NTPC LTD. (SIMHADRI PROJECT) v. RAJIV CHAKRABORTY

Case Details & Bench

Court: High Court
Hon'ble Judges: A. M. Khanwilkar
B. R. Gavai
Hrishikesh Roy
Judgment Date: 2020-11-16
Court Decision / Holding: The civil appeal is disposed of. The interim order previously in place is vacated. The authorities are urged to expedite the resolution process. Pending applications, if any, are disposed of.
Final Disposition: Civil appeal disposed of; interim order vacated; resolution process to be expedited.

Parties to the Case

Appellants / Petitioners

NTPC Ltd. (Simhadri Project)

Respondents

Rajiv Chakraborty

Legal Representation & Advocates

Counsels for Petitioners

• Tushar Mehta, SG
• Adarsh Tripathi
• Gaurav (Adv.)

Counsels for Respondents

• C.U. Singh, Sr. Adv.
• Ms. Vanita Bhargava
• Ajay Bhargava
• Siddharth Srivastava
• Mohit Kishore
• Ms. Warmika Trehan
• Shivank Diddi

Case Synopsis & Summary

NTPC Ltd. (Simhadri Project) v. Rajiv Chakraborty deals with the treatment of a creditor’s claim in the CIRP Information Memorandum under the Insolvency and Bankruptcy Code, 2016. The appellant contends that its name and claim were not correctly reflected under the heading ‘Claims of Operational Creditors’ and were instead listed under ‘List of Other Creditor Claims (excluding Related Party Claims and Employees and Workmen Claims) as on 17 July 2019.’ The claim remains under adjudication before an Arbitrator, and the Information Memorandum’s objective is to provide information about the debtor’s financial position, not to adjudicate or extinguish claims. The Resolution Professional is not vested with authority to accept or disallow claims. The Adjudicating Authority and the Appellate Tribunal treated the appellant’s claim as an adjudication matter, noting that it has not been extinguished and will be subject to adjudication by the Arbitrator. The appellant may pursue appropriate legal remedies if aggrieved with the final resolution plan. The Court disposes of the appeal, vacates any interim order, and directs expeditious completion of the resolution process. All pending applications are disposed of, clarifying that the claim remains in play until adjudicated by the competent forum.

Provisions of Law Cited

Insolvency and Bankruptcy Code, 2016

Submissions & Arguments

Contentions of Appellants / Petitioners

The appellant argued that the Information Memorandum should reflect the creditor’s claim under the heading ‘Claims of Operational Creditors.’ It was submitted that the claim, though under adjudication before an Arbitrator, ought to be recognized in the operational creditors’ category and not relegated to the ‘other creditors’ list. It was contended that the Resolution Professional’s role is limited to providing a financial snapshot and cannot adjudicate or extinguish claims; the final resolution plan would determine admissibility and extent of the claim, not the Information Memorandum. The appellant urged that failure to place the claim correctly could prejudice its rights in the resolution process and in challenge to the final plan.

Contentions of Respondents

The respondents contended that the appellant’s claim is already recorded in the Information Memorandum under ‘List of Other Creditor Claims (excluding Related Party Claims and Employees and Workmen Claims) as on 17 July 2019,’ i.e., as a claim under adjudication. They argued that the Information Memorandum’s purpose is to present a concise financial position, not to decide or extinguish rights. The Resolution Professional has no power to accept or disallow claims; adjudication lies with the arbitrator or other competent forum. The memorandum’s mention of the claim does not extinguish it, and it will be appropriately dealt with in the final resolution plan. If aggrieved, the appellant may seek legal remedies as permitted by law; the process should be expedited, and rights preserved for subsequent adjudication.

Extracted Judgment Text

Exact text extracted from official judgment records.

1090 SUPREME COURT REPORTS[2020] 13 S.C.R. 1090 [2020] 13 S.C.R. A ## NTPC LTD. (SIMHADRI PROJECT) v. ## RAJIV CHAKRABORTY (Civil Appeal No. 2798 of 2020) B NOVEMBER 16, 2020 ## **[A. M. KHANWILKAR, B. R. GAVAI AND HRISHIKESH ROY, JJ.]** _Insolvency and Bankruptcy Code, 2016:_ C _Corporate Insolvency Resolution Process – Information Memorandum – Prepared by Resolution Professional – Appellantcreditor’s name was put in the ‘List of Other Creditors’ and was not reflected in ‘Claims of Operational Creditors’ – Appellant’s claim that its name should have been reflected in ‘Claims of Operational Creditors’ – Held: Since the claim of the appellant is still pending_ D _adjudication before the Arbitrator, it has rightly been described in the memorandum as other creditors claim – The purpose of Information Memorandum is only to provide relevant information regarding financial position of the Company – It does not decide the claim – The Resolution Professional has no authority to accept_ E _or disallow the claims – Appellant’s claim would not get extinguished unless it is adjudicated upon by a competent forum or by operation of law – Appellant can take recourse to appropriate remedy, if it is aggrieved with the final resolution plan – Matter disposed of._ CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2798 F of 2020. From the Judgment and Order dated 02.06.2020 of the National Company Law Appellate Tribunal, New Delhi in Company Appeal (AT) (INSOLVENCY) No. 493 of 2020. Tushar Mehta, SG, Adarsh Tripathi and Gaurav, Advs. for the G Appellant. C.U. Singh, Sr. Adv., Ms. Vanita Bhargava, Ajay Bhargava, Siddharth Srivastava, Mohit Kishore, Ms. Warmika Trehan and Shivank Diddi, Advs. for the Respondent. H 1090 NTPC LTD. (SIMHADRI PROJECT) v. RAJIV CHAKRABORTY 1091 The following Order of the Court was passed : A ## **ORDER** We have heard learned counsel for the parties. The limited issue in this appeal is about the claim of the appellant not being reflected under the heading ‘Claims of Operational Creditors’ in the Information Memorandum prepared by the Resolution Professional. The Adjudicating Authority and the Appellate Tribunal have taken a view that the appellant’s claim is already noted in Information Memorandum under the title, ‘List of Other Creditor Claims (excluding Related Party Claims and Employees and Workmen Claims) as on 17[th] July, 2019’. No grievance has been made by the appellant that the figure noted therein is incorrect. According to the appellant, the claim amount should have been reflected under the heading ‘Claims of Operational Creditors’. We do not agree with this submission. B C D It is not in dispute that the claim of the appellant is still pending adjudication before the Arbitrator and it has been, therefore, rightly described in the memorandum as other creditor claims (claims under adjudication). The purpose of memorandum is only to provide relevant information regarding the financial position of the company in question. It is not about deciding the claim or disregarding the claim amount, if it exists in law. The Resolution Professional has no authority/power to accept or disallow the claims. The appellant’s claim would not get extinguished unless it is adjudicated upon by a competent forum or by operation of law. Suffice it to observe that the claim of the appellant has been taken note of in the information memorandum and does not get extinguished as such; but it will be subject to adjudication by the Arbitrator. Since it is part of the memorandum, it is obvious that the resolution applicant would take the same into account while submitting his proposal, due notice whereof will be taken by the committee of creditors as well, and dealt with appropriately in the final resolution plan. E F G In the event, the appellant has any grievance about the nature or manner of provision made in the final resolution plan qua its claim; and if H 1092 SUPREME COURT REPORTS [2020] 13 S.C.R. - A aggrieved with the final resolution plan, may take recourse to appropriate remedy as per law. All contentions available to the appellant in that regard are left open while once again making it clear that the claim of the appellant has not been treated as extinguished. B In view of the above, the civil appeal is disposed of. As the appeal is disposed of, the interim order passed earlier stands vacated. As a result of which, we expect the concerned authorities to C expedite the process of resolution. Pending applications, if any, stand disposed of. Kalpana K. Tripathy Appeal disposed of. D E F G H