A Landmark Judgment: An Analysis of the Role and Authority of Resolution Professionals in Claim Revision
The recent judgment by the NCLT New Delhi Bench Court-VI, presided over by Shri P.S.N. Prasad and Shri Rahul Prasad Bhatnagar, in the case of “Bharat Bhushan, Proprietor of Sai Traders Vs. Samtex Desinz Pvt. Ltd.” offers a significant interpretation of the Insolvency and Bankruptcy Code (IBC), 2016 and its implications on insolvency proceedings. This case critically examines the extent of a Resolution Professionals (RP) powers in revising claims based on documentary evidence.
Key Role of Resolution Professionals in Court’s Key Judgments
- Verification and Revision of Claims: The RP initially admitted a claim of Rs. 5,585,769, rejecting the rest due to interest and other issues. Subsequently, on discovering disputes between the applicant and the corporate debtor, the RP reduced the claim to Rs. 34,049.19.
- Role and Limitations of Resolution Professional: The applicant contended that the RP lacked adjudicatory powers to alter admitted claims. However, the RP argued that his role was limited to verifying claims from corporate records and not adjudicating them.
- Legal Provisions and Adjudication: The NCLT referred to Regulation 14(2) of the IBBI Insolvency Resolution Process for Corporate Persons Regulations 2016, which empowers the RP to revise admitted claims upon encountering new information. The RP’s revision was based on the discovery of debit notes raised by the corporate debtor, which were not initially disclosed by the applicant.
- NCLT’s Observations and Ruling: The NCLT concluded that the RP acted within his powers and followed due process in revising the claim. The adjudication found no evidence of ultra vires actions or arbitrariness by the RP. Consequently, the NCLT dismissed the application without costs, upholding the revised claim as lawful.
Analysis and Implications of Resolution Professionals
This judgment is a landmark in understanding the critical role of RPs in the CIRP process under the IBC. It underscores the importance of thorough documentation and transparency in claim submissions and supports the RP’s authority to revise claims based on factual verification.
Conclusion: Implications for Resolution Professionals
The decision by the NCLT New Delhi Bench in “Bharat Bhushan Vs. Samtex Desinz Pvt. Ltd.” serves as a precedent in delineating the boundaries of a Resolution Professional’s powers in claim revision. It reinforces the need for accuracy and completeness in financial reporting during the CIRP, ensuring the integrity of the insolvency resolution process.
Relevant Provisions of IBC and Referred Regulations
|Section 10 of IBC
|Deals with initiation of Corporate Insolvency Resolution Process (CIRP) by the corporate applicant itself.
|Regulation 14(2) of IBBI Insolvency Resolution Process for Corporate Persons Regulations 2016
|Empowers the Resolution Professional to revise admitted claims upon encountering new information.
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