2020 (12) TMI 284 - AT - Insolvency and Bankruptcy

Fresh claim after the approval of Resolution Plan - appeals suffered rejection of their claims during Corporate Insolvency Resolution Process - only grievance projected on behalf of the Appellants is that the delay was occasioned due to financial crisis on account of non-payment of money by the Appellants to their lenders - HELD THAT - The Appellants have failed to adhere to the timelines prescribed under the I B Code and the relevant Regulations as regards filing of claims. With reference to Page 65 of appeal paper book in Company Appeal (AT) (Insolvency) No. 1021 of 2020, it appears that the IRP has rejected the claim of Appellant which was not substantiated by documentary evidence. This was done on 21st May, 2019. Page 66 of the same appeal paper book is the copy of order passed by the Adjudicating Authority extending CIRP period by 90 days. This happened on 11th September, 2019. Subsequently, the prayer of Appellant seeking direction from the Adjudicating Authority in the name of Resolution Professional to accept the supporting document in support of the claim came to be turned down in the face of delay and latches on the part of Appellant. The fact that the CIRP period was extended by 90 days by the Adjudicating Authority at the instance of Resolution Professional would not clothe the Appellants with a right to claim consideration of their claims which stage admittedly was over. Moreover, subsequent rejection of I.As declining to allow proof to be adduced in support of claims at the hugely belated stage leaves no room for contending that opportunity of submitting the claims and adducing proof in support thereof was not provided to the Appellants. Since the CIRP has crossed the culminating point with approval of the Resolution Plan of Shri Dutt India Pvt. Ltd. , the Appellants cannot be allowed to reopen the CIRP and direct de novo exercise after the CIRP period has come to an end. Appeal dismissed.

Summary

Issues: Delay in re-filing appeals, rejection of claims during Corporate Insolvency Resolution Process, non-adherence to timelines for filing claims, rejection of supporting documents, extension of CIRP period, denial of consideration for claims after CIRP approval

In this judgment by the National Company Law Appellate Tribunal, the delay in re-filing the appeals was condoned, and the Order delivered by the Adjudicating Authority approving the Resolution Plan of 'Shri Dutt India Pvt. Ltd.' in the Corporate Insolvency Resolution Process of 'New Phaltan Sugar Works Limited' was challenged in three appeals. The Resolution Plan had received unanimous approval from the Committee of Creditors with 100% voting. The Appellants in all three appeals had their claims rejected during the Corporate Insolvency Resolution Process. The Tribunal decided to pass a common order for all three appeals.

The Appellants contended that the delay in filing their claims was due to a financial crisis caused by non-payment of money to their lenders and other reasons, such as criminal cases filed against them. They argued that they were victimized by the Directors of the Corporate Debtor. The Appellants requested the consideration of their claims before the approval of the Resolution Plan, but their requests were not entertained. The Tribunal noted that the Appellants failed to adhere to the timelines prescribed under the Insolvency and Bankruptcy Code and relevant Regulations for filing claims. The rejection of the Appellants' claims was upheld as they did not provide sufficient documentary evidence to substantiate their claims within the stipulated timelines.

The Tribunal emphasized that the Appellants had enough opportunity to submit their claims and supporting documents during the Corporate Insolvency Resolution Process but failed to do so within the prescribed period. The extension of the CIRP period did not entitle the Appellants to belatedly submit their claims. As the CIRP had culminated with the approval of the Resolution Plan, the Appellants could not reopen the process for a fresh consideration of their claims. Consequently, the appeals were dismissed at the initial stage due to the lack of merit.