2022 (5) TMI 488 - Tri - Insolvency and Bankruptcy

Consideration of claims - seeking to include claims submitted by the Petitioner in Form C under Regulation 17 of the Insolvency and Bankruptcy Board of India (Liquidation Process), 2016, in the list of stakeholders for adjudication - HELD THAT - From a reading of the order of the Hon ble Supreme Court in IN RE COGNIZANCE FOR EXTENSION OF LIMITATION, it can be deciphered that even though there is a delay of 361 days in submitting the claim by the Appellant before the Liquidator, in view of the dictum laid down by the Hon ble Supreme Court of India, this delay may be condoned in respect of the claim made by the Appellant before the Liquidator. The Liquidator during arguments stated that in case the Adjudicating Authority condones the delay and direct the Liquidator to accept the claim, he is ready to accept the claim of the Appellant herein. The contention of the Liquidator that in case the claim of Appellant is admitted, they have priority over the Operational Creditor cannot be accepted, because the governmental claim cannot be neglected for the benefit of other stakeholders. Considering the Appellant being a governmental authority and in view of the judgment of the Hon ble Supreme Court, this Appeal is allowed and the Liquidator is directed to accept the claim made by the Appellant before him on 17.02.2022 and take appropriate decision on the claim of the Appellant, in accordance with the extant Rules and Regulations - application disposed off.

Summary

Issues:
1. Claim rejection by the Liquidator based on delay in submission.
2. Authority to condone delay in claim submission.
3. Priority of government dues over Operational Creditor's claim.

Issue 1: Claim rejection by the Liquidator based on delay in submission:
The case involves an appeal filed by the Assistant Commissioner of Central Taxes seeking the inclusion of their claims in the list of stakeholders for adjudication. The Liquidator rejected the claim due to a delay of 361 days in submission, citing limitations under Section 31 of the Insolvency and Bankruptcy Code. The Appellant argued that the delay was not intentional and referred to a Supreme Court decision extending the period of limitation. The Liquidator contended that only the Adjudicating Authority could condone such delays.

Issue 2: Authority to condone delay in claim submission:
The Liquidator argued that they lacked the authority to condone delays in claim submissions, as per the Supreme Court's decision. However, the Appellant relied on the same Supreme Court ruling to request the acceptance of their claim despite the delay. The Liquidator agreed to accept the claim if directed by the Adjudicating Authority, emphasizing the priority of government dues over other stakeholders.

Issue 3: Priority of government dues over Operational Creditor's claim:
The Liquidator highlighted that no assets were sold when the appeal was filed, but later assets were sold via e-auction. The total claim admitted was specified, and the Liquidator emphasized the priority of government dues over Operational Creditor claims as per the Insolvency and Bankruptcy Code. The Tribunal, considering the Appellant's status as a governmental authority and the Supreme Court's decision, directed the Liquidator to accept the Appellant's claim and make a decision in accordance with the rules and regulations.

This judgment emphasizes the importance of adhering to timelines in claim submissions, the authority to condone delays, and the priority of government dues in insolvency proceedings. The decision provides clarity on the acceptance of governmental claims and their impact on the hierarchy of creditor payments.