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2021 (10) TMI 815 - Tri - Insolvency and BankruptcySeeking to condone the delay of 18 days in preferring the Appeal - Section 42 of IBC, 2016 - HELD THAT - 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 - Filing of the claim with the Liquidator during the Liquidation process within the time period stipulated thereunder is a mandatory requirement under the IBC, 2016 and also it must be noted here that the mere entry of debt in the books of accounts of the Corporate Debtor is also not evidential enough for the claims to be admitted and considered by the Liquidator. The Liquidation is a time bound process and the Liquidator is being made accountable and required to explain, if there is any delay caused in the liquidation process - 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. 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, the application stands dismissed.
Issues:
Delay in filing appeal under Section 42 of IBC, 2016 against the order of the Liquidator. Detailed Analysis: 1. The Application (IA/326/2020) sought to condone an 18-day delay in filing the Appeal under Section 42 of IBC, 2016 against the Liquidator's order. The main Application (IA/496/IB/2020) was filed by M/s. Laxmi Engineering Works aggrieved against the Liquidator's order. The Corporate Insolvency Resolution Process (CIRP) was initiated in 2017, and the Applicant submitted a claim during CIRP. However, the Applicant failed to file a claim during the Liquidation process. The Liquidator admitted a part of the claim but rejected a subsequent claim due to delay. 2. The Liquidator's rejection was based on the delay in submitting the claim, which was almost one and a half years after the liquidation process commenced. The Liquidator stated that without the Tribunal's permission, the list of stakeholders could not be altered. The Applicant, an Operational Creditor, failed to adhere to the mandatory requirement of filing claims during the Liquidation process. 3. The IBC mandates Claimants to submit claims to the Liquidator in a specified form and manner, with supporting documents. The Liquidator must verify claims within the specified time limits, either admitting or rejecting them. The Liquidator's decision must be communicated to the creditors and the Corporate Debtor promptly. Section 42 of IBC provides a 14-day window to appeal the Liquidator's decision. 4. Workmen and employees' claims are required to be admitted based on the Corporate Debtor's books of accounts. However, no such relaxation is granted to Operational Creditors. Filing claims during the Liquidation process within the stipulated time is mandatory. The mere entry of debt in the Corporate Debtor's books is not sufficient evidence for claim admission. 5. The IBC treats CIRP and Liquidation as separate stages, requiring separate claim filings. The Applicant failed to provide sufficient reasons for the delay in filing the claim before the Liquidator. The Liquidation process is time-bound, and the Liquidator must explain any delays after one year. 6. Citing a Supreme Court case, the Tribunal dismissed the Application, emphasizing the time-bound nature of the IBC and the Liquidator's obligation to complete the liquidation process within a year. The Application was dismissed without costs due to the lack of equity about limitation in the IBC's time-bound process.
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