Section 40 of the Insolvency and Bankruptcy Code, 2016 mandates the Liquidator to communicate his reasons for admission or rejection of claim within 7 days of such admission or rejection of claims.
Under Regulation 30 of The Insolvency and Bankruptcy Board of India (Liquidation Process Regulation, 2016) the Liquidator is duty-bound to verify the claim submitted, within 30 days from the last date of receipt of the claims. He may either admit or reject the claim, in whole or in part, as the case may be but cannot simply sit on it. The Appellate Authority found in the case that the Liquidator has failed to admit or reject the claim even after receiving the claim in time. Section 40 of the Insolvency and Bankruptcy Code, 2016 mandates the Liquidator to communicate his reasons for admission or rejection of claim within 7 days of such admission or rejection of claims. The liquidation process is a time-bound process.
In the instant case, the Liquidator failed to adhere to his duties of accepting or rejecting the Appellant's claim as per given in schedule provided under the Code. Liquidator states that the records pertaining to the claims are not fully available with him. He has not the first-hand information of the transaction. He is in the process of obtaining details of the transactions from Respondent No. 3. It will not be permissible for the Liquidator to state that he does not have the record. He has a duty to obtain informations from IRP/RP, and the IRP/RP would be duty-bound to give requisite informations to the Liquidator and on failure, the Liquidator will file report before the Adjudicating Authority and will have to refer the matter to IBBI.