Verification of claims [Section 39] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Verification of claims [ Section 39 ] Once the claims are submitted, the next step is verification of the claims by the liquidator. The liquidator shall verify the claims submitted within thirty days of the last date for receipt of claims and may either admit or reject the claim, in whole or in part (regulation 30). Time limit for submission of claim [ Section 39(1) ] The liquidator shall verify the claims submitted within 30 days from the last date for receipt of claims. Documentary Evidence for submission of claim [ Section 39(2) Read with regulation 23 of IBBI (Liquidation Process), Regulation, 2016 ] The liquidator may require any creditor or the corporate debtor or any other person to produce any other document or evidence which he thinks necessary for the purpose of verifying the whole or any part of the claim. Cost of Proof [ Regulation 24 IBBI (Liquidation Process) Regulation, 2016 ] A claimant shall bear the cost of proving its claim. Costs incurred by the liquidator for verification and determination of a claim shall form part of liquidation cost. Provided that if a claim or part of the claim is found to be false, the liquidator shall endeavor to recover the costs incurred for verification and determination of claim from such claimant, and shall provide the details of the claimant to the Board. Determination of quantum of claim [ Regulation 25 IBBI (Liquidation Process), Regulation, 2016 ] Where the amount claimed by a claimant is not precise due to any contingency or any other reason, the liquidator shall make the best estimate of the amount of the claim based on the information available with him. Debt in foreign currency [ Regulation 26 IBBI (Liquidation Process), Regulation, 2016 ] The claims denominated in foreign currency shall be valued in Indian currency at the official exchange rate as on the liquidation commencement date. The official exchange rate is the reference rate published by the Reserve Bank of India or derived from such reference rates. Periodical payments [ Regulation 27 IBBI (Liquidation Process), Regulation, 2016 ] In the case of rent, interest and such other payments of a periodical nature, a person may claim only for any amounts due and unpaid up to the liquidation commencement date. Debt payable at future time [ Regulation 28 IBBI (Liquidation Process), Regulation, 2016 ] A person may prove for a claim whose payment was not yet due on the liquidation commencement date and is entitled to distribution in the same manner as any other stakeholder. [ Sub- regulation (1) ] Subject to any contract to the contrary, where a stakeholder has proved for a claim under regulation 28(1), and the debt has not fallen due before distribution, he is entitled to distribution of the admitted claim reduced as follows- X/ (1+r)n where- (a) X is the value of the admitted claim; (b) r is the closing yield rate (%) of government securities of the maturity of n on the date of distribution as published by the Reserve Bank of India; and (c) n is the period beginning with the date of distribution and ending with the date on which the payment of the debt would otherwise be due, expressed in years and months in a decimalized form. [ sub- regulation (2) ] Mutual credits and set-off [ Regulation 29 IBBI (Liquidation Process), Regulation, 2016 ] Where there are mutual dealings between the corporate debtor and another party, the sums due from one party shall be set off against the sums due from the other to arrive at the net amount payable to the corporate debtor or to the other party. Illustration: X owes ₹ 100 to the corporate debtor. The corporate debtor owes ₹ 70 to X. After set off, ₹ 30 is payable by X to the corporate debtor.