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Navneet Kumar Gupta, Resolution Professional of Monnet Power Company Limited v/s Bharat Heavy Electricals Limited, New Delhi


Company & Directors' Information:- MONNET POWER COMPANY LIMITED [Active] CIN = U01403CT2007PLC020179

Company & Directors' Information:- BHARAT HEAVY ELECTRICALS LIMITED [Active] CIN = L74899DL1964GOI004281

Company & Directors' Information:- DELHI POWER COMPANY LIMITED [Active] CIN = U40103DL2001SGC111528

Company & Directors' Information:- MONNET POWER LIMITED [Amalgamated] CIN = U40108CT1999PLC013646

Company & Directors' Information:- MONNET POWER LIMITED [Not available for efiling] CIN = U40108DL1997PLC086211

Company & Directors' Information:- NEW INDIA ELECTRICALS LIMITED [Active] CIN = U85110KA1994PLC015512

Company & Directors' Information:- U P ELECTRICALS LIMITED [Active] CIN = L31200DL1971PLC005666

Company & Directors' Information:- S T ELECTRICALS PRIVATE LIMITED [Active] CIN = U31909PN1998PTC012975

Company & Directors' Information:- BHARAT KUMAR & COMPANY PRIVATE LIMITED [Active] CIN = U51909WB2010PTC144689

Company & Directors' Information:- BHARAT POWER CORPORATION PRIVATE LIMITED [Active] CIN = U74899DL1984PTC019033

Company & Directors' Information:- B L ELECTRICALS LIMITED [Active] CIN = U29308CH1989PLC009113

Company & Directors' Information:- V N P ELECTRICALS PRIVATE LIMITED [Active] CIN = U31100MH2004PTC144339

Company & Directors' Information:- M E ELECTRICALS PRIVATE LIMITED [Active] CIN = U74900KA2011PTC061380

Company & Directors' Information:- V S ELECTRICALS PRIVATE LIMITED [Active] CIN = U40104WB1995PTC075508

Company & Directors' Information:- P S ELECTRICALS PRIVATE LIMITED [Active] CIN = U27209TN1982PTC009485

Company & Directors' Information:- K A ELECTRICALS PRIVATE LIMITED [Active] CIN = U31103DL2011PTC224196

Company & Directors' Information:- P. R. ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U29268MH2009PTC190099

Company & Directors' Information:- R J M S ELECTRICALS PRIVATE LIMITED [Active] CIN = U31401KA2011PTC059008

Company & Directors' Information:- B R I ELECTRICALS PVT LTD [Active] CIN = U45201GJ1995PTC025017

Company & Directors' Information:- K P ELECTRICALS PRIVATE LIMITED [Active] CIN = U99999MH1959PTC011501

Company & Directors' Information:- ELECTRICALS INDIA PVT LTD [Active] CIN = U74210MH1977PTC004605

Company & Directors' Information:- M S K ELECTRICALS PVT LTD [Active] CIN = U31200WB1984PTC038215

Company & Directors' Information:- N C S ELECTRICALS INDIA LTD [Strike Off] CIN = U31300DL1982PLC013233

Company & Directors' Information:- B K ELECTRICALS PRIVATE LIMITED [Active] CIN = U31909DL2005PTC134388

Company & Directors' Information:- E INDIA ELECTRICALS PRIVATE LIMITED [Active] CIN = U74999DL2015PTC276416

Company & Directors' Information:- M J ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U99999MH1984PTC032408

Company & Directors' Information:- B C ELECTRICALS PVT LTD [Active] CIN = U31200WB1988PTC044210

Company & Directors' Information:- V V ELECTRICALS PRIVATE LIMITED [Active] CIN = U31400TG2015PTC098219

Company & Directors' Information:- D P H ELECTRICALS PRIVATE LIMITED [Active] CIN = U31909DL2009PTC186700

Company & Directors' Information:- K & G ELECTRICALS PRIVATE LIMITED [Active] CIN = U31908DL2008PTC176859

Company & Directors' Information:- G S R ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31908KA2011PTC058093

Company & Directors' Information:- NEW POWER ELECTRICALS PRIVATE LIMITED [Active] CIN = U31909MH1996PTC104397

Company & Directors' Information:- J K ELECTRICALS PRIVATE LIMITED [Active] CIN = U31501DL2011PTC218538

Company & Directors' Information:- F T S ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U29191WB1997PTC086018

Company & Directors' Information:- B S P HEAVY ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31100KA1995PTC018488

Company & Directors' Information:- S AND C ELECTRICALS INDIA PRIVATE LIMITED [Strike Off] CIN = U31200TN2008PTC066922

Company & Directors' Information:- J. B. ELECTRICALS PRIVATE LIMITED [Active] CIN = U51900MH2006PTC159750

Company & Directors' Information:- M. L ELECTRICALS PRIVATE LIMITED [Active] CIN = U31401MH2008PTC184853

Company & Directors' Information:- D. K. ELECTRICALS PRIVATE LIMITED [Active] CIN = U51101MH2011PTC221573

Company & Directors' Information:- R J ELECTRICALS PRIVATE LIMITED [Active] CIN = U40300DL2007PTC161839

Company & Directors' Information:- K R ELECTRICALS PVT LTD [Active] CIN = U45309KL1975PTC002663

Company & Directors' Information:- J P ELECTRICALS INDIA PRIVATE LIMITED [Strike Off] CIN = U74899DL1987PTC029523

Company & Directors' Information:- G V ELECTRICALS PVT LTD [Active] CIN = U28920MH1985PTC035529

Company & Directors' Information:- A T ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC073323

Company & Directors' Information:- L R ELECTRICALS PRIVATE LIMITED [Active] CIN = U74899DL1985PTC021712

Company & Directors' Information:- A. D. ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U74999WB2010PTC154952

Company & Directors' Information:- J AND J ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31100DL1988PTC034110

Company & Directors' Information:- B N B ELECTRICALS PVT. LTD. [Strike Off] CIN = U51395RJ1983PTC002651

Company & Directors' Information:- KUMAR ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31300UP1981PTC005406

Company & Directors' Information:- S. K. ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U29308UP1995PTC018037

Company & Directors' Information:- A C E ELECTRICALS PVT LTD [Strike Off] CIN = U32201GJ1987PTC009880

Company & Directors' Information:- I AND I ELECTRICALS PRIVATE LIMITED [Active] CIN = U51395RJ1988PTC004250

Company & Directors' Information:- B B ELECTRICALS PRIVATE LIMITED [Active] CIN = U31200MH1978PTC020462

Company & Directors' Information:- R. S. S. ELECTRICALS PRIVATE LIMITED [Under Process of Striking Off] CIN = U51909UP2014PTC064814

Company & Directors' Information:- G D ELECTRICALS PRIVATE LIMITED [Active] CIN = U51505DL2003PTC120403

Company & Directors' Information:- R R ELECTRICALS PVT LTD [Active] CIN = U31909GJ1980PTC003764

Company & Directors' Information:- A 2 Z ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31401WB2012PTC186695

Company & Directors' Information:- M K ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31101UP1988PTC009605

Company & Directors' Information:- D J ELECTRICALS PRIVATE LIMITED [Active] CIN = U32106MH2006PTC159195

Company & Directors' Information:- G R ELECTRICALS PRIVATE LIMITED [Active] CIN = U74120MH2011PTC216648

Company & Directors' Information:- D N ELECTRICALS PRIVATE LIMITED [Active] CIN = U74120MH2011PTC225500

Company & Directors' Information:- T I R ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U40300UP2013PTC055734

Company & Directors' Information:- J P S ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31300DL1998PTC096590

Company & Directors' Information:- M F ELECTRICALS PRIVATE LIMITED [Active] CIN = U74899DL1994PTC062541

Company & Directors' Information:- G P G ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U52100DL2010PTC198115

Company & Directors' Information:- A. G. P. ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U31103GJ2011PTC064199

Company & Directors' Information:- U A ELECTRICALS PRIVATE LIMITED [Strike Off] CIN = U32109DL1992PTC050703

Company & Directors' Information:- NAVNEET (INDIA) PVT LTD [Strike Off] CIN = U17219WB1976PTC030456

Company & Directors' Information:- D V J ELECTRICALS PVT LTD [Strike Off] CIN = U31103WB1988PTC043721

Company & Directors' Information:- D L F ELECTRICALS PVT LTD [Strike Off] CIN = U27101DL1984PTC018955

    Company Appeal (AT) (Insolvency) No. 743 of 2018

    Decided On, 26 February 2019

    At, National Company Law Appellate Tribunal

    By, THE HONOURABLE MR. JUSTICE S.J. MUKHOPADHAYA
    By, CHAIRPERSON

    For the Appellant: Atul Sharma, Hitesh Kumar, Ashly Cherian, Advocates. For the Respondent: Anil Puri, Senior Advocate assisted by Shubham Saxena, Ravi Chandra, I.P.S. Oberoi, Gunjan, Aditi Sharma, Advocates.



Judgment Text


1. In the 'corporate insolvency resolution process' against 'Monnet Power Company Limited' (Corporate Debtor) the respondent 'Bharat Heavy Electricals Ltd.' (BHEL) (Operational Creditor) filed an application before the 'Resolution Professional' to admit the entire claim of Rs. 977,49,97,545/- along with interest. The 'Resolution Professional' on consideration of the same, had not accepted part of the claim.

2. The Adjudicating Authority (National Company Law Tribunal), Mumbai Bench by impugned order dated 12th October, 2018 while determined to 'inventory cost' etc. held that the 'Resolution Professional' wrongly disallowed the substantial claim in its entirety and directed the 'Resolution Professional' to re-examine the claim on the basis of the accounts and evidence of BHEL and if the evidences corroborated the claim, the same should also be taken into account while finalising the total claim of BHEL.

3. The 'Resolution Professional' being aggrieved has preferred this appeal.

4. The only question arises for consideration in this appeal is whether the 'Resolution Professional' has jurisdiction to reject the claim of BHEL in its entirety, without going into the evidence.

5. The aforesaid issue fell for consideration before the Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr. v. Union of India & Ors. - Writ Petition (Civil) No. 99 of 2018' (2019 SCC OnLine SC 73). In the said case, the Hon'ble Supreme Court by its decision dated 25th January, 2019 held :

"RESOLUTION PROFESSIONAL HAS NO ADJUDICATORY POWERS.

85. It is clear from a reading of the Code as well as the Regulations that the resolution professional has no adjudicatory powers. Section 18 of the Code lays down the duties of an interim resolution professional as follows:

"18. Duties of interim resolution professional.-

(1) The interim resolution professional shall perform the following duties, namely-

(a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate debtor, including information relating to-

(i) business operations for the previous two years;

(ii) financial and operational payments for the previous two years;

(iii) list of assets and liabilities as on the initiation date; and

(iv) such other matters as may be specified;

(b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under Sections 13 and 15;

(c) constitute a committee of creditors;

(d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors;

(e) file information collected with the information utility, if necessary; and

(f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including-

(i) assets over which the corporate debtor has ownership rights which may be located in a foreign country;

(ii) assets that may or may not be in possession of the corporate debtor;

(iii) tangible assets, whether movable or immovable;

(iv) intangible assets including intellectual property;

(v) securities including shares held in any subsidiary of the corporate debtor, financial instruments, insurance policies;

(vi) assets subject to the determination of ownership by a court or authority;

(g) to perform such other duties as may be specified by the Board.

Explanation.-For the purposes of this section, the term "assets" shall not include the following, namely-

(a) assets owned by a third party in possession of the corporate debtor held under trust or under contractual arrangements including bailment;

(b) assets of any Indian or foreign subsidiary of the corporate debtor; and

(c) such other assets as may be notified by the Central Government in consultation with any financial sector regulator."

86. Under the CIRP Regulations, the resolution professional has to vet and verify claims made, and ultimately, determine the amount of each claim as follows:

"10. Substantiation of claims.-The interim resolution professional or the resolution professional, as the case may be, may call for such other evidence or clarification as he deems fit from a creditor for substantiating the whole or part of its claim."

xxx xxx xxx

"12. Submission of proof of claims.-

(1) Subject to sub-regulation (2), a creditor shall submit claim with proof on or before the last date mentioned in the public announcement.

(2) A creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit the claim with proof to the interim resolution professional or the resolution professional, as the case may be, on or before the ninetieth day of the insolvency commencement date.

(3) Where the creditor in sub-regulation (2) is a financial creditor under regulation 8, it shall be included in the committee from the date of admission of such claim:

Provided that such inclusion shall not affect the validity of any decision taken by the committee prior to such inclusion.

13. Verification of claims.-

(1) The interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it.

(2) The list of creditors shall be -

(a) available for inspection by the persons who submitted proofs of claim;

(b) available for inspection by members, partners, directors and guarantors of the corporate debtor;

(c) displayed on the website, if any, of the corporate debtor;

(d) filed with the Adjudicating Authority; and

(e) presented at the first meeting of the committee.

14. Determination of amount of claim.-

(1) Where the amount claimed by a creditor is not precise due to any contingency or other reason, the interim resolution professional or the resolution professional, as the case may be, shall make the best estimate of the amount of the claim based on the information available with him.

(2) The interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of claims admitted, including the estimates of claims made under subregulation (1), as soon as may be practicable, when he comes across additional information warranting such revision."

87. It is clear from a reading of these Regulations that the resolution professional is given administrative as opposed to quasi-judicial powers. In fact, even when the resolution professional is to make a "determination" under Regulation 35A, he is only to apply to the Adjudicating Authority for appropriate relief based on the determination made as follows:

"35A. Preferential and other transactions.-(1) On or before the seventy-fifth day of the insolvency commencement date, the resolution professional shall form an opinion whether the corporate debtor has been subjected to any transaction covered under sections 43, 45, 50 or 66.

(2) Where the resolution professional is of the opinion that the corporate debtor has been subjected to any transactions covered under sections 43, 45, 50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board.

(3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirty-fifth day of the insolvency commencement date.

88. As opposed to this, the liquidator, in liquidation proceedings under the Code, has to consolidate and verify the claims, and either admit or reject such claims under Sections 38 to 40 of the Code. Sections 41 and 42, by way of contrast between the powers of the liquidator and that of the resolution professional, are set out hereinbelow:

"41. Determination of valuation of claims.- The liquidator shall determine the value of claims admitted under Section 40 in such manner as may be specified by the Board.

42. Appeal against the decision of liquidator.-A creditor may appeal to the Adjudicating Authority against the decision of the liquidator accepting or rejecting the claims within fourteen days of the receipt of such decision."

89. It is clear from these Sections that when the liquidator "determines" the value of claims admitted under Section 40, such determination is a "decision", which is quasi-judicial in nature, and which can be ap

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pealed against to the Adjudicating Authority under Section 42 of the Code. 90. Unlike the liquidator, the resolution professional cannot act in a number of matters without the approval of the committee of creditors under Section 28 of the Code, which can, by a two-thirds majority, replace one resolution professional with another, in case they are unhappy with his performance. Thus, the resolution professional is really a facilitator of the resolution process, whose administrative functions are overseen by the committee of creditors and by the Adjudicating Authority." 6. The present case being covered by the decision of the Hon'ble Supreme Court in 'Swiss Ribbons Pvt. Ltd. & Anr.' (Supra), we are not inclined to interfere with the impugned order dated 12th October, 2018 passed by the Adjudicating Authority. The 'Resolution Professional' is directed to act in accordance with the directions of the Adjudicating Authority. 7. The appeal is dismissed with aforesaid observations and directions. No costs.
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