South Assam Roadways Limited vs Ram Ratan Modi

ORDER

a. An Order be passed setting aside the email dated 16^th March 2021 issued by the respondent, i.e., the resolution professional rejecting the claim of the applicant;

b. An Order be passed directing the respondent i.e., the resolution professional to admit the claim of the applicant as made in the proof of claim and take necessary steps in accordance with law;

c. Such further and/or other Orders, as this Learned Tribunal deems fit and proper.

In this matter, when you submitted your claim of Rs. 29,78,815/- (Rupees Twenty-Nine Lakh Seventy-Eight Thousand Eight Hundred and Fifteen Only) (Rs. 14,24,613/-Principal and Rs. 15,54,202/- Interest) along with all the annexures, then the RP verified your claim from the Books of Accounts of the Corporate Debtor and it was earlier informed you that your dues of Rs. 2,59,020/- (Rupees Two Lakh Fifty-Nine Thousand and Twenty Only) is reflecting in the books which is already admitted by the RP. Further, the RP also confirmed your claim amount from the accountant of the Corporate Debtor, but he is unable to provide any further information in respect of your claim. So in that case, the RP is unable to admit you claimed amount.

It is to inform you that there are no provisions available in the Code to provide the interest to the Operational Creditor, if the interest component is absent from the agreement.

The NCLT Kolkata Bench held in ‘Electro Poles Product Pvt. Ltd. vs. APE Power Pvt. Ltd.”, that the Corporate Debtor does not contain a liability to pay interest for delayed payment, if the interest clause does not contain in the Tax Invoice or Agreement of the Operational Creditor. The Supreme Court held in Mobilox Innovations Private Ltd. vs. Kirusa Software Private that the obligation for the Corporate Debtor to pay interest is not “Spurious, Hypothetical or Illusory”. It is pertinent to mention herein that M/s. South Assam Roadways Limited does not have the agreement which contains the interst on the delayed payment, then the Undersigned is not liable to provide the interest.

Proof of claim by South Assam Roadways Ltd.

Section 238 – Provisions of this Code to override other laws –

The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law.

According to Section 238, the Code shall prevail over any other provision or law contrary or inconsisent with any of its provisions. The Supreme Court in Innoventive Industries Ltd. v. ICICI Bank held that “............ precisely for this reason that the non-obstante clause, in the widest terms possible, is contained in Section 238 of the Code, so that any right of the corporate debtor under any other law cannot come in the way of the Code”.

The Insolvency Law Committee Report of March 2018 reflects on the legislative intent behind the enactment of the Code. It reads “the introduction of this legislation was done with the aim of replacing the existing framework for insolvency which was visibly inadequate, ineffective and wrought with delays”.

In the recent case of Duncans Industries Ltd. v. A. J. Agrochem, wherein the Supreme Court held on 04.10.2019, that the provisions of the Code would prevail over the Tea Act, 1953. Further, it is a settled point of law that in case of an inconsistency arising between two special legislations, the latter enacted legislation will have an overriding effect on the previously enacted legislation “Solidaire India Ltld. v. Fairgrowth Financial Services Ltd., (2001) 3 SCC 71”. This rule read with the non-obstinate clause enshrined under Section 238, makes it clear that the Code shall prevail over the Tea Act.

Further, in Swiss Ribbons Pvt. Ltd. v. Union of India, the Supreme Court, while discussing the scheme of the Act has clearly held “Unless such reorganization is effected in a time bound manner, the value of the assets of such persons would deplete. Therefore, maximization of value of assets of such persons so that they are effectively run as going concerns is another very important objective of the Code”.

It concludes that the Insolvency and Bankruptcy Code, 2016, prevails over any other provisions or statue contrary or inconsistent with any of its provisions.