P.M. Cold Storage Pvt. Ltd. Vs. Goouksheer Farm Fresh Pvt. Ltd and Ors.
Company Appeal (AT) (Insolvency) No. 615 of 2020
Facts:
1.CIRP was initiated against Goouksheer Farm Fresh Pvt. Ltd. and a Committee of Creditors (CoC) was constituted by the Interim Resolution Professional (IRP) with the Appellant as the sole financial creditor in the CoC with 100% voting rights.
2.First CoC meeting took place on 8.1.2020, wherein the IRP informed the CoC that the claim of the Appellant as financial creditor was the only claim received upto 26.12.2019 amounting to Rs.65,80,505.00. Sole financial creditor requested for an urgent meeting of the CoC vide e-mail dated 23.1.2020 regarding the expenses and appointment of professionals done in the previously held CoC meeting and not being satisfied with the projected expenses, he filed IA 392/KB/2020 on 13.2.2020 for replacement of RP.
3.RP in the 4th CoC meeting held on 11.3.2020 informedthat the CoC had been reconstituted, with the admission of claim of another financial creditor New Hind Silk House Pvt. Ltd. (in short ‘NHSH’) with admitted claim of Rs.1,96,63,603.00 which resulted in reduced voting share of appellant to 25.07% from 100% in the CoC.
4.Appellant filed application challenging the admission of claim which was rejected by the AA. Appellant is challenging the order of AA.
Issue: Whether the order passed was correct and claim should be admitted?
Arguments:
For Appellants:
1.Counsel for Appellant argued that the claim of NHSH admitted by the RP is barred by limitation and therefore his inclusion in the CoC on the basis of such a claim is not legal. He submitted that claim in Form C submitted by NHSH on 26.2.2020 is verified by NHSH on 26.12.2020, which raises doubt about its authenticity.
2.Acknowledgment of debt pf NHSH which is purportedly signed by the corporate debtor and referred in the Impugned Order in paragraph 10, is unclear about the person who has signed it. Appellant submitted that two acknowledgments of the debt dated 1.4.2016 and 1.4.2017 are ostensibly signed by directors of the corporate debtor. He has reproduced the signatures of the directors who were on the board of directors of the corporate debtor from the record of Ministry of Corporate Affairs’ website to show that person who who were directors on the corporate debtor company on 1.4.2016 (which is the date on which the acknowledgment of debt is given on the Ledger account Statement) have different signatures than the one that appears on the document showing acknowledgment by the corporate debtor of the debt.
3.He argued that the mismatch of signatures raises distinct doubt about the authenticity of two documents. he further submitted that claim filed by the NHSH is purported to be given by hand, even though it is a normal practice in the present times that claims are filed either by electronic mail or registered/speed post, so that date of submission is certain.
4.It was argued that RP failed in verifying the genuineness and authenticity of the documents submitted by NHSH, which is a serious dereliction of duty and the Appellant is pursuing action with respect to the conduct of the RP before the Hon’ble Delhi High Court.
5.He further submitted that AA failed to appreciate the fact that the balance sheets for the financial years 2016-17, 2017-18 and 2018-19 were prepared by the RP through auditors, on 12.3.2020, after the RP had admitted the claim of NHSH.
For Respondent:
1.Counsel submitted that in the light of confirmation of balance dated 1.4.2017, which is signed by the corporate debtor, the said claim is clearly within limitation as the Section 7 petition was filed on 25.9.2019. He has further submitted that the Appellant was the lone member of the CoC at the beginning of CIRP, and it was only after 27.2.2020, when a claim of Rs.1,96,63,603/- of NHSH was admitted that the Appellant felt that his interests were being severely affected and it started raising question that the claim of NHSH was time-barred.
2.It was argued that NHSH has submitted ledger account showing balance dues, which confirmed by the corporate debtor on 1.4.2016 and again on 1.4.2017, bank statement of NHSH showing initial payment to the corporate debtor and Form 26AS showing TDS deposited by the corporate debtor in support of its claim.
3.He submitted that since inclusion of NHSH’s claim severely affected the vote share of the Appellant in the CoC, it started raising frivolous objections regarding admission of NHSH’s claim and inclusion in the CoC and this issue was discussed threadbare in the 5th meeting of CoC on 3.6.2020, when the RP had suggested taking legal opinion in the matter, which was also done.
4.Further there is no bar in the CIRP Regulations that the claim cannot be received by hand. Also, an issue raised by the Appellant that the date of verification of Form C is 26.12.2019, even though the Form was submitted on 26.2.2019 is due to typographic error.
5.It was argued that appeal is not maintainable because the Appellant has challenged the action of suspended directors in signing the balance confirmation documents, but they have not been impleaded in the appeal, and therefore, the appeal suffers from the deficiency of non-joinder of necessary parties.
Decision: Order passed was not correct and claim should not be admitted.
Rationale:
1.NCLAT noted that “the directors of the corporate debtor have also confirmed the genuineness of the balance confirmations’, but nowhere the name or identity of such directors has been disclosed. It does not stand to reason and logic as to how the present directors could authenticate the signatures of past directors who supposedly signed the confirmation of documents on 1.4.2016 and 1.4.2017.
2.Balance confirmations were ostensibly given in person to the RP as claimed by the RP, hence, they should normally contain signature of the person receiving these documents in the office of RP.
3,It also noted that balance sheets for FY 2016-17, FY 2017-18 and FY 2018-19 were prepared by the RP through Auditors on 12.3.2020. It noted that point of initiation of CIRP, only balance sheet for the FY 2015-16 was available. Thus, the inclusion of the debt of NHSH in the balance sheet for FY 2015-16 in the ‘Notes to Financial Statement’ (attached at pp.125-130 of the appeal paperbook) also does not appear to be reliable. It held that last payment by the corporate debtor was made to the financial creditor NHSH on 5.8.2016 and the claim was filed on 26.2.2019
4.It held that appeal does not suffered from non-joinder of two directors, who have signed the ledger account confirmations Acceptance/admission of claim of NHSH was done by the RP and the Appellant is affected by this action of RP.
5.It was the duty of the RP to exercise necessary care and diligence in verifying the claims and scrutinise the documents submitted with Form C for genuineness and authenticity. Such exercise does not appear to have been done by the RP in the present case.
Order copy:
