2021 (11) TMI 788 - Tri - Insolvency and Bankruptcy

Liquidation of Corporate Debtor - Section 33 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - A bare perusal of the provision shows that if a person is aggrieved by the order of the liquidator, then the aggrieved person/Creditor may file an appeal within 14 days of the receipt of the such decision. Admittedly, as per the averments made in the memo of appeal, the liquidator has communicated the rejection of the claim to the appellant vide email dated 09.08.2019, whereas this appeal is filed on 18th February, 2021, much after the order of rejection that was communicated to the appellant by the liquidator. It is noticed that this application was filed on 28/08/2019, whereas the order of the Liquidator was communicated to him on 09/08/2019. Admittedly, the first application was also filed beyond 14 days, as required under Section 42 of the IBC, 2016 - we are unable to accept the contention of the applicant that due to lockdown, the applicant could not file the appeal within time. The first application filed under Section 60 (5) of the IBC, 2016 was filed after the 14 days of the prescribed period of the limitation and this application has also been filed much after the withdrawal of that application - the appeal is barred by limitation and on this ground alone, it is liable to be dismissed. Appeal dismissed.

Summary

Issues:
Appeal against rejection of claim by the Liquidator under Section 42 of IBC, 2016. Appeal filed beyond the prescribed time limit of 14 days. Impact of Covid-19 lockdown on the filing of the appeal.

Analysis:
The appeal was filed against the rejection of the Applicant's claim by the Liquidator. The Liquidator communicated the rejection via email dated 09.08.2019. The Applicant, a Financial Creditor, had submitted its claim of ?3,04,10,000/- along with supporting documents within the specified timeline. The Liquidator requested additional documents and raised queries, to which the Applicant responded promptly. However, the Liquidator later stated that the relevant documents were not submitted, leading to the rejection of the claim. The Applicant had previously filed an application under Section 60(5) IBC, which was withdrawn due to a technical error and lockdown restrictions, preventing timely refiling. The Applicant argued that the claim was valid, supported by filed documents and financial statements, reflecting the unpaid debt by the Corporate Debtor.

The Tribunal considered the provisions of Section 42 of the IBC, 2016, which allows creditors to appeal the liquidator's decision within 14 days. The rejection email was dated 09.08.2019, and the appeal was filed on 18th February 2021, well beyond the prescribed time limit. The Applicant cited Covid-19 as a reason for the delay, but the Tribunal noted that the initial application under Section 60(5) was also filed late, even before the lockdown. The subsequent withdrawal and refiling post-lockdown did not excuse the delay, as the limitation period had already lapsed. Consequently, the Tribunal found the appeal time-barred and dismissed it on this ground alone, emphasizing the importance of adhering to statutory timelines in such matters.

In conclusion, the Tribunal dismissed the appeal as it was barred by limitation, highlighting the significance of complying with the statutory timeline for filing appeals under Section 42 of the IBC, 2016. The impact of Covid-19 and lockdown restrictions did not justify the delay in filing the appeal, especially considering the history of late filings by the Applicant. The judgment underscores the strict adherence to procedural requirements in insolvency proceedings to maintain the integrity and efficiency of the resolution process.