NCLAT (2024.11.08) in Paschimanchal Vidyut Vitran Nigam Ltd. Vs. Sandeep Goyal (Liquidator) [Company Appeal (AT) (Insolvency) No.1081 of 2024 & I.A. No. 3905 of 2024] held that;
It is submitted that the Adjudicating Authority has erred in observing that the amount set off by PVVNL against anticipated claim cannot be permitted. The present is not a case of anticipated claim but the claim filed by the Appellant is with adjustment of security claim.
The view of the Adjudicating Authority that there could not have been set off/ adjustment of the claim by the Appellant cannot be approved. We, thus, are of the view that direction of the Adjudicating Authority to pay Rs.1,15,33,600/- could not be sustained.
Excerpts of the Order;
08.11.2024: Heard learned counsel for the Appellant as well as learned counsel appearing for the Liquidator. This appeal has been filed against order passed by the Adjudicating Authority dated 03.04.2024 in IA No.147/2022 by which the Adjudicating Authority has allowed the application filed by the Liquidator for refund of the security amount of Rs.1,04,00,000/-. Aggrieved by the order appeal has been filed by Paschimanchal Vidyut Vitran Nigam Ltd.
# 2. Learned counsel for the Appellant challenging the order submits that on commencement of the liquidation the Appellant has filed a claim on 24.12.2021 to the Liquidator for a total amount of Rs.4,04,19,294/- and in said claim it was mentioned that security amount has been adjusted. It is submitted that no response was given by the Liquidator to the claim submitted by the Appellant and the Liquidator has filed an application before the Adjudicating Authority in which impugned order has been passed.
# 3. Learned counsel for the Respondent opposing the submission of learned counsel for the Appellant submits that the Adjudicating Authority has rightly relied on judgment of Hon’ble Supreme Court in Bharti Airtel Ltd. and Another vs. Vijaykumar V. Iyer and Others and the said adjustment was not permissible as held by the Hon’ble Supreme Court.
# 4. We have considered the submissions of learned counsel for the parties and perused the record.
# 5. Learned counsel for the Appellant at the onset submitted that Appellant does not contend that provisions of Electricity Act shall override the IBC and the said view taken by the Adjudicating Authority is not being contested.
# 6. In Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, Regulation 29 provides for mutual credits and setoff. Regulation 29 is as follows:
“29. Mutual credits and set-off.
Where there are mutual dealings between the corporate debtor and another party, the sums due from one party shall be set off against the sums due from the other to arrive at the net amount payable to the corporate debtor or to the other party.”
# 7. The claim form which was filed by the Appellant as Annexure A-3 is as follows:
“SCHEDULE II
FORM C
PROOF OF CLAIM BY OPERATIONAL CREDITORS EXCEPT WORKMEN AND EMPLOYEES
(Under Regulation 17 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016)
24-12-2021
To
The Liquidator
Sh Sandeep Goel Insolvency Professional
Regd. Office-410, Pratap Bhawan 5, Bahadur Shah
Zafar marg. New Delhi-110002
Regd E-mail-cmasandeepgoel@gmail.com
From
Anil Kumar Verma
Executive Engineer
Electricity urban Distribution Division III
Pvval Muzaffarnagar-251001
E-mail-eeeudd3mzn@gmail.com
Subject: Submission of proof of claim in respect of the liquidation of MS Chaudhary Ingot Pvt Ltd. Meerut Road Muzaffarnagar under the Insolvency and Bankruptcy Code, 2016.
Madam/Sir,
Anil Kumar Verma hereby submits this proof of claim in respect of the liquidation of MS Chaudhary Ingots Pvt Ltd. Meerut Road Muzaffarnagar. The details for the same are set out below:
*PAN, Passport, AADHAAR Card or the identity card issued by the Election Commission of India.
# 8. When we look into Clause 8 of the Claim Form, in the claim itself the security amount was adjusted i.e. said amount was set off. The Adjudicating Authority in Para 27 of the judgment has referred to judgment of Hon’ble Supreme Court in Bharti Airtel Ltd. and Another vs. Vijaykumar V. Iyer and Others, which was a case of the CIRP. However, the judgment which has been extracted in Para 27 itself indicate that set off of account on mutual dealing is permitted under Regulation 29. It is submitted that the Adjudicating Authority has erred in observing that the amount set off by PVVNL against anticipated claim cannot be permitted. The present is not a case of anticipated claim but the claim filed by the Appellant is with adjustment of security claim. The view of the Adjudicating Authority that there could not have been set off/ adjustment of the claim by the Appellant cannot be approved. We, thus, are of the view that direction of the Adjudicating Authority to pay Rs.1,15,33,600/- could not be sustained. The Appeal is partly allowed to the above extent.
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