2021 (7) TMI 1173 - Tri - Insolvency and Bankruptcy

Rejection of the claim in relation to the Operational Creditor - non admission of the claim in relation to the Financial Creditor - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is seen from the records that these operational creditors were supplying dairy products and sea foods and other food products to the Corporate Debtor for a long time and as such they are Operational Creditors in relation to the Corporate Debtor. However, it is seen from the written submissions made by the Resolution Professional that after the initiation of the CIRP, the RP has taken steps to keep the Corporate Debtor as a going concern and many of the Trade Creditors who are the Applicants herein have supplied materials during the CIRP period and have also received payments for supply of such materials during the CIRP period. Further, it should be noted that the timelines as envisaged under the Code mandates CIRP to be completed within a period of 330 days and also timelines have been fixed for submissions of the claim by the creditors. Also it must be noted that the RP cannot perpetually accept the claims from the Creditors till the end of the CIRP period as it would defeat the very purpose of the Code. The claim of the Applicants in their capacity as a Trade Creditors/Operational Creditor in respect of the Corporate Debtor cannot be condoned at this belated stage especially when the Resolution Plan is approved by the CoC and is pending before this Tribunal - Application dismissed.

Summary

Issues involved:
Applications filed by Trade Creditors/Operational Creditors seeking condonation of delay in submission of proof of claim and direction to admit their claims. Application filed by Financial Creditor seeking adjudication and admission of claim.

Analysis:
*Trade Creditors/Operational Creditors Applications:*
The Applications sought to condone delays in submitting proof of claim due to lack of awareness about Corporate Insolvency Resolution Process (CIRP) initiation and lockdown restrictions. The Applicants supplied products to the Corporate Debtor and claimed pending payments. The Resolution Professional (RP) argued that the Code mandates specific timelines for claim submissions and that accepting claims indefinitely would defeat the Code's purpose. The Tribunal noted that some Trade Creditors received payments during CIRP and emphasized the need for timely claim submissions. Referring to a Supreme Court judgment, the Tribunal dismissed the Applications, stating they couldn't be condoned at a late stage, especially with a pending Resolution Plan.

*Financial Creditor Application:*
The Financial Creditor claimed non-adjudication of their submitted claim by the RP. The Applicant alleged timely submission of the claim, but the RP disputed receiving it and highlighted the lack of follow-up actions by the Applicant. The RP argued that the Applicant's claim was submitted after the stipulated period, and allowing it now would disrupt the Resolution Plan process. Citing the Supreme Court's stance on post-approval claim admissions, the Tribunal dismissed the Financial Creditor's Application, stating it couldn't be accepted at a belated stage with a pending Resolution Plan.

In conclusion, all Applications were dismissed without costs due to late submissions and potential disruption to the Resolution Plan process.