That Section 3(19) of IBC 2016 defines "Insolvency Professional" and Section 5(27) defines "resolution professional" to include and Resolution Professional (RP) and Interim Resolution Professional(IRP) as the case may be, "5(27) "resolution professional", for the purposes of this Part, means an insolvency professional appointed to conduct the corporate insolvency resolution process 1 [or the prepackaged insolvency resolution process, as the case may be,] and includes an Interim Resolution Professional."

1. NOTE ON CLAIM VERIFICATION
PROCESS BY IRP UNDER IBC
1. That Section 3(19) of IBC 2016 defines “Insolvency Professional” and Section 5(27) defines
“resolution professional” to include and Resolution Professional (RP) and Interim Resolution
Professional(IRP) as the case may be,
“5(27) “resolution professional”, for the purposes of this Part, means an insolvency professional
appointed to conduct the corporate insolvency resolution process 1 [or the prepackaged
insolvency resolution process, as the case may be,] and includes an Interim Resolution
Professional; “
2. Interim Resolution Professional is responsible to receive, collating and verifying claims.
Section 18 (1) (b) of the Code provides:
“The interim resolution professional shall perform the following duties, namely: -
(b) receive and collate all the claims submitted by creditors to him, pursuant to the public
announcement made under sections 13 and 15;”
Regulation 13 (1) of the CIRP Regulations provides:
“13. Verification of claims.
(1) The interim resolution professional or the resolution professional, as the case may
be, shall verify every claim, as on the insolvency commencement date, within seven
days from the last date of the receipt of the claims, and thereupon maintain a list of
creditors containing names of creditors along with the amount claimed by them, the
amount of their claims admitted and the security interest, if any, in respect of such
claims, and update it.”
(IBBI Circular dated 3rd January 2018 directs that the IP shall not outsource any of his
duties.)
Note: S. 38 and s. 39 of the code lays down consolidation and verification of claims as done by
the Liquidator.

2. 3. The Hon’ble Apex Court in the matter of Committee of Creditors of Essar Steel India
Limited Through Authorised Signatory Vs. Satish Kumar Gupta & Ors. remarked on the
Regulation 13 and stated as under:
“...Thereafter, under Regulation 13, the resolution professional shall verify each claim as on the
insolvency commencement date, and thereupon maintain a list of creditor containing the names
of creditors along with the amounts claimed by them, the amounts admitted by him, and the
security interest, if any, in respect of such claims, and constantly update the aforesaid list – see
Regulation 13(1)....”
TIMELINE:-
4. The Insolvency Resolution Professional/Liquidator shall make a public announcement
allowing the claimants to file their claims against the corporate debtor. The time frame allowed
to file a claim to a resolution professional is within 14 days from the date of his appointment.
5. The Interim Resolution Professional as per Regulation 13(1) of the IBBI (Insolvency
Resolution Process for Corporate Persons) Regulation, 2016, has to verify the claims within 7
days and prepare the list of Creditors and submit it to a report certifying the constitution of the
Committee of Creditors to the Adjudicating Authority. The IRP has to conduct the first meeting
of COC within 30 days from the date of commencement of CIRP.
IMPRECISE DEBT/COST:-
6. The creditor submitting the claim will be responsible for the cost of proving the debt. If the
Creditor's Claim is not precise, the IRP/RP, in accordance with CIRP Regulation 14, of the IBBI
(Insolvency Resolution Process for Corporate Persons) Regulation, 2016, will make the best
estimate of the claims’ value based on the information submitted. If the Creditor provides any
further information, the IRP/RP is empowered to modify the claim later.
FOREIGN CURRENCY:-
7. If the claim is denominated in foreign currency, then as per Regulation 15 of the IBBI
(Insolvency Resolution Process for Corporate Persons) Regulation, 2016, the claims
denominated in foreign currency shall be valued in Indian currency at the Official exchange rate
as on the date of the Insolvency commencement date. The same is the position in the case of
liquidation.
PENAL INTEREST:-
8. If there is an element of Penal interest in the claim, in such case the penal interest can form
part of the claim admitted, but no interest is chargeable thereafter.
This was held by the Hon’ble Supreme Court in the case of Central Bank of India Vs
Ravindra and Ors.

3. COST FOR UNPROVEN CLAIM:-
9. If an incorrect claim is submitted, its cost of verification and cost of determination will be
recovered from the applicant.
STANDARD OPERATING PROCEDURE:-
10. One of the most important functions of an Insolvency Professional is
substantiation/verification of claims of creditors.
The following steps must be taken during the process of substantiation of claims of creditors in
CIRP for effective substantiation/verification of claims of creditors:
I. All claims received must be listed immediately on their receipt and all documents received
must be digitized.
ii. Categorize and list all claims as:-
● Financial Creditors
● Operational Creditors
● Other Creditor
iii. Claimants under each category be sub-categorized i.e. the financial creditor can be
subcategorized as:-
● Banks
● NBFC’s
● Asset reconstruction Companies
● Term lending Institutions i.e. IDBI, UPFC etc.
● Debenture holders etc. etc.
Forms for each category are as follows:

4. iv. Prepare a note sheet for each claim/creditor, recording therein the scrutiny/verification of the
documents submitted by the claimant, observations & decision of the IRP / IP in this regard.
v.Prepare & update the category wise list of creditors with the following columns.( For own
records)
● S.No.
● Date of receipt of the claim
● Name of the Claimant.
● Amount Claimed
● Date of Scrutiny / Verification
● Amount of claim substantiated
● Secured / Unsecured
● Remarks
vi. Digitize the note sheets & list of creditors.
vii. Prepare a list of creditors as per CIRP - Regulation no 13 [specifying therein (a) name of
creditor (b) amount claimed (c) claims admitted (d)security interest ] & make available the same
for inspection to the stakeholders, displayed on the website of CD if any, filed with AA &
presented at the first meeting of CoC.

5. viii. After the receipt of the valuation report, RP to recast the list of creditors in terms of Section
53 (1) read with section 30(4) of the code, incorporating the value of security interest, as
discussed in the next sheet, to facilitate the CoC to approve the resolution plan, which may take
into account the order of priority amongst creditors as laid down in sub-section (1) of section 53,
including the priority and value of the security interest of a secured creditor.
POWER:-
11. As per section 18 of the code the duty of the IRP is to collate the claims. The word collates
means, collect, and compare carefully in order to verify and arrange in order. So the power of
IRP is administrative but not adjudicatory. IRP may reject the claim, if it is submitted after
the stipulated time, or submitted without sufficient proof of claim, then in such a case, the
creditor can apply to the Adjudicating Authority/Tribunal under section 60 (5) of the Code.
There is no separate section or application for applying to the Adjudicating Authority/Tribunal.
DISPUTED CLAIMS:-
12. The jurisdiction of the adjudicating authority has been interpreted to exclude the
determination of the value of a disputed claim, this role has been given to courts outside the
CIRP framework. In SSMP Industries Ltd. v. Perkan Food Processors Pvt. Ltd., it was held
that since the proceedings before the adjudicating authority are summary in nature, the
adjudication of the disputed claim for the determination of the value of the claim must continue
in arbitration. Where it is not possible for the adjudicating authority to decide a claim on the
basis of disputed facts, it will have to be decided by “a court of competent jurisdiction.”
13. It has also been explicitly clarified in the Swiss Ribbons case that the RP doesn't have quasi-
judicial power, but merely has administrative powers. While referring to Regulation 13,
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate
Persons) Regulations, 2016 the court stated:
“It is clear from a reading of these Regulations that the resolution professional is given
administrative as opposed to quasi-judicial powers.
14. This position has been expanded and repeated in Navneet Kumar Gupta v. Bharat Heavy
Electricals Limited, where it has been held that the resolution professional cannot reject a claim
without taking the evidence which substantiates the claim into account.
2. ‘Resolution Professional’ wrongly disallowed the substantial claim in its entirety and directed
the ‘Resolution Professional’ to re-examine the claim on the basis of the accounts and evidence
of BHEL and if the evidence corroborated the claim, the same should also be taken into account
while finalising the total claim of BHEL.
4. The only question that arises for consideration in this appeal is whether the ‘Resolution
Professional’ has jurisdiction to reject the claim of BHEL in its entirety, without going into the
evidence.

6. 88. As opposed to this, the liquidator, in liquidation proceedings under the Code, has to
consolidate and verify the claims, and either admit or reject such claims under Sections 38 to 40
of the Code.
Sections 41 and 42, by way of contrast between the powers of the liquidator and that of the
resolution professional, are set out hereinbelow:
“41. Determination of valuation of claims.— The liquidator shall determine the value of claims
admitted under Section 40 in such manner as may be specified by the Board.
42. Appeal against the decision of liquidator.—A creditor may appeal to the Adjudicating
Authority against the decision of the liquidator accepting or rejecting the claims within fourteen
days of the receipt of such decision.”
15. In ICICI Bank Limited v. Anuj Jain where the NCLT upheld the determination made by
the resolution professional. Further, if the creditor is aggrieved by the determination made by the
resolution professional, he may challenge the decision by approaching the adjudicating
authority.