The NCLAT, New Delhi expounded that there is no quarrel with the scheme given under Sections 38 to 42 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) related to the claims, however, once the claim is admitted, the Liquidator cannot reject or modify the claim. The Liquidator has to approach the NCLT for purpose of modification.
Brief Facts:
The Appellant (Liquidator) filed an application before the NCLT seeking relief of allowing to reduce the claim of the Canara bank. This application was rejected. Hence, the present appeal.
Contentions of the Appellant:
It was argued that the Appellant received additional information based on which it proceeded as per Regulation 31(3) of the IBBI (Liquidation Process) Regulations, 2016 (hereinafter referred to as “2016 Regulations”). It was submitted that the Liquidator is allowed to modify the entry in the list of stakeholders upon receiving additional information. Further, it was contended that Regulation 31(3) is a special provision that comes into the picture when the Liquidator gets to know some special information after admitting claims.
Contentions of the Respondent:
It was contended that the Liquidator has to verify the claims as per the time prescribed by the Board. It was argued that Sections 38 to 42 of the hereinafter referred to as IBC must apply.
Observations of the Tribunal:
It was expounded that there is no quarrel with the scheme given under Sections 38 to 42 related to the claims, however, once the claim is admitted, the Liquidator cannot reject or modify the claim. The Liquidator has to approach the NCLT for purpose of modification. This is exactly what was done by the Liquidator in the present case.
The decision of the Tribunal:
Therefore, the Appellate Tribunal based on the aforementioned finding set aside the order of the NCLAT and remanded the matter back to the NCLAT. Accordingly, the appeal was allowed.
Case Title: Vijay Kumar Gupta v. Canara Bank
Coram: Justice Mr. Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member)
Case No: Company Appeal (AT)(Ins.) No. 1015 of 2021
Advocate for Appellant: Adv. Mr. Kushal Bansal
Advocates for Respondent: Advs. Mr. PBA Srinivasan, Mr. V. Aravind, Ms. Srishti Bansal, Ms. Prerana Sabharwal, Mr. Sumit Swami
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