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Synopsis

The National Company Law Tribunal (NCLT) has recently refused to condone a delay of 1185 days for a delayed claim to be admitted with the Resolution Professional while observing that if the claim is allowed to be admitted, it would defeat the purpose of the Insolvency and Bankruptcy Code (IBC).

This observation was made by the NCLT Bench in Mumbai, referring to a National Company Law Appellate Tribunal (NCLAT) order in the case of Mukul Kumar v. RPS Infrastructure.

“…if new claims are entertained after approval of Resolution Plan by the CoC, the CIRP of the Corporate Debtor would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in timebound manner to maximize the value, if such request of such claimant is accepted, the purpose of IBC would be defeated” the order states.

The division bench, consisting of Judicial Member Kuldeep Kumar Kareer and Technical Member Anil Raj Kellan, was hearing an application to condone the delay of 1,185 days (i.e., 3 years and 90 days) in filing the proof of claim with the Resolution Professional to allow the claim amounting to Rs. 37,00,000 (Rupees Thirty-Seven Lakhs Only) plus interest.

The Corporate Insolvency Resolution Process (CIRP) was initiated on 3rd August 2021, and an Interim Resolution Professional (IRP) was appointed. The IRP issued a public announcement inviting claims, and the last date for the submission of claims was 7th December 2019.

A new Resolution Professional (RP) was appointed, who issued a public announcement for the initiation of Expression of Interest (EoI). The Committee of Creditors (CoC) on 2nd December 2021 approved a Resolution Plan, and the same was filed before the tribunal.

On 10th March 2023, the applicant filed his proof of claim for an outstanding sum of Rs. 37 lakhs plus interest towards the purchase of the shop. Under the agreement for sale, the shop was purchased for a consideration of Rs. 40,01,000. However, the resolution professional rejected the claim of the applicant on account of the delay.

The applicant submitted that he was unaware of the initiation of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, and he was not following up with the Corporate Debtor after the imposition of lockdown due to the COVID-19 pandemic.

Subsequently, he had to visit his native place for a medical emergency, and when he returned in January 2023, he came to know about the CIRP and immediately filed the claim with the resolution professional.

The Resolution Professional stated that the Resolution Plan submitted by Planet Builders and Developers was unanimously approved by the Members of the Committee of Creditors (CoC) in its 13th meeting held on 15th November 2021 and 19th November 2021. He added that the plan was pending before the tribunal for approval.

The tribunal found that the Resolution Professional (RP) has summarily rejected his claim of Rs. 40,01,000, but the applicant has prayed for a refund of only Rs. 37,00,000 plus interest.

Further, it also noted that the discrepancy is further worsened upon scrutiny; the amounts paid by cheque total to Rs. 20,00,000, and the amount paid in cash, as claimed by the applicant, is Rs. 22,01,000, thus the claim aggregating to Rs. 42,01,000.

Therefore, the tribunal rejected the application while noting that it was not a case where a belated claim could be allowed.

“There are certain cases and certain circumstances where the Adjudicating Authority and the Hon’ble Appellate Authorities have increased the timelines for admission of claims. We do not think this is one of such circumstances which warrants increase of timeline even at the risk of impacting the Resolution Plan pending approval before the Adjudicating Authority,” the order states.

For the Applicant : Adv. Dheeraj Patil a/w Milan A.

For the Respondent/RP : Counsel Nupur Shah i/b Adv. Amir