Extra amount received by financial creditors from a resolution applicant was to be refunded to appellant: NCLAT

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financial creditors; NCLAT

Case Details: Synergy Technologies v. Parthiv Parikh (Resolution Professional of Sanghvi Forging & Engineering Ltd.) - [2022] 138 taxmann.com 401 (NCLAT-New Delhi)

Judiciary and Counsel Details

    • M. Venugopal, Judicial Member & Dr Ashok Kumar Mishra, Technical Member
    • Gaurav Mitra, Jain, Ms Aditi Singh, Rajendra Beniwal Advs., Navin Pahwa, Sr. Adv. & Jaimain R. Dave for the Appellant.
    • Karan Valecha, Hera Dave, Dheeraj Garg, Bishwajit Dubey, Ms Neha Shivhare, Ms Srideepa Bhattacharyya, Vishnu Shriram, Tarak Damani, V.K. Pandey, Akhil Chadha, Parish Mishra & Karan Malhotra, Advs. for the Respondent.

Facts of the Case

In the instant case, an appeal was filed by the appellant against the decision of the NCLT.

The corporate debtor had taken a loan from the respondent -financial creditor bank. The respondent bank classified the account of the corporate debtor as Non-Performing Assets (NPA) and the respondent bank filed an application u/s 7 of the IBC against the corporate debtor, which was admitted by NCLT. Thereafter, Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor.

The appellant being the financial creditor filed its claim as an unsecured financial creditor. According to the appellant, no communication was received from IRP with regard to admission or rejection of the claim. The Appellant had already submitted the claim as Financial Creditor and still the Resolution Professional had failed to include it in the claim under Financial Creditor.

Meanwhile, the NCLT approved the Resolution Plan of the Resolution Applicant, when the objections of the Appellant were pending before the Adjudicating Authority. Thereafter, an appeal was made to NCLAT

NCLAT Held

NCLAT held that prima facie, there was an apparent mistake by the Resolution Professional for not considering the claim of the appellant-financial creditor in the Company Appeal being an unsecured loan holder as per the written statement of IRP. Therefore, the financial creditors who had received the major chunk from the resolution applicant were required to refund appropriately the original claim, minus any amount received by the financial creditor as an operational creditor in the same percentage as those financial creditors received from the resolution applicant.

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