunity to bid for one of the said 4 Modules.

• From the reliable source, we came to know that the deal might be cancelled and in such Case, we will be highly obeliged if you kindly provide me with the opportunity to bid for one of the said 4 modules along with adjacent garage at the Reserved price of the said property. We promise to follow all the conditions of your Auction and we are also ready to pay the transfer charges to WBIDC.

• You are therefore requested to please provide us with the opportunity and oblige.”

 

# 22. Auction of the Sale Assets was already completed on 11th June 2019 and thereafter the Applicant made a request and submitted the higher bid. In the letter quoted above, there was specific submission “We promise to follow all the conditions of your Auction and we are also ready to pay the transfer charges to WBIDC”. The Appellant cannot be now allowed to go back from his statement that he will pay the transfer charges also.

 

# 23. We thus do not find any merit in any of the submissions made by learned Counsel for the Appellant. There is no merit in Appeal. The Appeal is dismissed.

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Bank of India Vs. Kamalesh Kumar Singhania - Regulation 14(2) of CIRP Regulations, clearly says that the IRP shall revise the amount of claims when he comes across additional information warranting such revision.

NCLT Cuttack (22.12.2021) in Bank of India Vs. Kamalesh Kumar Singhania, Resolution Professional of Maa Durga Rice Processing & Exports Private Ltd. & Anr. [IA (IB) No.11lCBl2021 In TP No.30/CTB /2019 (CP (IB) No. 1323 /KB/2018 ] held that;

• Regulation. Regulation 12(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, permits the receipt of claims up to ninety days from the date of commencement insolvency process. Thus, there is no delay in submission of claims by the second respondent.

• After accepting the materials produced by the second respondent the first respondent revises the admitted claim amounts of second respondent to the extent of Rs.23,36,98,127.85/- such an exercise is permissible under Regulation 14(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016. Thus, there is no delay in submission of claims by the second respondent. 

• The 1st respondent cannot delegate his power of scrutiny of claims submitted by the creditors along with supporting documents to another creditor, hence refusing to permit the applicant to peruse the documents submitted by second respondent will not amount to arbitrary act of the first respondent.

• When there is legally enforceable agreement between the parties, the interim resolution professional cannot interpret the same and tinker the contents of agreement (penal interest). Hence the objection raised by the petitioner side is not conceded.

• Regulation 14(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016 clearly says that the Interim resolution profession shall revise the amount of claims when he comes across additional information warranting such revision.

• These facts were recorded in 8th,10th and 14th COC meetings. Thus, everything was done by the first respondent with the knowledge of the petitioner. It is patent that only because the voting rights of the petitioner is substantially reduced in COC he termed the act of the first respondent is suspicious and malafide, the same cannot be accepted.

• Section 21(2) of IBC 2016 speaks about the formation of COC with all Financial creditors of corporate debtors, it does not speak about secured and unsecured creditor and it does not provide any special status to nationalised Bank hence the expectation of the petitioner being Nationalised Bank needs special status or placed in higher pedestal is not acceptable.

Excerpts of the Order;

# 1. The grievance of the petitioner is the enhancement of voting right of the second respondent in COC from 17.05% to 46.60 %, impacts upon the reduction in voting right of the petitioner in COC from 82.95% to 53.40%, it all happened because of 1" respondent who reconstituted the voting right pattern in 16th COC on 27.11.2020. Hence the petitioner filed this interlocutory application praying to declare the reconstitution of COC done by 1st respondent on 27,011,2020 is void and in consequence restore the voting right pattern existed as on the date of 15th COC meeting.

# 2. From the averments of the petition, it appears that there were 16 COC meetings held ranging the period from 30.09.2019 to 27.11.2020.In all the meetings the voting rights of parties were fluctuating. In the 3rd COC meeting the voting rights  of the 2nd respondent was marginally higher than the petitioner there after upto 15th COC the voting right of the petitioner is much higher than the second respondent and almost retains more than 82% voting rights, the same was reduced in the 16th COC meeting. It all happened because of delay in submitting the required documents by the second respondent to the satisfaction of the 1st respondent.

# 3. The petitioner complaint and challenge the reconstitution of the COC by the lst respondent dated 27.11.2020 on the following grounds:

• (I) It is done belatedly,

• (ii) It is arbitrary,

• (iii) It is in violation of Regulation 12 of CIRP Regulation,

• (iv) Wrongly admitted claim of exorbitant penal interest at 36%,

• (v) Ignored that the 2nd respondent is only an unsecured creditor

• (vi) Failed to obtain the leave of an Adjudicating Authority,

• (vii) It is illegal,

• (viii) It is suspicious and malafide.

# 4. Now we see whether the petitioner has substantiated the above grounds to succeed in his attempt.

# 5. The CIRP process commences from the order dated 04.09.2019. In pursuant to the same Paper publications in both English and vernacular newspapers were affected on 07,09,2019 granting time tIll 18.09.2021 to submit claims. The petitioner and Maa Durga Thermal Power Co. had submitted their claims. The second respondent submitted his claim on 24.09.2019. The second respondent submitted the claims with 1st respondent after the expiry of last date mentioned in the public announcement but before the expiry of ninetieth day of the insolvency commencement date, the same is permissible under Regulation. Regulation 12(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations 2016, permits the receipt of claims up to ninety days from the date of commencement insolvency process. Thus, there is no delay in submission of claims by the second respondent.

# 6. The second respondent submitted claim for Rs.40,71,03,361/-. The 1st respondent initially admitted the second respondent's claim only to the extent of Rs.5,50,59,135/- on the basis of records submitted by the second respondent and records available with the corporate debtor. The applicant and second respondent submitted their revised claim with the 1" respondent, on 1st week of September by the applicant and on 23.11.2020 by the second respondent, both the revised claims were received by the 1st respondent. The 1st respondent accepted certain claims of the second respondent after the receipt of certain documents required by him to satisfy himself before admitting the claims. After accepting the materials produced by the second respondent the first respondent revises the admitted claim amounts of second respondent to the extent of Rs.23,36,98,127.85/- such an exercise is permissible under Regulation 14(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016. Thus, there is no delay in submission of claims by the second respondent. 

# 7 .The issue pertaining to admission of Rs.5,50,59,135.00/- was opposed by the second respondent and became subject matter in the 8th and 10th COC. In the 10th COC the applicant expressed his view that the said dispute is not matter for discussion in COC and the issue should be settled between the 1st and 2nd respondents. Thus the 1st respondent exercised his power in admitting the claim of the second respondent known to the applicant. The applicant stated in the petition that when he asked the first respondent to permit him to inspect the documents given by the second respondent the first respondent refused to comply with his request. In the scenario the applicant alleged that the act of first respondent is arbitrary. The 1st respondent has to maintain confidentiality, as an independent person he cannot share the materials collected from one claimant with another claimant. The 1st respondent cannot delegate his power of scrutiny of claims submitted by the creditors along with supporting documents to another creditor, hence refusing to permit the applicant to peruse the documents submitted by second respondent will not amount to arbitrary act of the first respondent.

# 8. In respect of admission of 36% penal interest is concern, the first respondent explained that he has no authority or right to reduce the interest rates or other charges that was agreed upon by the corporate debtor and claimants by agreements. He said he can only collate and verify the claims and admit the claim either in fulI or in part. When there is legally enforceable agreement between the parties, the interim resolution professional cannot interpret the same and tinker the contents of agreement. Hence the objection raised by the petitioner side is not conceded.

# 9. The applicant stated that the 1st respondent failed to get the consent of the Adjudicating authority before accepting the claim of the second respondent after the expiry of ninety days. There is no delay in submitting the claims by the second respondent, but delay occurred beyond ninety days only in admitting the claim after scrutiny of documents. It is pertinent to mention that the petitioner also submitted his revised claim after the expiry of ninety days in the 1st week of September 2019 the same was admitted by the 1st respondent at the time the petitioner not thought of permission of Adjudicating Authority now he raised such plea, however he has not quoted under what provision of law such a consent of Adjudicating Authority is required, further Regulation 14(2) of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016 clearly says that the Interim resolution profession shall revise the amount of claims when he comes across additional information warranting such revision.

# 10.  The petitioner stated that the act of the first respondent is suspicious  and with malafide but under what circumstances it is suspicious and malafide is not narrated. From the records it appears that the second respondent submitted his claim for a sum of Rs.40,71,03,361.00/- within the stipulated time. The first respondent initially admitted only to the extent of Rs.5,50,59,135.00/-and called the second respondent to produce certain evidence and clarification for substantiating the rest of the claim as provided under Regulation 10, of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016. The clarification called by the first respondent from the second respondent and documents produced by the second respondent was under the verification of the first respondent were all known to the petitioner. These facts were recorded in 8th,10th and 14th COC meetings. Thus, everything was done by the first respondent with the knowledge of the petitioner. It is patent that only because the voting rights of the petitioner is substantially reduced in COC he termed the act of the first respondent is suspicious and malafide, the same cannot be accepted.

# 11. The petitioner stated that second respondent is unsecured creditor instead the petitioner is secured creditor and nationalised bank. The second respondent denies this fact and stated that the second respondent is a secured and financial creditor. Section 21(2) of IBC 2016 speaks about the formation of COC with all Financial creditors of corporate debtors, it does not speak about secured and unsecured creditor and it does not provide any special status to nationalised Bank hence the expectation of the petitioner being Nationalised Bank needs special status or placed in higher pedestal is not acceptable.

# 12. The petitioner described the act of first respondent reconstituting the COC on 27.11.2020 is belated, arbitrary, illegal, without any proper verification, not in systematic manner, whimsical, unauthorised, violation of Code, not in good spirit, malafide, illogical, and tainted, but miserably failed to establish any one of the contentions as alleged, hence the petition is liable to be dismissed. In fine this petition is DISMISSED.

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