In a significant order, the Supreme Court has stayed the Corporate Insolvency Resolution Process (CIRP) pending against a Corporate Debtor, in view of the "futuristic claims" made by an Operational Creditor.
A three-Judge bench comprised of Justices Arun Mishra, BR Gavai and Krishna Murari has issued notice to the Insolvency Resolution Professional of Era Infra Engineering Ltd. and in the meanwhile, has stayed the CIRP proceedings against the Comapny.
"There shall be stay of CIRP proceedings until further orders. List the matter in the month of September, 2020," the SC said in a short order.
The stay order has come in a civil appeal filed by NTPC Ltd., Simhadri Project, against an order of the NCLAT, whereby its appeal against the order of NCLT, upholding the order of the Resolution Professional who had rejected the Appellant's claim, was dismissed.
The Appellant had argued that the NCLT's decision rejecting its claim on the ground that the same shall mature in the future, was in teeth of definition of the 'claim' as provided in Section 3(6) of the Insolvency and Bankruptcy Code, 2016.
"From the reading of the definition of claim, it is clear that "claim" means a right to payment even when such right is unmatured and disputed. Therefore, finding of the NCLAT that maturity of claims arising in future neither being asserted nor made out is unsustainable in law," the Appellant had submitted.
It had further contended that a Resolution Professional is being empowered only with the administrative powers, as opposed to quasi-judicial powers. Therefore, rejection of claims of the Appellant by the Resolution Professional is not permissible under the law.
The impugned order was also contested to be an impediment in the arbitration proceedings pending between the parties. It was submitted,
"The Adjudicating Authority failed to appreciate that the impugned order passed will come in the way of the Appellant in the arbitration proceedings pending between the Appellant and the Corporate Debtor. It is submitted that the arbitrator will get prejudice with the decision of the Adjudicating Authority rejecting the claims of the Appellant."
The matter was argued by Solicitor General Tushar Mehta, briefed by Advocates Adarsh Tripathi, Anish Gupta and Nikhil Kandpal on behalf of NTPC.
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