Case Note & Summary
The appeal was filed by Ashish Arjunkumar Rathi, the erstwhile Resolution Professional of Goyal Energy and Steel Private Limited, under Section 61 of the Insolvency and Bankruptcy Code, 2016, challenging an order from the National Company Law Tribunal, Cuttack Bench. The Appellant was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional during the Corporate Insolvency Resolution Process (CIRP). After the CIRP, a Resolution Plan from Nakshatra Asset Ventures Limited was approved by the Committee of Creditors. However, a discrepancy was noted in Form - H regarding the claim amount of Chhattisgarh State Power Distribution Company Limited, which was a clerical error. The Appellant argued that this error did not affect the admitted claim or the resolution process. The Tribunal found that the Adjudicating Authority had unjustly characterized the error as gross dereliction, despite acknowledging that no prejudice was caused. The Appellant contended that he was not given an opportunity to explain the error, violating principles of natural justice. The Tribunal agreed that the error was minor and did not warrant adverse remarks. Ultimately, the Tribunal expunged the adverse observations and allowed the appeal, maintaining that the remaining parts of the Impugned Order would stay unaffected.
Headnote
A) Insolvency Law - Clerical Error - Nature of Error - Insolvency and Bankruptcy Code, 2016, Sections 30(6), 31 - The discrepancy in Form - H was identified as a bona fide clerical error that did not affect the CIRP or prejudice any stakeholder. The court held that such an error should not be characterized as gross dereliction, especially in the absence of any misconduct or prejudice (Paras 9-12).
Issue of Consideration
Whether the adverse observations made against the Appellant regarding a clerical error constituted gross dereliction of duty.
Final Decision
The Tribunal allowed the appeal, expunging the adverse remarks regarding gross dereliction and maintaining that the discrepancy was a clerical error that did not affect the CIRP or cause prejudice.
Law Points
- Insolvency and Bankruptcy
- Corporate Insolvency Resolution Process
- Clerical Error
- Natural Justice
- Adverse Remarks
