2021 (1) TMI 387 - Tri - Insolvency and Bankruptcy

Recovery of Arrears by Invocation of Bank Guarantee - non-repair of transformers, which were under warrantee - additional cost incurred due to non-supply of transformers as per work order - HELD THAT - Admittedly, out of total claim of ₹ 26,63,344/-, the Liquidator has accepted ₹ 12,13,371/- i.e. for non-repair of transformers, which were under warrantee, as the same is legitimate claim of the Applicant, subject to the approval of Adjudicating Authority - As regard the claim of ₹ 14,49,973/- is claimed against non-supply of transformers as per work order, which is already recovered by invocation of Bank Guarantee, however, the Applicant is further claiming additional cost, which is incurred by DGVCL due to non-supply of transformers as per work order. It is also admitted by the Applicant that he has already invoked the Bank Guarantee for ₹ 27,58,498/- for non-supply of transformers, therefore, another amount i.e. ₹ 14,49,973/- is unreasonable as the same is recovered from Bank Guarantee. The instant application is not maintainable and stands dismissed.

Summary

Issues:
- Delay in submitting claim before the Liquidator
- Acceptance of claim by the Liquidator
- Rejection of claim by the Liquidator
- Legal provisions under IB Code for creditor claims
- Interpretation of relevant case law

Delay in submitting claim before the Liquidator:
The Applicant filed an application under section 42 of the IB Code, 2016, seeking to condone the delay in submitting its claim before the Liquidator. The Applicant claimed that they were unaware of the deadline for filing claims due to lack of knowledge about the Public Announcements. The Liquidator contended that the claim was submitted almost a year after the stipulated deadline of 11.07.2019, as per Section 38 of the IB Code.

Acceptance of claim by the Liquidator:
The Liquidator accepted a part of the Applicant's claim amounting to &8377; 12,13,371 for non-repair of transformers under warranty. This acceptance was subject to the approval of the Adjudicating Authority. However, the Liquidator rejected the claim of &8377; 14,49,973 against non-supply of transformers as it was already recovered through the invocation of a Bank Guarantee.

Rejection of claim by the Liquidator:
The Liquidator rejected the part of the claim related to the additional cost incurred by DGVCL due to non-supply of transformers as per the work order. The Liquidator found that the amount of &8377; 14,49,973 was unreasonable as it had already been recovered through the Bank Guarantee of &8377; 27,58,498. Therefore, the claim was deemed unreasonable and rejected.

Legal provisions under IB Code for creditor claims:
The Applicant relied on Section 42 of the IB Code for recourse against the Liquidator's decision to reject the claim on grounds of delay. Additionally, the Applicant referred to Rules 177 and 178 of the Companies Court (Rules) 1959, highlighting the provision for creditors failing to prove their claim within the stipulated time to approach the Court for consideration of their claim.

Interpretation of relevant case law:
The Applicant cited a judgment of the Hon'ble Madras High Court in T.R. Rajkumar v. Motion Picture Producers Combine Ltd., emphasizing that a creditor could prove its debt at any time before the final distribution of assets but could not disturb any dividend already paid. This case law was used to support the Applicant's argument regarding the timing of claim submission and the creditor's rights in the insolvency process.

In conclusion, the Tribunal dismissed the Applicant's application, ruling that the claim for additional cost incurred by DGVCL due to non-supply of transformers was unreasonable and already recovered through the Bank Guarantee. The delay in submitting the claim after the stipulated deadline was also a key factor in the rejection of the claim.