There is an overlap of duties when it comes to adjudication of the claims of creditors. Section 18 of the Insolvency & Bankruptcy Code enumerates the duties of the interim resolution professional. It states that the interim resolution professional shall receive and collate all the claims submitted by creditors to him pursuant to public announcement made by him.1 After the committee of creditors is constituted by the Interim Resolution Professional2, a meeting of the committee of creditors is convened by him. In the first meeting, the Resolution Professional is appointed by the Committee of Creditors.3 Section 25 enumerates the duties of the Resolution Professional. It states that the Resolution Professional has to maintain the updated list of claims.4 After the determination of the claims of creditors, the information memorandum is prepared based on which the Resolution Plan of the Corporate Debtor is prepared.
The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016 (hereinafter referred to as "Regulation") throws light on the process of determination of the amount claimed by the creditors. The claims have to be made in accordance with the Forms specified in the Schedule of the Regulations.5 These claims are proved on the basis of the records available with the Information Utility and other relevant documents like financial statements as evidence of debt, an order of a court that adjudicated on the nonpayment of debt, contract for the supply of goods and services to the Corporate Debtor, or invoice demanding payment for goods and services provided to the Corporate Debtor etc.6 The Interim Resolution Professional or the Resolution Professional may call for other evidence or clarification for the substantiation of the whole or part of the claim.7 The Interim Resolution Professional or the Resolution Professional verifies the claim within a period of seven days from the last date of the receipt of claims and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them and the amount of their claims admitted.8 This list of creditors is displayed on the website of the corporate debtor. It is also filed with the Adjudicating Authority and needs to be presented in the first meeting of committee of creditors.9 However, where the amount claimed by a creditor is not precise, interim resolution professional or the resolution professional shall make the best estimate of the amount based on the information available to him. As and when the additional information with respect to the determination of claims is brought to the notice of the interim resolution professional or the resolution professional, he can revise the amount of claim depending on the information.10
The Code provides for proof of claims being submitted and verified twice. Depending on a case-to case basis, it is either the Interim Resolution Professional or the Resolution Professional who determine the claim of creditors. When the Interim Resolution Professional and the Resolution Professional appointed thereafter is the same person then there is no overlap of duties. However, if the Interim Resolution Professional is replaced by the Committee of Creditors, it is not clear whether he will re-determine the amount of claim of the creditors ascertained by the Interim Resolution Professional. Further, once the amount has been ascertained by the Resolution Professional, there is no forum for the creditor to raise a dispute regarding such determined amount. For instance, if the creditor is not in agreement with the "best estimate" so determined, he has no recourse. There is lack of clarity and remains unaddressed by the Code.
However, by way of Interim Application the unsatisfied creditors have started moving an application before Adjudicating Authority. Recently, in SBI v. S. Muthuraja & Ors (CA (AT) (Insolvency) No. 105 of 2017) pending before Hon'ble NCLAT where SBI has filed an application for not being made a party to committee of the creditors by Interim Resolution Professional.
No doubt, many such applications will be filed before the adjudicating authority by the Corporate Debtor or the creditors or those who have any grievance from the Resolution Professional appointed.
Footnotes
1 Section 18(b), the Bankruptcy and Insolvency Code, 2016;
2 Section 21(1), the Bankruptcy and Insolvency Code, 2016;
3 Section 22(1), the Bankruptcy and Insolvency Code, 2016;
4 Section 25(e), the Bankruptcy and Insolvency Code, 2016;
5 Regulation 7, 8, and 9, The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016;
6 Ibid;
7 Regulation 10, The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016.
8 Regulation 13(1), The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016;
9 Regulation 13(2), The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016;
10 Regulation 14, The Insolvency and Bankruptcy Board of India (Insolvency Resolution process for Corporate Persons) Regulations, 2016.
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