2019 (7) TMI 1020 - Tri - Insolvency and Bankruptcy

Condonation of delay in filing claims before Resolution Professional - power of Tribunal to condone delay - Rule 11 of NCLT Rules, 2016 - Resolution Professional rejected the claim of the Applicant only on the ground the claim was not submitted within 90 days of the insolvency commencement date - HELD THAT - The Applicant stated reasons for non-submission of claims within time. The Applicant is not aware of submitting Form -C to the Resolution Professional. The CIRP of Corporate Debtor is still pending. The Applicant claiming that it will come under the ambit of Financial Creditor, even if the claim of the Applicant is accepted by the RP that does not affect the Corporate Insolvency Resolution Process. The Resolution Professional has not considered the claim of the Applicant simply on the ground that the claim was submitted beyond 90 days. The Resolution Professional has not decided the claim on merits whether the claim is to be admitted or to be rejected. The Resolution Professional has not gone into this question because he considered that the claim filed by the Applicant was beyond 90 day from the date of admission of the Petition it is an undisputed fac Applicant submitted claim beyond 90 days. However, Regulation 12(2) of IBBI (Insolvency Resolution Process for Corporate Persons Regulations, 2016 provides that claims by creditors to be filed within 90 days from the date of commencement of insolvency. This Application is filed seeking condonation of delay in submitting the claim before the Resolution Professional. I am satisfied with the reasons given for the delay. The CIRP is pending. Therefore, delay can be condoned but it is for the Resolution Professional to decide whether claim to be admitted or not - The delay in submitting the claim by Applicant/creditor is condoned and Resolution Professional to decide accordingly to law whether the claim submitted by the Applicant to be admitted or not. Application allowed.

Summary

Issues:
Delay in filing claim before Resolution Professional under Section 60(5) of the Code read with Rule 11 of NCLT Rules, 2016.

Analysis:
The Applicant sought condonation of delay in filing claims before the Resolution Professional under Section 60(5) of the Code read with Rule 11 of NCLT Rules, 2016. The Applicant had filed two Proofs of Claim in Form-C on February 4, 2019, within 124 days of the Insolvency Commencement Date. However, the Resolution Professional rejected the claims on the grounds that they were submitted beyond the 90-day limit specified in Regulation 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The Resolution Professional cited Regulation 12(2) which mandates creditors to submit claims within 90 days of the insolvency commencement date.

The key question before the tribunal was whether the delay in filing the claims could be condoned. The Applicant argued that the tribunal had the power to condone the delay under Rule 11 of NCLT Rules, 2016, and contended that the timeline prescribed under Regulation 12 was directory, not mandatory. The Applicant relied on a Supreme Court judgment to support this argument, emphasizing that certain timelines under the IBC were considered directory, not mandatory.

The tribunal considered the circumstances leading to the delay in filing the claims. It noted that the Applicant's delay was due to a lack of knowledge about submitting claims in Form-C to the Resolution Professional until informed via email on December 29, 2018. The tribunal found that the Applicant had valid reasons for the delay and that the Corporate Insolvency Resolution Process was still ongoing. It concluded that the delay could be condoned, leaving the Resolution Professional to decide on the admission of the claims based on merit.

In the final decision, the tribunal allowed the application, condoning the delay in submitting the claim and directing the Resolution Professional to decide on the claim's admission according to the law. The tribunal emphasized that condoning the delay would not impact the ongoing Corporate Insolvency Resolution Process, ensuring justice and due process in the proceedings.