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Referring to the Insolvency Resolution Professional who was not taking any action on the claims of the Applicant against the Corporate Debtor, the Mumbai bench of the National Company Law Tribunal has imposed a fine of Rs. 1 Lakh on him saying the Resolution Professional was abusing his dominant position.
The bench comprising members Bhasakara Pantula Mohan (Judicial) and Shyam Babu Gautam (Technical) said ‘’the resolution professional seems to have been sitting over the claim of the Applicant and this cannot be allowed under the Insolvency and Bankruptcy Code as it would defeat the objectives of the Code’’. They also said that ‘’the actions or inactions of the Resolution Professional of not taking decision with respect to the claims of the Applicant amounts to abuse of powers provided to him under the Code and also contrary to justice and public policy. This is nothing but abusing his dominant position.’’
In the present case, the Applicant was Amar Universal Pvt. Ltd. who filed a petition against SK Wheels Pvt. Ltd. (corporate debtor). The Applicant said that the Resolution professional did not admit his petition and also no reason was provided by the Resolution Professional for the same.
The facts of the case are that the corporate debtor was supposed to pay the License Fee for using the Applicant’s premises. The payment was agreed to be paid on or before 7th day of every calendar month. However, the debtor defaulted over the payment and civil suit was initiated by the Applicant after the debtor did not vacate his land even after the termination notice issued by the Applicant.
Subsequently, moratorium was declared for corporate debtor under section 14 of the Insolvency and Bankruptcy Code, 2016 and the case was not showing any progress. Following this the Applicant filed a petition before the Resolution Professional under Form-B under regulation 7 of the Insolvency and Bankruptcy Board of India, regulations 2016. The petition filed by the Applicant was challenged by the Resolution Professional saying that the same was pending for clarification. Also, the Applicant had not approached the Tribunal with clean hands.
The Tribunal, however, considering that the Applicant’s petition was filed for almost 4 months and no action was being taken against it by the resolution professional, ordered that the Applicant was entitled to receive his dues and also his land shall be vacated by the debtor as this was his right. The Tribunal also ordered a fine to be imposed on the resolution professional of Rs. 1 Lakh which shall be paid within a week of the date of this order.
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