2022 (3) TMI 1110 - AT - Insolvency and Bankruptcy

Rejection of Claim by Liquidator due to delay in filing of the same - HELD THAT - It is not in dispute that the last date for submission of the Claims was 28.08.2020 which was specified in the Public Announcement by Liquidation in compliance with Section 38 of the Code read with Regulation 12 of the Liquidation Process Regulations, 2016. Regulation 12(2)(b) provides that the last date for submission or updation of claims, shall be 30 days from the liquidation commencement date . In the instant case, admittedly the Appellant had preferred their claim on 31.10.2020, after a delay of 64 days. It is the case of the Appellant that the delay was on account of the pandemic situation during which period the Appellant being a Senior Citizen could not contact his counsel and collate the data, apart from not having knowledge of the Liquidation Proceedings. This Tribunal is of the earnest view that the delay in filing the Claim before the Liquidator be condoned as this Tribunal is satisfied that the cause ascribed is reasonable and construes sufficient cause . Without delving into the merits of the Claim, this Tribunal is of the considered opinion that the Appellant be given an opportunity to present his Claim before the Liquidator within a week from the date of this Order - Appeal allowed. Rejection of Claim of liquidator due to delay in filing of the same - HELD THAT - The Adjudicating Authority has rejected the prayer on the ground that the Appellant has filed the Appeal against the decision of the Liquidator with a delay of 42 days. Having regard to the reasons cited in Company Appeal (AT) (Insolvency) No. 34 of 2022 and in the Affidavit filed before the Adjudicating Authority, this Tribunal is satisfied that the grounds raised construe sufficient cause , to condone the delay in filing of the Appeal before the Adjudicating Authority - this is a fit case to grant an opportunity to the Appellant herein to file their Claim before the Liquidator within a week from today and the Liquidator shall decide the Admission/Rejection of the Claim on merits, within a week from receipt of the Claim, in accordance with Law. Appeal allowed.

Issues:
1. Challenge to the impugned order dismissing the Appeal against the decision of the Liquidator.
2. Delay in filing the claim by the Appellant.
3. Appellant's submissions regarding the delay.
4. Respondent's arguments against condoning the delay.
5. Legal provisions and judgments cited by both parties.
6. Tribunal's assessment and decision to allow the Appeal.

Issue 1: Challenge to the impugned order
The Company Appeal was filed against the order of the Adjudicating Authority dismissing the Appeal preferred by the Appellant against the decision of the Liquidator rejecting the Claim due to a delay in filing. The Adjudicating Authority observed that the Appeal was filed beyond the time provided by the Insolvency and Bankruptcy Code, 2016.

Issue 2: Delay in filing the claim
The Appellant filed the Claim after the specified last date, citing reasons such as the pandemic situation, inability to contact counsel, and lack of knowledge about the Liquidation Proceedings. The Liquidator rejected the Claim due to the delay in submission.

Issue 3: Appellant's submissions regarding the delay
The Appellant contended that they were unaware of the Liquidation Proceedings, faced difficulties due to the pandemic, and relied on Supreme Court orders regarding limitation periods during the specified period. The Appellant argued that they had shown sufficient cause for the delay.

Issue 4: Respondent's arguments against condoning the delay
The Respondent argued that the Appellant, being related to a Suspended Director of the Corporate Debtor, had knowledge of the ongoing proceedings and deliberately delayed filing the Claim. The Respondent emphasized the fixed timelines under the Code and cited legal provisions and judgments to support their stance.

Issue 5: Legal provisions and judgments cited by both parties
Both parties cited relevant legal provisions such as Section 42 of the Insolvency and Bankruptcy Code, 2016, and judgments like Ramlal v. Rewa Coalfields Ltd to support their arguments regarding the delay in filing the Claim and the applicability of the Supreme Court's orders on limitation periods.

Issue 6: Tribunal's assessment and decision
The Tribunal acknowledged the pandemic situation and the Supreme Court's directions on limitation periods. Considering the circumstances and the reasons provided by the Appellant, the Tribunal found sufficient cause to condone the delay in filing the Claim. The Tribunal allowed the Appeal, directing the Appellant to file the Claim before the Liquidator within a week for further assessment, emphasizing that no observations were made on the merits of the Claim.

In a similar case (CA(AT)(Ins) No.46/2022), the Tribunal also allowed the Appeal, granting the Appellant an opportunity to file the Claim before the Liquidator within a week for a decision on Admission/Rejection, in line with the law.

The Tribunal set aside the impugned order and provided detailed directions for further proceedings, emphasizing the importance of compliance with legal timelines and the need to consider exceptional circumstances such as the pandemic.

← Previous Next →