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2021 (6) TMI 754 - AT - Insolvency and BankruptcyClaim filed by Operational Creditors belatedly, rejected - CIRP is now at the stage where the Resolution Plan has already been approved by the Committee of Creditors and the same has been filed before the Adjudicating Authority for approval - HELD THAT - The Nationwide lockdown was imposed on 25th March, 2020. When the period of 90 days expired on 17th March, 2020, if Regulation 12(2) read with Regulation 40C is kept in view, the Appellant cannot take advantage by claiming that because of the COVID-19 situation, the Appellant could not file the claim with the Resolution Professional. Submitting of the claim cannot be equated with filing of the application - It is admitted position that already Resolution Plan has been approved and perusal of the record shows that after much efforts the Resolution Professional could take the CIRP to the stage of approval of Resolution Plan. The reasons recorded by the Adjudicating Authority have substance and if at belated stage when the Resolution Applicants are already before the Committee of Creditors with their Resolution Plan(s) if new claims keep popping up and are entertained, the CIRP would be jeopardized and Resolution Process may become more difficult - keeping in view the object of the I B Code which is Resolution of the Corporate Debtor in time bound manner to maximize value, if such requests of applicants like Appellant are accepted the purpose of I B Code would be defeated. Appeal dismissed.
Issues:
Claim of Operational Creditor as 'Operational Creditor' against Corporate Debtor - Delay in filing claim - Rejection of claim by Resolution Professional - Request for condonation of delay due to COVID-19 lockdown - Interpretation of Regulations 12 and 40C of Insolvency & Bankruptcy Board of India Regulations - Adjudicating Authority's decision on claim acceptance - Compliance with time limits under Insolvency and Bankruptcy Code - Impact on Resolution Process and Committee of Creditors. Analysis: The judgment revolves around an Appeal filed by an Operational Creditor claiming dues from a Corporate Debtor undergoing Corporate Insolvency Resolution Process (CIRP). The Appellant cited delay in filing the claim due to lack of knowledge about CIRP initiation against the Corporate Debtor, exacerbated by COVID-19 lockdown. The Resolution Professional rejected the claim, prompting the Appellant to seek condonation of delay, which was denied by the Adjudicating Authority. The Appellant contended that the delay should have been condoned considering the exceptional circumstances, including the nationwide lockdown. However, the Resolution Professional argued that the claim was belated, and the Resolution Plan had already been approved by the Committee of Creditors, emphasizing the importance of timely resolution under the Insolvency & Bankruptcy Code. Regulation 12 of the Insolvency & Bankruptcy Board of India Regulations mandates the submission of claims within specified timelines, with provision for late submission under certain conditions. The Appellant relied on Regulation 40C, which addresses time-line exceptions due to the COVID-19 lockdown. The Adjudicating Authority, while acknowledging the Appellant's arguments, emphasized the mandatory nature of time limits in the Code and the potential disruption to the Resolution Process if belated claims were entertained. Citing judicial precedents, the Adjudicating Authority upheld the Resolution Professional's decision, emphasizing the need for strict adherence to statutory timelines to ensure an efficient resolution process. Rejecting the Appeal, the Authority highlighted the adverse impact of late claims on the Resolution Process and Committee of Creditors, ultimately prioritizing the timely resolution of the Corporate Debtor over individual claim considerations. In conclusion, the judgment underscores the significance of adhering to statutory timelines in insolvency proceedings, balancing the rights of creditors with the imperative of timely resolution. The decision highlights the overarching objective of the Insolvency & Bankruptcy Code to maximize value through efficient resolution processes, ultimately guiding against actions that may jeopardize the resolution objectives.
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