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The resolution process may be jeopardised if new claims pop-up
The matter of Harish Polymer Product v. George Samuel and Another, REED 2021 NCLAT Del 06564, was heard in the National Company Law Appellate Tribunal, New Delhi wherein Justice A.I.S. Cheema held that the reasons recorded by the Adjudicating Authority have substance and if at a later 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 a time-bound manner to maximize value, if such requests of applicants like Appellant are accepted the purpose of ‘I&B Code’ would be defeated. The Appellate Authority did not find any reason to interfere with the impugned order. The Court found no substance in the Appeal and therefore, declined to admit the Appeal.
This Appeal has been filed by the Appellant claiming that the Appellant is an ‘Operational Creditor’ who had to recover Rs.33,23,718/- from the Corporate Debtor- ‘Jason Dekor Private Limited’. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 19th December 2019. The Appellant has mentioned that the Interim Resolution Professional (IRP)/ Resolution Professional (RP) issued Public Notice and as per the Public Notice, the claims were invited from the public and the last date to submit claims was 7th January 2020. The Appellant claims that the Corporate Debtor is situated at Ahmedabad while the Appellant operates at Meerut in U.P and did not know about the CIRP initiated against the Corporate Debtor. When the Appellant decided to initiate action against the Corporate Debtor for non-payment of the dues and contacted Counsel, the Appellant got knowledge that there is already CIRP against the Corporate Debtor. The Learned Counsel states that coming to know this, the Appellant filed a claim in Form-B with the Resolution Professional sending the same by e-mail on 15th September 2020. It is stated that the Resolution Professional rejected the claim filed on 13th October 2020 on the ground of delay. Learned Counsel for the Appellant submits that due to the COVID-19 situation, there was a delay and the Appellant could not file the claim in time and delay was required to be condoned. The Appellant claims that in such a situation the Appellant filed I.A No. 763/2020 in CP (IB) No. 257/7/NCLT/AHM/2019. The Adjudicating Authority (National Company Law Tribunal, Ahmedabad) after hearing the parties have rejected the application.
The Learned Counsel for the Appellant is arguing that the Adjudicating Authority was required to see that the Appellant was situated at Meerut and did not have knowledge earlier and so the delay should have been condoned especially taking into consideration that COVID-19 had spread Nationwide and there was lockdown imposed due to COVID-19. The Learned Counsel submits that apart from the Appellant there was another Operational Creditor which was also the Company of the Appellant which had made a claim but he would not be pressing that claim as that is a small amount. It is stated that in the CIRP there were two other Operational Creditors whose claim was time-barred and then the 5th Claimant was only a person who had a small amount of claim of Rs.22,000/-. The Learned Counsel submits that considering these aspects the Adjudicating Authority should have let the Appellant file claim even if the same was filed belatedly. Counsel for the Resolution Professional submits that the claim filed was delayed. It is also stated that the 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. As per Regulation 12(2), the ninetieth day would be 17th March 2020 as the CIRP started on 19th December 2019. The Learned Counsel for the Appellant submits that as per the order of the Hon’ble Supreme Court dated 8th March 2021 in SMW (C) No. 3 of 2020, the Court had, for the purpose of computing the period of limitation for any suit, application or proceeding, excluded the period from 15th March 2020 till 14th March 2021. On this basis, the Learned Counsel states that the claim of the Appellant should have been accepted. The Appellant has also taken a stand that because of the lockdown the Appellant was unable to file the claim in time. 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 the filing of the application so as to rely on the judgment of the Hon’ble Supreme Court referred above. 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.
There was reasonable while recoding of the Adjudicating Authority regard has substance and if at a 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 a time-bound manner to maximize value, therefore if such requests of applicants like Appellant are accepted the purpose of ‘I&B Code’ would be defeated.