Resolution Professional do not have Locus standi to file appeal against claim allowed by Adjudicating Authority: NCLAT

RP is not vested with any adjudicatory powers. A decision taken by AA in regard to admission or rejection of a claim cannot be examined by RP. The order passed by NCLAT New Delhi (principle bench) in the case of Avil Menezes Resolution Professional of AMW Auto Component Ltd v. Shah Coal Pvt Ltd (Company Appeal (AT) (Insolvency) No. 63 of 2021) by Hon’ble Justice Shri Bansi Lal Bhat.

The fact of the case was such that the appeal filed by the RP of ‘AMW Auto Components Ltd.’- (Corporate Debtor) is coordinated against the condemned request dated eighteenth December, 2020 passed by the Adjudicating Authority (Public Company Law Tribunal), Ahmedabad Bench, Ahmedabad, Court-2, allowing application of Respondent-‘Shah Coal Pvt. Ltd.’ under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (“I&B Code” for short) to incorporate its guarantee in the class of ‘Financial Creditor’ pouncing upon the choice on the ground that the case identified with the supply of merchandise and fell inside the domain of the ‘operational debt’, in this way, couldn’t be characterized under the class of ‘financial debt’.

It is astounding to find that the appeal has been liked by the Resolution Professional who is essential for the Corporate Insolvency Resolution Process mechanism and as far as subsection (1) of Section 21, he is simply expected to gather the cases which suggest an examination with the record and confirmation. Not at all like a Liquidator who is engaged to concede or dismiss a case under Section 40 of the ‘I&B Code’ against which an appeal deceives the Adjudicating Authority (NCLT), the Resolution Professional isn’t vested with any adjudicatory powers and being a piece of the mechanism all activities taken by him are dependent upon the control of the Mediating Authority. Indeed, even a choice was taken by the Liquidator as to confirmation or dismissal of the case can’t be addressed by the Liquidator in appeal and it is just the Creditor who can pounce upon something very similar, being a distressed party. Seen accordingly, the Resolution Professional can’t be an oppressed gathering also, has no locus to keep up this appeal.

Section 21(1) of I&B code 2016-  (1) The interim resolution professional shall after collation of all claims received against the corporate debtor and determination of the financial position of the corporate debtor, constitute a committee of creditors.

Resolution Professional who is part of CIRP mechanism and in terms of sub-section (1) of Section 21, he is only supposed to collate the claims which imply a comparison with the record and verification.

It is only the Creditor who can assail the same, being an aggrieved party. Viewed thus, the Resolution Professional cannot be an aggrieved party and has no locus to maintain this appeal.

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