# In the matter of Mr Rajnish Jain Vs.  Anupam Tiwari and Ors. CA(AT)(Ins) no. 519 of 2020

> NCLAT judgment dated 2020-12-18. Citation: TCN-2020-NCLAT-00010. The case involves an appeal against an order dated 23rd January 2020 passed by the…

- **Court:** NCLAT
- **Order date:** 18 Dec 2020
- **Citation:** TCN-2020-NCLAT-00010
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/mr-rajnish-jain-vs-anupam-tiwari-and-ors-ca-6a97d7b6

## Summary

### Background

The case involves an appeal against an order dated 23rd January 2020 passed by the Adjudicating Authority/National Company Law Tribunal, Allahabad Bench, Allahabad, which rejected Company Application No. 142/ALD/2019 in Company Petition (IB) No. 422/ALD/2018. The appellant, Mr. Rajnish Jain, challenged the order, arguing that the Adjudicating Authority erred in holding M/s BVN Traders as a Financial Creditor based on the decision of the Committee of Creditors (CoC). The core issue revolves around whether BVN Traders should be classified as a Financial Creditor or an Operational Creditor, and whether the Resolution Professional (RP) could reclassify BVN Traders' status based on expert opinion after the initial classification and the Adjudicating Authority's order.

## Facts

1. Mr. Rajnish Jain, the promoter, stakeholder, and Managing Director of the suspended Board of Directors, filed an application challenging the classification of BVN Traders as a Financial Creditor.
2. The Adjudicating Authority passed an order on 23rd January 2020, declaring BVN Traders as a Financial Creditor.
3. The Resolution Professional (RP) initially recognized BVN Traders' claim as a Financial Creditor but later sought advice from two professionals and changed his view without informing the Committee of Creditors (CoC).
4. The CoC, in its fourth meeting on 30th August 2019, passed a resolution to treat BVN Traders as a Financial Creditor.
5. The CoC, in its seventh meeting on 14th February 2020, discussed the RP's proposed resolution not to consider BVN Traders as

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## Issues and analysis

### Issue 1: Whether the Committee of Creditors constituted under Section 21 of the I&B Code, 2016, could …

**Ratio:** The Committee of Creditors (CoC) does not have the power to adjudicate whether a creditor

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**Reasoning:** The tribunal reasoned that the determination of whether a person or entity is a

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**Interpretation:** Section 21 of the I&B Code outlines the composition and functions of the

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**Application:** In this case, the CoC's decision to eliminate BVN Traders from the list of

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## Parties

- **Judges:** A.I.S. C…; V. P. S…
- **Appellants:** Mr Rajnis…
- **Respondents:** Jain Mfg (India)…; Manoj Kumar…

## Timeline

- **2019-02-22 — Admission o…**: CP (IB) No.422/ALD/2018 filed by Operational Creditor Mr Vikas Tiwari was admitted in…
- **2019-02-24 — Public Annou…**: IRP (Respondent No.1) made…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(7) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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