The Chennai Bench of the National Company Law Appellate Tribunal ( NCLAT ) held that the liquidator is not empowered to decide the matters involving claims and counter claims.
The appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016, challenging the impugned order of the Adjudicating Authority / National Company Law Tribunal, Hyderabad Bench under section 60(5) of Insolvency and Bankruptcy Code, 2016.
Pursuant to the public announcement made by the Respondent as the Liquidator, the Appellant herein submitted a claim for sum of Rs. 31.71 crores in Form-C. The said claim was rejected by the Respondent. Challenging the rejection, the Appellant filed an appeal under section 42 of IBC and both the IAs were heard by AA/ NCLT, Hyderabad dismissed both the applications.
The counsel for the appellant submitted that coming to a conclusion of rejection of application made by the Appellant by observing that the Liquidator cannot decide on the dues to the Appellant / OC when claims and counter claims are involved and that dispute if any between the CD and the OC has to be settled by the competent Civil Court without assigning any reason, even though power has been conferred on the AA under section 42 of IBC to adjudicate on the same.
The counsel for the respondent contended that the Corporate Debtor ( CD ) has been sold as a Going Concern in auction on as is where is basis in form of an Acquisition Plan and the Plan has been approved by AA. Accordingly, the Board of CD has been reconstituted and she as Liquidator has no powers to entertain any claim received at this point of time. Hence the present appeal is a futile exercise with the aim to set off the receivables against the payables and that is why the appellant has not made the Acquirer, a necessary party.
A Two-Member Bench comprising Justice M. Venugopal, Member (Judicial) and Jatindranath Swain, Member (Technical) observed that “The Respondent / Liquidator fairly addresses these points by stating that the items of claim not admitted by her as ‘due payable’ are those for which no documents such as invoice / dispatch documents were available in the records of CD and which were not also provided by the Appellant. She has also fairly answered the point by stating that the disallowed claims could be due to non-performance of CD which will require adjudication by a competent Civil Court / Arbitrator, before they can be translated into ‘Dues’ within the framework of IBC and has cited the relevant law in form of a decision by the Apex Court to support her assertion.”
“It is also seen that the AA / NCLT, Hyderabad have dealt on these issues in detail and given succinct reasons as to why they have accepted the submission and reasoning of the Liquidator as to why she has rejected the claim of the Appellant. They have rightly held that when claim and counter claims are involved Liquidator cannot decide the same and therefore the Liquidator rightly rejected the claim” the Tribunal held.
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