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TMI Blog2024 (10) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... On 10.02.2022, the RP also informed the Appellant of the CIRP initiation against the Corporate Debtor, a fact which has not been controverted by the Appellant - the Appellant cannot deny that he was unaware that the CIRP process had already commenced and that it was incumbent upon the Appellant to make due endeavours on their part to submit their claims. The RP had also not committed any error in making the Public Announcement in the newspapers. Regulation 6 of the CIRP Regulations only mandates pronouncement through newspapers and not through personal service and therefore the RP was not obligated to inform the Appellant through personal service. The RP in accordance with the CIRP Regulations had regularly uploaded from time to time the list of creditors of the Corporate Debtor both prior to submission of claim by the Appellant and even after the submission of claim. The status of their claims of the creditors was also put up on the websites of Corporate Debtor as well as the Insolvency and Bankruptcy Board of India (IBBI) portal on several occasions. From the material on record, it is clear that the list of creditors was uploaded five times on 23.02.2022, 14.04.2022, 06.05.2022, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Barun Mitra, Member ( Technical ) The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 ( IBC in short) by the Appellant arises out of the Order dated 13.03.2023 (hereinafter referred to as Impugned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad Bench-II) in I.A. No. 899/AHM/2022 in CP (IB) No. 232 (AHM) of 2018. By the impugned order, the Adjudicating Authority has approved the resolution plan of the Corporate Debtor. Since the resolution plan did not incorporate the claims of the Appellant, aggrieved by the said order, this appeal has been preferred. 2. Outlining the factual matrix, we find that the Corporate Debtor was admitted into Corporate Insolvency Resolution Process ( CIRP in short) by the Adjudicating Authority on 28.01.2022 following a Section 7 application filed by the Financial Creditor-IDBI Bank Limited. Thereafter, an Interim Resolution Professional was appointed who took steps to invite claims having made the requisite Public Announcement besides constituting the Committee of Creditor ( CoC in short). The IRP was confirmed as Resolution Professional ( RP in short). The 90 days period for filing of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Plan for the Corporate Debtor issued. 13. 14.06.2022 The office of the Appellant received an email from the RP seeking copies of orders for years 2018-19 to 2020-21 in respect of the claims. 14. 20.06.2022 List of creditors of the Corporate Debtor was uploaded by RP which indicated that the claim of the Appellant was rejected. 15. 27.07.2022 180 days of CIRP period expired. No challenge filed by Appellant on rejection of claim. 16. 04.08.2022 Updated list of creditors which showed claim of Appellant as rejected. 17. 15.10.2022 CoC approved the Resolution Plan by GAIL. 18. 20.10.2022 RP filed IA 899/22 before Adjudicating Authority for Plan approval. 19 30.10.2022 270 days of CIRP period expired. No challenge filed by Appellant on rejection of claim. 20. 09.11.2022 Adjudicating Authority issued notice in IA 899/22 upon the Appellant. 21. 02.02.2023 Hearing conducted by the Adjudicating Authority. Appellant was present and did not make any submissions including in relation to their claims. 22. 21.02.2023 Hearing conducted by Adjudicating Authority Appellant present and did not make any submissions including in relation to their claims. 23. 13.03.2023 Adjudicating Authority pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claims of the Appellant had been rejected without giving them an opportunity to present their case which amounted to violation of the principles of natural justice besides causing irreparable loss. It was further contended that the resolution plan was therefore liable to be rejected as it fell foul of Section 30(2) of the IBC. 6. Refuting the contentions put forth by the Appellant, the Ld. Senior Counsel for Respondent No.1-RP submitted that the Appellant has misrepresented that opportunity was denied to the Appellant in the matter of consideration of his claim by the RP and the Adjudicating Authority. It was pointed out that Appellant had been kept informed by the RP on 10.02.2022 regarding initiation of CIRP. Moreover, public announcement was issued as per IBBI (Corporate Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations in short) whereby claims were invited from the creditors of the Corporate Debtor. The RP had also complied with the prescriptions laid down under the CIRP Regulations for uploading the updated list of creditors with the status of their claims on the website of the Corporate Debtor and on the IBBI portal from time to time. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into CIRP. It was also pointed out that the Appellant being the Income Tax Department could not have filed its claim as a Secured Creditor since the Income Tax Act does not provide basis for the Income Tax Department to be treated as secured Operational Creditor. In support of their contention, reliance has been placed on the judgment of this Tribunal in the case of AVIL Menezes Vs Principal Chief Commissioner of Income Tax 2024 SCC OnLine NCLAT 856. 8. While reiterating the submissions made by the RP, the Ld. Sr. Counsel for Respondent No.2-IDBI made certain additional submissions. It was pointed out that the Appellant had not only submitted its claim beyond 90 days extended period, but had failed to provide reasons justifying the delay. It was also asserted that an order by the Adjudicating Authority approving a resolution plan can be challenged before the Appellate Authority only on the grounds specified under Section 61 of the IBC. However, no such grounds have been made out by the Appellant. 9. We have duly considered the arguments advanced by the Learned Counsel for both the parties and perused the records carefully. 10. The primary issue which arises for our consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fice, if any, of the corporate debtor and any other location where in the opinion of the interim resolution professional, the corporate debtor conducts material business operations; (ii) on the website, if any, of the corporate debtor; and (iii) on the website, if any, designated by the Board for the purpose, (c) provide the last date for submission of proofs of claim, which shall be fourteen days from the date of appointment of the interim resolution professional. 7. Claims by operational creditors. (1) A person claiming to be an operational creditor, other than workman or employee of the corporate debtor, shall submit claim with proof to the interim resolution professional in person, by post or by electronic means in Form B of the Schedule I Provided that such person may submit supplementary documents or clarifications in support of the claim before the constitution of the committee. 8. Claims by financial creditors. (1) A person claiming to be a financial creditor, other than a financial creditor belonging to a class of creditors, shall submit claim with proof to the interim resolution professional in electronic form in Form C of the Schedule I Provided that such person may subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing stakeholders in a nonpartisan manner. The RP is expected to assist in the CIRP process in a fair and objective manner in the best interest of all stakeholders. Section 18 of the IBC sets out the various duties of IRP in respect of handling claims. Section 18(1)(b) lays down that the IRP shall receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under Section 13 and 15 of the IBC. 13. To begin with our analysis and findings, we would like to examine whether the RP had adhered to the provisions of IBC and CIRP Regulations while receiving, collating and verifying the claims submitted to him by the Appellant. In the present case, we notice that after the Corporate Debtor was admitted into the rigours of CIRP on 28.01.2022, the Interim Resolution Professional made a Public Announcement on 04.02.2022, in compliance with Sections 13 and 15 of the IBC read with Regulation 6 of CIRP Regulations. The Public Announcement had set 16.02.2022 as the deadline for claim submissions. On 10.02.2022, the RP also informed the Appellant of the CIRP initiation against the Corporate Debtor, a fact which has not been controverted by the Appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fications since the RP was duty bound to verify the claims and call for additional evidence in substantiation of the claims submitted. Coming to the contention of the Appellant that the RP had given only 24 hours time to furnish the supporting documents we find that since the 90 days period for submission of claims had already expired and the RP is required to adhere to the prescribed time-lines laid down under the IBC, it was not unreasonable on his part to have provisioned a tight time-frame for response. Having filed their claim belatedly, the Appellant cannot blame the RP for having allowed a small window of time for filing supporting documents. IBC is a time bound process and the Appellant should have been vigilant in taking the right steps to file their claim in a timely manner. The Appellant has been clearly found wanting in this regard. To our minds, the Appellant had clearly failed to discharge their obligation to lodge claims within prescribed time period. 16. This brings us to the issue raised by the Appellant that they were kept in the dark by the RP that their claim had been rejected. When we look at the sequence of events, we notice that the RP in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght copies of relevant orders on 14.06.2022 to which allegedly it did not receive any response from the Appellant. Per contra, it is the contention of the Appellant that it was allowed extremely short period to respond and hence they had telephonically informed that it had already sent the supporting documents earlier on 13.05.2022. Needless to add, the RP is not expected to process and verify the claims of a creditor without supporting proof and to that extent cannot be held to have acted in an unwarranted manner. In fact, the Appellant was remiss that it did not follow up with the RP anytime thereafter seeking any update about the status of their claim or the CIRP process. 18. Be that as it may, we find that the RP had rejected the claim for want of documents. Thus, the next logical question that craves for answer is whether the RP ever agitated the issue of rejection of their claims. From the chronological sequence of events captured at Para 3 above, it is clear that even until 180 days of CIRP completion, no objections were raised by the Appellant regarding rejection of their claims. The same position continued even when the resolution plan came up for approval before the Adjud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent appeal raising objections to the resolution plan approval and that too not on grounds of contravention of Section 30(2) of the IBC but on grounds of rejection of its claim. Had they submitted their respective claims even within the extended time-frame of 90 days and the RP refused to collate their claim, only then the Appellant could have rightly contended that there had occurred some irregularity. In the instant case, the facts on record do not show that the RP had acted in contravention of the IBC in rejecting or stalling the filing of belated claims or that he did not show due diligence in performing his duty. Hence the objections of the Appellant to the approval of the resolution plan approval merely on the ground that their claims were rejected lacks merit. 21. It is the case of the Respondents that any interference with the plan at this stage by introducing new claims would prejudice the stakeholders and disrupt the successful resolution of the Corporate Debtor. It was also canvassed that any indulgence by way of belated admittance of claim is likely to jeopardise the CIRP since the resolution plan is already under implementation. It was also asserted that if claims of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution Applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution Applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution Applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, the NCLAT judgment must also be set aside on this count . 23. It has also been clearly held by the Hon ble Supreme Court of India in M/s RP Infrastructure Ltd. vs Mukul Kumar Anr. in Civil Appeal No. 5590 of 2021 that even after the resolution plan is approved by the CoC and is pending before the Adjudicating Authority, new claims cannot be foisted upon the resolution applicant. The relevant excerpts of the judgement reads as under: 21. The mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process. This would result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such belated claims would lead to a situation where the SRA is made to face the uncertainty of undecided claims. If new claims are entertained after the resolution plan is approved by the Adjudicating Authority, the plan would be jeopardised and this would set the clock back on the CIRP process which would militate against the intent and object of the IBC. We are therefore of the considered view that when the plan has already been approved by both the CoC and the Adjudicating Authority, it cannot be reopened now on the basis of claims being belatedly agitated by the Appellant who for no justifiable reasons had clearly dropped the guard of being vigilant in pursuing his claims within the time-lines laid down by IBC. 26. Coming to the contention of the Appellant that the RP had misrepresented before the Adjudicating Authority that none of the Government Authorities including the Appellant had claimed any security or charge over any assets of the Corporate Debtor nor had they filed their claims as a Secured Creditor, we find the records show otherwise. We find that the Appellant on their own volition had filed their claim in Form-B which is meant for Operational Creditors. Even if we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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