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TMI Blog2025 (2) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... vices particularly when the services had been accepted without any demur or objections. Acceptance of belated claim of the Appellant by including interest - HELD THAT:- The Appellant for the first time claimed interest component on 25.06.2019 much after the date of supply of goods. All the correspondences exchanged before this date between the Appellant and Respondent show that no demand was made with regard to interest component. The claim for interest is an afterthought. Submission was pressed that reliance on invoices for interest is nothing but a unilateral document that has no binding effect on the Respondent. Having not added interest at the time of filing belated claim which claim stood already crystallised and admitted, the Appellant cannot suddenly spring a surprise by adding an interest amount as part of claims after a lapse of more than two years from the date of supply - The Adjudicating Authority was not satisfied that the claim of interest had been adequately substantiated and validated by the Appellant before the Liquidator at the time of liquidation commencement. Whether at the time of filing of their claims, any interest amount was claimed by the Appellant and ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ELD THAT:- The Liquidator has an important role to play in the timely conduct of the liquidation process and it is required of him to complete the process within one year from the date of commencement of liquidation proceedings. In the present case, we find that Liquidator has not committed any error in trying to complete the liquidation process on time which commenced way back in 2018. However, since the Appellant was unwilling to give their NOC, the progress of liquidation proceedings was facing a road-block on account of their non-responsive behaviour. Given the conspectus of facts, the Adjudicating Authority is agreed upon that seeking of NOC from the Appellant by the Liquidator in respect of the dues of suppliers of the sub-contractors was within the scope of his duties to protect the assets of the Corporate Debtor and do not find any cogent grounds which show that the Liquidator was found wanting in his conduct in expeditiously settling the ongoing liquidation of the Corporate Debtor. Conclusion - i) The claims must be filed within the prescribed timeline, and failure to do so results in the finality of the Liquidator's decision. ii) The interest claims must be substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate Debtor could be approved, the RP filed an application for approval of liquidation before the Adjudicating Authority on 12.03.2018. The liquidation order was approved by the Adjudicating Authority on 04.12.2018. The Liquidator issued Public Announcement on 06.12.2018 inviting claims with last date for submission fixed on 02.01.2019. On 21.01.2019, the Liquidator requested Appellant to file their claims by 28.01.2019. On 22.01.2019, the Appellant requested 14 days' time to file their claim. Extension sought by the Appellant was not allowed by the Liquidator. The Appellant also did not file any claim during the extended period of 14 days claimed by them. The Appellant, however, filed their claim before the Liquidator on 22.03.2019. The Liquidator rejected the claim on 30.03.2019 on the ground that the claim was submitted beyond two months from the last date fixed for submission of claim as per Public Announcement. On 25.06.2019, the Appellant issued a debit note to the Corporate Debtor for their three invoices of supply from 23-27 July 2017 which along with interest aggregated to an amount of USD 252,249.85. On 01.07.2019, the Appellant sent a Demand Notice for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everal reminders, the outstanding amount remained unpaid. When the Corporate Debtor went into liquidation, the Appellant issued a debit note for interest on the unpaid invoices. A Demand Notice was issued on 01.07.2019 for an amount of USD 252,249.85 including interest. 4. Contention was raised by the Appellant that since the invoices provided for interest clause for delayed payment and the invoices had been accepted by the Liquidator without objection, the Appellant was entitled to payment of the sum including interest on delayed payment as reflected in the invoice. In support of their contention, it was pointed out that this Tribunal in Prashant Agarwal Vs Vikash Parasrampuria & Anr in CA(AT)(Ins) No. 690 of 2022 has held that interest on delayed payment as specified in the invoice entitles the creditor to a right to payment under Section 3(6) of IBC. It was also mentioned that in Jatin Koticha Vs Industries Pvt. Ltd. (2007) SCC OnLine Bom 1092 the Hon'ble Bombay High Court had held that on the acceptance of goods along with invoice which contained interest amounts tantamount to acceptance of levy of interest even if the invoice was not signed by both parties. It was also conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the Appellant to confirm this amount to enable the Liquidator to deal with the claims made by the sub-contractor amounting to USD 129,492. It was also asserted that the liquidator could not have compelled the Appellant to provide NOC and withdraw its claim against the Corporate Debtor. This amounted to compelling the Appellant to withdraw their legitimate claims and interfere with the Appellant's rights to recover the full amount due. The Liquidator could not have unilaterally reduced the amounts outstanding claimed by the Appellant. The Liquidator had no jurisdiction to modify their admitted claim. The impugned order passed by the Adjudicating Authority denying the Appellant the sum arising out of the computation of interest on the outstanding amount as CIRP cost and deduction of the amount of Gujarat Marines and Dushyant Patel from the total outstanding liability was assailed by the Appellant. 7. Refuting the contentions of the Appellant, it was submitted by Mr. Ravi Raghunath, Ld. Counsel for Respondent that the IA No. 1795 of 2023 filed by the Appellant was not maintainable. After the Corporate Debtor went into liquidation on 04.12.2018, claims had been invited from stakeh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iralty Court directly for recovery of their dues. For the same set of supplies, two vendors could not have been paid since that would have resulted in duplication of claim. Hence from 30.09.2022 onwards, the Respondent had been repeatedly requesting the Appellant to consider issuing NOC to the dues of Gujarat Marines and Dushyant Patel so that their dues could be settled before the Admiralty Court. The Respondent had also agreed to pay the balance share of the Appellant's claim as per their invoices in terms of mechanism provided under IBC. It has been contended by the Respondent that the Appellant had objected to the Settlement Agreement before the Hon'ble Bombay High Court. However, the Hon'ble Bombay High Court refused to consider the objections raised by the Appellant. However, the Appellant continued to withhold the granting of NOC. This kept on delaying the liquidation proceedings. It was submitted that the intransigent and unreasonable behaviour of the Appellant adversely impacted the timely completion of the liquidation process. The Appellant were themselves responsible for causing the delay and therefore their demand for interest for delayed payment which was their own cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the date of supply. 13. When we look at the impugned order, we notice that the Adjudicating Authority has returned the finding that the claim for interest on the outstanding amount was not advanced at the time of filing of the claim on 23.03.2019 although the Applicant must have been conscious of the statement in the invoices issued by it, from time to time, about the levy of interest. The Adjudicating Authority was therefore not satisfied that the claim of interest had been adequately substantiated and validated by the Appellant before the Liquidator at the time of liquidation commencement. 14. Coming to our analysis and findings, we would like to observe that the Liquidator while dealing with claims of stakeholders has to exercise the powers and duties within the four corners of the IBC framework and the Liquidation Process Regulations. The salient regulations in this regard as outlined in the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, ('Regulations' in short) are as follows: 12. Public announcement by liquidator- (2) The public announcement shall- (a) call upon stakeholders to submit their claims or update their claims submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to interest payment on delayed payment is dated 25.06.2019 as placed at pages 115-117 of Appeal Paper Book ("APB" in short). This makes it clear that these tax invoices were raised much after the filing of claim before the Liquidator. Moreover, these tax invoices on interest payment are two years after the date of invoices which was 07.08.2017. We find the revised Order Confirmation placed at page 61-63 of APB which only mentions that payment is to be made 15 days from the date of supply but does not however indicate or specify any interest amount payable on delayed payment. The reliance placed by the Appellant on the judgment of this Tribunal in Prashant Agarwal supra that interest on delayed payment if specified in the invoice entitles the creditor to a right to payment does not come to the rescue of the Appellant since in this case the Appellant had themselves clearly failed to file their claim by including interest on account of delayed payment within the time line laid down in terms of Regulation 16 of Liquidation Process Regulations which delayed filing led to the rejection of the claim filed before the Liquidator. 17. Given this backdrop, we find credence in the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been challenged before the Adjudicating Authority under Section 42 of the IBC by the Appellant and not having done so, this claim had acquired finality. When Section 42 of the IBC provided a clear remedy to the Appellant which remedy has not been resorted to, the Appellant cannot now seek the same relief by invoking the provisions of 60(5) of the IBC. 21. The law is well settled that when a statute provides a particular remedy or that if a thing is to be done in a particular manner, then it has to be done in that manner only. Having failed to challenge the rejection of their claims within the 14 days timeline prescribed under Section 42 of the IBC, the Appellant has indirectly sought to revive their claim by filing a petition under Section 60(5) of the IBC. We find no reasons to disagree with the Adjudicating Authority that this issue cannot be re-agitated at this stage now by invoking Section 60(5) of the IBC. The Adjudicating Authority has therefore correctly held that there is merit in the submission of the Respondent that the Appellant was trying to circumvent the specific remedy under Section 42 of the IBC having failed to avail of it at the appropriate point of time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce with the provisions of IBC without delay. The Liquidator, to our minds, had acted fairly in informing the Appellant that he was agreeable to pay for the claims restricted to the Appellant's share as long as the Appellant gave their NOC in respect of the settlement arrived with the other subcontractors. Thus, the Liquidator clearly took due and ample care to protect the interests of the Appellant and at the same time avoided a scenario of duplication of claim for the same set of supplies. In such circumstances, the Appellant cannot be heard to say anything against the Liquidator of discriminatory treatment having been meted out to the Appellant. 26. Once the CIRP process is aborted and the liquidation process is triggered into motion, it is important for the Liquidator to ensure that minimal time is frittered away in liquidating the assets of the Corporate Debtor. Regulations 44(1) and 44(2) clearly makes liquidation a time bound process. At this stage, it may be useful and constructive to take notice of Regulation 44(1) and 44(2) as extracted hereunder: 44. Completion of liquidation-(1) The liquidator shall liquidate the corporate debtor within a period of one year from the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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