The NCLAT held that examining the validity of any contractual agreement including its formatting etc lies outside the purview of the duties and responsibilities of the RP.
The National Company Law Appellate Tribunal (NCLAT), Principal bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra & Arun Baroka (Technical Members) was hearing an appeal and observed that examining the validity/sustainability of any contractual agreement including its formatting etc lies outside the purview of the charter of duties and responsibilities of the Resolution Professional.
The appeal was filed under Section 61 of the Insolvency and Bankruptcy Code, 2016, stemming from an order dated 21.11.2023 by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench – II) in IA No. 3594/2022 of CP (IB) No. 1397(PB)/2019. The Appellant, an Operational Creditor, sought acceptance of their claims rejected by the Respondent/Resolution Professional (RP). The Appellant contended that they were hired as a media management consultant by the Corporate Debtor and provided services as per the Consultancy Agreement. They submitted invoices and documents for the services rendered, which the RP rejected arbitrarily.
The Appellant argued that the RP exceeded their powers by seeking proof of services, which was beyond the RP's jurisdiction. They asserted that the RP's rejection of claims without proper evaluation violated CIRP Regulations. However, the Respondent argued that the Appellant failed to provide sufficient evidence to validate their claims.
The NCLAT examined the statutory provisions and the regulatory framework of the IBC, emphasizing the RP's duty to verify claims and seek additional evidence if necessary. The Appellate Authority observed that examining the validity/sustainability of any contractual agreement including its formatting etc lies outside the purview of the charter of duties and responsibilities of the RP.
The NCLAT bench noted the RP's repeated requests for documentation from the Appellant and their failure to provide satisfactory evidence. The Appellant's submissions, including media clippings, were deemed inadequate to substantiate their claims.
The NCLAT concluded that the RP acted diligently in seeking verification of claims and did not exceed their authority. It affirmed the Adjudicating Authority's decision, stating that the hindrance in deciding the Appellant's claim was due to their failure to provide proof of services. Therefore, the appeal was dismissed as lacking merit.