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2021 (3) TMI 1123 - AT - Insolvency and BankruptcyCIRP - Fresh claim of Sales Tax Dues after submission of Resolution plan for approval - Time limitation - Appellant / Revenue department has argued that the initiation of CIRP and the public notice inviting claims were not in his knowledge - Successful applicant sought permission to start working in accordance with the approved Resolution Plan to save the Corporate Debtor from further deterioration, which is presently a going concern - HELD THAT - In the present case the Operational Creditor - State Tax Department, Government of Maharashtra submitted its claim on 20.12.2019, more than about one year and one month after the invitation of claims through public notice on 2.11.2018. The extended time period for submission of claims with proof is ninety days from the date of initiation of the insolvency resolution process. This period also expired on 31.01.2019. It is undisputed that the RP had filed the Resolution Plan as approved by the Committee of Creditors to the Adjudicating Authority, much before the said claim was preferred before the RP, and the Adjudicating Authority was actively considering the Resolution Plan for necessary approval. After rejection of claim of Appellant by RP, its appeal was filed before the Adjudicating Authority on 21.02.2020 under Section 60(5) of the IBC. Thus, it is clear that much water had flown under the bridge from the date of issue of public notice (on 02.11.2018) and the extended time period of ninety days as provided under Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and the Resolution Plan as approved by the COC was submitted to the Adjudicating Authority for necessary approval under Section 30. Any interruption in the CIR Process at this stage by including a delayed claim/s would have meant setting the clock back and sending matter back to COC RP. It cannot be ruled out that if the claim of the Operational Creditor State Tax Department, Government of Maharashtra was accepted at such a late stage, there could have been other such applicants too, who would have demanded accommodation on the same ground allowing late submission of their claims once this window would have opened. It would be trite to emphasise the fact that this would have meant complete disruption of the CIRP and the timelines stipulated therein. Adjudicating Authority has dealt with the issue of approval of the resolution plan submitted by the Resolution Professional and, inter alia, rejecting the claim of the Appellant in accordance with the requirements of the statute, and in keeping with the overall objective and scheme of the IBC - Appeal dismissed.
Issues Involved:
1. Awareness and timing of the Appellant's claim. 2. Rejection of the Appellant's claim by the Resolution Professional. 3. Adjudicating Authority's dismissal of the Appellant's appeal. 4. Approval of the Resolution Plan by the Adjudicating Authority. 5. Applicability of cited case laws to the present case. Issue-wise Detailed Analysis: 1. Awareness and Timing of the Appellant's Claim: The Appellant claimed that he was unaware of the insolvency proceedings against the Corporate Debtor until he received a communication from the Joint Commissioner of State Tax. Upon learning of the proceedings, the Appellant filed a claim in Form B for ?5,62,29,528/- on 20.12.2019. This claim was rejected by the Resolution Professional on 31.12.2019 due to the delay in filing and the fact that the Resolution Plan had already been submitted for approval. 2. Rejection of the Appellant's Claim by the Resolution Professional: The Resolution Professional rejected the Appellant's claim on the grounds of delay and the submission of the Resolution Plan to the Adjudicating Authority. The Appellant argued that his statutory claim should have been considered despite the delay, citing Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which allows for the belated filing of claims. The Appellant also contended that the statutory dues were included in the Corporate Debtor's books of accounts and should have been considered in the Resolution Plan. 3. Adjudicating Authority's Dismissal of the Appellant's Appeal: The Appellant's appeal under Section 60(5) of the IBC was dismissed by the Adjudicating Authority on 17.3.2020. The Adjudicating Authority was already considering the Resolution Plan submitted by the Resolution Professional. The Tribunal noted that accepting late claims would disrupt the CIRP process, which is intended to be time-bound and result-oriented. The Tribunal emphasized that allowing late claims could lead to an indefinite extension of the CIRP, defeating the purpose of the IBC. 4. Approval of the Resolution Plan by the Adjudicating Authority: The Adjudicating Authority approved the Resolution Plan submitted by the Successful Resolution Applicant on 19.03.2020. The Tribunal highlighted that the CIRP is a time-bound process aimed at resolving the Corporate Debtor's insolvency. The successful Resolution Applicant should be allowed to implement the approved Resolution Plan to avoid further deterioration of the Corporate Debtor, which is a going concern. 5. Applicability of Cited Case Laws to the Present Case: The Appellant cited the case of State Bank of India v. ARGL Ltd. to support his arguments. However, the Tribunal found that this case was not relevant to the present matter as it related to the withdrawal of a successful resolution plan on different grounds. The Appellant also cited the cases of Committee of Creditors of Essar Steel v. Satish Kumar Gupta and K. Sashidhar v. Indian Overseas Bank and Ors. The Tribunal found that these cases did not support the Appellant's arguments, as they dealt with different aspects of the CIRP process. Conclusion: The Tribunal concluded that the Adjudicating Authority had acted in accordance with the provisions of the IBC and the overall objective of the CIRP. The rejection of the Appellant's claim and the approval of the Resolution Plan were found to be legally sound. Consequently, the appeal was dismissed with no order as to costs.
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