2021 (4) TMI 622 - Tri - Insolvency and Bankruptcy

Seeking modification of list of stakeholders and incorporate claims filed by the financial stakeholders - Section 60(5) (c) read with Regulation 31(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT - We are not much convinced about the reasons for delay in filing the claim, as the clam is filed around 14 months after i.e. on 31.12.2020, when the last date of filing the claim was 19.10.2019. Moreover, the claimant is the same FC which had filed Application under Section 7 of IBC. The reason mentioned by the Liquidator i.e. due to Covid period lockdown, the liquidation process could not be completed is not convincing. The fact is that the Covid Pandemic Lockdown started on 23.03.2020 i.e. after six months of liquidation order passed and no claim is filed during that six months also. Liquidation is to be completed within one year. The Liquidator also could not clarify the reason for not filing the petition under Section 54 of IBC even after completion of one year when no claim is received even by 30.12.2020 and the CD under liquidation is having reportedly no realizable asset except cash and bank balance. The Liquidator is directed to call for the Stakeholders Consultation Committee meeting within 10 days from today with a view to ensuring the maximization / realisation of value of assets of the CD under liquidation and distribute the proceeds of the assets as per Section 53 of IBC - application disposed off.

Issues:
1. Modification of the list of stakeholders to incorporate claims filed by financial stakeholders after the last date of submission.
2. Consideration of claims filed by financial stakeholders after the stipulated deadline.
3. Justification for delay in filing claims during the COVID-19 lockdown period.
4. Compliance with liquidation process timelines and obligations.
5. Decision on accepting late claims in the interest of justice.
6. Directions for Stakeholders' Consultation Committee meeting and asset distribution.
7. Filing of application for dissolution under Section 54 of IBC.
8. Handling of unclaimed proceeds of liquidation or undistributed assets.

Analysis:

1. The Applicant Liquidator sought directions to modify the list of claims under Section 60(5) (c) read with Regulation 31(3) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 to include claims from financial stakeholders received after the submission deadline. The Liquidator received such claims post the deadline, leading to the present application.

2. The Liquidator received a claim from a financial stakeholder after the stipulated deadline for claim submission. Despite the late submission, the Liquidator provisionally admitted the claim to prevent injustice, as the provision's clarity on admitting late claims was uncertain under the liquidation process.

3. The Tribunal expressed skepticism regarding the delay in filing the claim, considering it was submitted around 14 months after the deadline. The claimant, a financial stakeholder, had also initiated proceedings under Section 7 of the IBC previously, raising concerns about the timing and motives behind the delayed claim submission.

4. The Tribunal scrutinized the Liquidator's justification citing the COVID-19 lockdown as a reason for incomplete liquidation processes. However, the Tribunal found this reasoning unconvincing, noting that the lockdown began six months after the liquidation order and no claims were filed during that period. The Liquidator's failure to file a petition under Section 54 of IBC post one year of liquidation completion further raised doubts.

5. Despite reservations, the Tribunal accepted the Liquidator's plea to consider the late claim in the interest of justice for all stakeholders, provided the claim was eligible and no further claims would be entertained. The Liquidator was directed to convene a Stakeholders' Consultation Committee meeting, distribute assets per Section 53 of IBC, and file an application for dissolution by a specified date.

6. The Tribunal emphasized the completion of the liquidation process within the stipulated timeline, instructing the Liquidator to handle unclaimed proceeds or undistributed assets appropriately. Any such remaining assets were to be transferred to the Companies Liquidation Account before the dissolution order.

7. The Tribunal disposed of the application with the outlined observations and directives, emphasizing the need for timely completion of the liquidation process and adherence to statutory obligations to safeguard stakeholders' interests and ensure a fair resolution.

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