2021 (4) TMI 943 - Tri - Insolvency and Bankruptcy

Condonation of delay of 725 days in submitting the Claim in Form C to the Respondent - HELD THAT - It is pertinent to note here that the Scheme in relation to the Corporate Debtor viz. NOCL which has been proposed under Section 230 of the Companies Act, 2013 read with the attendant provisions of Insolvency and Bankruptcy Code, 2016 was approved by this Tribunal. However, it is seen that as per the provisions of the IBC, 2016, the Applicant is required to submit the claim to the Liquidator in such form and in such manner along with such supporting documents as specified by the Board. Thereafter, upon submission of the claim, the Liquidator is required to verify the claims within the time limits specified by the Board and in this connection referring to the relevant Regulations namely, IBBI (Liquidation Process) Regulations, 2016 and more specifically under Regulation 30, the Liquidator is required to verify the claim submitted within a period of 30 days from the last date of receipt of the claims and may either admit or reject in whole or part as the case may be of such claim - As against the rejection of the claim, Section 42 of I B Code, 2016 provides for a time window of 14 days upon receipt of such decision to the creditor to file an appeal to the Adjudicating Authority against the said decision of the Liquidator. The Hon'ble Supreme Court in Gaurav Hargovindbhai Dave Vs. Asset Reconstruction Company (I) Ltd. Another 2019 (9) TMI 1019 - SUPREME COURT , in relation to the aspect of limitation has restated the well established and well settled principle that there is no equity about limitation , we are unable to entertain this Application/Appeal. In view of the IBC, 2016 being a time bound process as well as the Learned Liquidator being under a compulsion to complete the liquidation process within a period of one year from the date of commencement of liquidation. Application dismissed.

Summary

Issues:
Delay in submitting claim to Liquidator, rejection of claim by Liquidator, power of Liquidator to condone delay, time-bound nature of Liquidation process, requirement of filing claim at each stage, limitation period for claims.

Analysis:
1. The Application filed sought to condone a delay of 725 days in submitting a claim to the Liquidator, requesting admission of a claim amounting to ?20,41,035. The Applicant supplied steel to the Corporate Debtor and claimed interest for delayed payment.

2. The Corporate Insolvency Resolution Process was initiated earlier, and the Applicant had filed a claim with the Resolution Professional. However, the Liquidator rejected the claim due to the delay in submission, citing lack of authority to condone such delays.

3. The Liquidator contended that the delay was unjustified, emphasizing the time-bound nature of the process. The Liquidator argued that allowing endless consideration of claims would undermine the Insolvency and Bankruptcy Code's provisions.

4. The Liquidator highlighted that the claim appeared time-barred, lacking evidence of acknowledgment of liability from the Corporate Debtor. The Liquidator stressed the mandatory requirement of filing claims and differentiated treatment for workmen/employees' claims.

5. The Tribunal noted the Liquidator's obligation to verify claims promptly and communicate decisions to creditors and the Corporate Debtor. The Applicant's failure to submit the claim during the Liquidation proceedings was also noted.

6. Referring to the National Company Law Appellate Tribunal's decision, the Tribunal emphasized the time-bound nature of the liquidation process. It highlighted the Liquidator's responsibility to conclude proceedings within a year and dismissed the Application due to the process's time constraints.

7. The Tribunal underscored the importance of adhering to the approved scheme and avoiding 'undecided' claims post-approval. Citing Supreme Court judgments, the Tribunal emphasized the non-negotiable nature of limitation periods in insolvency proceedings.

8. Ultimately, the Tribunal dismissed the Application, considering the time-bound nature of the Insolvency and Bankruptcy Code and the Liquidator's obligation to complete the liquidation process within a year. The dismissal was without costs, aligning with the strict timelines mandated by the Code.