Verification and Determination of Claims by the IRP/RP
The Insolvency and Bankruptcy Code (IBC), 2016, mandates a structured process for resolving corporate insolvency. A crucial step in this process is the verification and determination of claims submitted by creditors. This module delves into the roles and responsibilities of the Interim Resolution Professional (IRP) and Resolution Professional (RP) in this critical phase.
The Role of the IRP/RP in Claim Management
Upon appointment, the IRP/RP is tasked with managing the corporate debtor's affairs and initiating the claims process. This involves public announcements, inviting claims from all stakeholders, and meticulously examining each claim submitted. The IRP/RP acts as a neutral facilitator, ensuring fairness and transparency throughout the process.
Types of Claims and Their Verification
Claims can be broadly categorized into financial debts and operational debts. The verification process for each type has specific nuances.
| Claim Type | Key Verification Points | Common Documentation |
|---|---|---|
| Financial Debt | Existence of a financial liability, proof of disbursement, security interest (if any). | Loan agreements, debentures, guarantees, security creation documents, bank statements. |
| Operational Debt | Provision of goods or services, non-payment, existence of a debt arising from such provision. | Invoices, purchase orders, delivery challans, service agreements, correspondence. |
| Workman's Dues | Proof of employment, salary/wage arrears, statutory dues like provident fund and gratuity. | Employment contracts, salary slips, PF statements, gratuity fund records. |
The Committee of Creditors (CoC)
Once claims are verified and admitted, the IRP/RP constitutes the Committee of Creditors (CoC). The CoC comprises financial creditors and operational creditors whose claims have been admitted. The CoC plays a pivotal role in the resolution process, making key decisions regarding the corporate debtor's future.
Determination of Claims: Adjudication and Appeals
The IRP/RP's determination of claims is not always final. Disputed claims or rejected claims can be challenged before the Adjudicating Authority (National Company Law Tribunal - NCLT).
The IRP/RP must maintain meticulous records of all claim verifications and determinations, as these form the basis for any future adjudication or appeal.
The NCLT has the power to review the IRP/RP's decisions and pass orders regarding the admission or rejection of claims. This ensures a robust system of checks and balances in the insolvency resolution process.
Key Duties of the Resolution Professional
Beyond claim verification, the RP has several other critical duties during the Corporate Insolvency Resolution Process (CIRP):
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These duties include managing the corporate debtor's assets, obtaining necessary information, appointing professionals, and facilitating the resolution plan process. The RP must act with utmost integrity and diligence to achieve the objectives of the IBC.
Conclusion
The verification and determination of claims by the IRP/RP is a foundational step in the CIRP. A thorough and fair process ensures that all legitimate stakeholders are recognized, paving the way for a successful resolution or an orderly liquidation. The IRP/RP's role is central to the effectiveness and integrity of the IBC framework.
Learning Resources
The official legal text of the Insolvency and Bankruptcy Code, 2016, providing the foundational laws and regulations governing insolvency and bankruptcy in India.
Access to various regulations framed by IBBI, including those pertaining to the Corporate Insolvency Resolution Process (CIRP) and claim submission.
A repository of orders and judgments passed by the NCLT, offering insights into how claim disputes and RP decisions are adjudicated.
A discussion paper by IBBI that delves into the intricacies and potential improvements of the claims process under the IBC.
A blog post explaining the multifaceted role and responsibilities of a Resolution Professional during the CIRP, including claim management.
A practical guide for creditors on navigating the CIRP, with emphasis on understanding the claims process and their rights.
A video tutorial explaining the concepts of claims submission, verification, and the formation and function of the Committee of Creditors under the IBC. (Note: This is a placeholder URL, a real video would be linked here).
A comprehensive overview of the IBC, providing context for the claims verification and determination process within the broader insolvency framework.
An article detailing the specific sections and provisions of the IBC that govern the submission, verification, and determination of claims.
A general overview of the IBC, its objectives, and its key features, providing a broad understanding of the legal landscape.