Information Memorandum Should Reflect Creditors Claim , If It Finds Place In Balance Sheet : NCLT Indore

The National Company Law Tribunal ("NCLT"), Indore Bench, comprising of Shri Madan B. Gosavi (Judicial Member) and Shri Kaushalendra Kumar Singh (Technical Member), while adjudicating an application filed in Bank of Baroda v Divya Jyoti Industries Ltd., has held that if a claim of a creditor appears in the audited balance sheet of the Corporate Debtor, then it is the duty of the Resolution Professional to include such claims in the Information Memorandum. Background Facts Bank of Baroda had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC") before the NCLT Indore Bench ("Adjudicating Authority"), seeking initiation of Corporate Insolvency Resolution Process ("CIRP") against Divya Jyoti Limited ("Corporate Debtor"). The Application was admitted by the Adjudicating Authority vide an order dated 04.12.2020 and accordingly CIRP was initiated. Mr. Sajjan Kumar Dokania was appointed as Interim Resolution Professional ("IRP") and thereafter, as the Resolution Professional. The Commercial Tax Department ("Applicant") being one of the creditors of the Corporate Debtor, had filed its claim before the Resolution Professional and these claims were a part of the audited balance sheet of the Corporate Debtor. The Resolution Professional vide an email had rejected the claim of the Applicant. Therefore, the Applicant filed an application seeking direction to the Resolution Professional to consider the claim. The Resolution Professional submitted before the Adjudicating Authority that the claim was included in the Information Memorandum despite being rejected over email. Decision Of The Adjudicating Authority The Bench observed that since the claims appear in audited balance sheet of the Corporate Debtor, it is a duty of the Resolution Professional to consider it for inclusion in Information Memorandum. "We heard the RP in person he submitted that it is included in information memorandum however, Learned Counsel for the Applicant brought to our notice that E-mail was received by her client whereby, RP has rejected the claim. We deprecate such practice on behalf of the RP." The Bench held that if claims are reflected in Information Memorandum, then the Resolution Professional should have in all fairness informed the Applicant accordingly and ought not to have rejected the claims by way of such e-mail. The Bench dismissed the application as the claim was reflected in the Information Memorandum under contingent liabilities. Case Title: Bank of Baroda v Divya Jyoti Industries Ltd., C.P. (IB) 628/2018. Counsel For the Applicant : PCA Ms. Teena Saraswat Pandey, Adv. Mr. Vijayesh Atre, Adv. Mr. Rohit Dubey & Adv. Mr. Sandeep Pandey. Counsel For the Successful Resolution Applicant: Adv. Ms. Soumya Dharwa Counsel For the Suspended Management: Adv. Mr. Rohit Dubey & Ld. Adv. Mr. Sandeep Pandey Counsel For the CoC: PCA Mr. Nipun Singhvi Counsel For the RP: Mr. Sajjan Kumar Dokania, Mr. Mayur Jugtawat Counsel For the Respondent: Adv. Ms. Soumya Dharwa Click Here To Read/Download Order

Information Memorandum Should Reflect Creditors Claim , If It Finds Place In Balance Sheet : NCLT Indore

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Information Memorandum Should Reflect Creditors Claim , If It Finds Place In Balance Sheet : NCLT Indore

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