2021 (11) TMI 611 - AT - Insolvency and Bankruptcy

Rejection of Appellant s Statement of Claim - claim submitted belatedly delay of 52 days - HELD THAT - Indisputably, in the present case on hand, Corporate Insolvency Resolution Process (CIRP) in respect of the Corporate Debtor was initiated by the Adjudicating Authority as per the order dated 29.10.2019. At the behest of M/s Sri Visveswaraya Co-operative Bank Ltd. the Public Announcement was made on 20.11.2019 by inviting claims of the Creditors of the Corporate Debtor in requisite form and the last date being 04.12.2019. In reality, the estimated date of closure of CIRP was mentioned as 26.04.2020. An extension of time was also granted by the Adjudicating Authority and inasmuch as, the suitable Resolution Plan was not received, the Corporate Debtor was placed under liquidation process on 12.12.2020. Unfortunately, the Appellant/Applicant had submitted its claim only on 04.03.2021 and to come out with the reason that the Appellant/Applicant was not aware of the CIRP and Liquidation Process of the Corporate Debtor are unworthy of acceptance and in the considered opinion of this Tribunal, the said reason was rightly rejected by the Adjudicating Authority , which requires no interference in the hands of this Appellate Tribunal . Appeal dismissed.

Summary

Issues:
- Appeal against the Impugned Order dated 5th April, 2021 in CP(IB) No. 320/BB/2019
- Condonation of delay of 52 days for submission of claim before the Adjudicating Authority
- Dismissal of I.A. No. 106 of 2021 seeking to set aside the rejection of the Appellant's Statement of Claim
- Interpretation of Section 42 of the Insolvency & Bankruptcy Code, 2016
- Consideration of Regulation 16 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016

Analysis:

1. The Appellant filed Company Appeal against the Impugned Order dated 5th April, 2021, in CP(IB) No. 320/BB/2019, dissatisfied with the rejection of its Statement of Claim by the Adjudicating Authority. The Appellant sought to set aside the rejection based on a delay of 52 days in submission.

2. The Appellant contended that the delay in submitting the claim was due to being unaware of the Corporate Insolvency Resolution Process (CIRP) and Liquidation of the Corporate Debtor. The Appellant requested condonation of the delay and directions for processing its claim in the liquidation proceeding.

3. The Adjudicating Authority had initiated Liquidation Proceedings against the Respondent Company and set a deadline for claim submission. The Appellant filed its claim belatedly on 4th March 2021, leading to the rejection by the Respondent.

4. The Appellant argued for a lenient view on condonation of delay, emphasizing the need for substantive justice. Reference was made to the N. Balakrishnan Vs. M. Krishnamurthy judgment of the Supreme Court regarding the Tribunal's discretion in such matters.

5. Section 42 of the Insolvency & Bankruptcy Code, 2016, allows creditors to appeal against the decision of the liquidator within a specified timeframe. The Appellant sought relief under this provision for the rejection of its claim.

6. The Adjudicating Authority's Impugned Order highlighted the reasons for rejecting the claim, emphasizing the importance of timely submission and adherence to the regulations. The Tribunal upheld the Authority's decision, citing the Appellant's lack of diligence and awareness of the proceedings.

7. Regulation 16 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, mandates timely submission of claims by stakeholders. The Appellant's failure to meet the deadline led to the rejection of its claim, as outlined in the Adjudicating Authority's decision.

8. Ultimately, the Tribunal dismissed the Company Appeal (AT)(CH) (Insolvency) No. 255 of 2021, upholding the Adjudicating Authority's decision to reject the Appellant's claim due to the belated submission and lack of valid reasons for condonation of the delay.