Liquidator Can’t Reject A Rectified Claim For Being Time Barred: NCLT Mumbai
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that when a creditor submits a claim before Liquidator within stipulated timeline though not in proper Form, then the Liquidator cannot reject such creditor’s claim on the premise that rectified claim was submitted...
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that when a creditor submits a claim before Liquidator within stipulated timeline though not in proper Form, then the Liquidator cannot reject such creditor’s claim on the premise that rectified claim was submitted after due date. The re-submission of rectified claim is a mere technical formality.
Background Facts
EPC Constructions India Pvt. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) by the NCLT. Subsequently, the NCLT ordered Liquidation of the Corporate Debtor on 07.05.2021.
On 19.05.2021, the Liquidator made public announcement for submission of claims against the Corporate Debtor. The Liquidator addressed an email to the Assistant Commissioner CGST & Central Excise, Surat Commissionerate (“Applicant”) on 25.05.2021 requesting to submit claims on or before 17.06.2021 with supporting documents for verification.
On 11.06.2021, the Applicant submitted its claim in Form-B for Rs.612 Crores. The Liquidator rejected the claim for not being in appropriate form. Accordingly, the Applicant re-submitted the claim in Form-C along with the supporting documents. The Liquidator intimated the Applicant that the timeline for submission of the claim had lapsed. The Applicant filed an application under Section 42 of IBC before the NCLT seeking condonation of delay in lodging its claim with the Liquidator and praying admission of its claim.
NCLT Verdict
The Bench observed that the Applicant submitted the claim within the due date specified in the Public Announcement for submission, though not in the proper Form under IBC. Therefore, the Liquidator was aware of the Applicant’s claim and re-submission of claim was only a technical formality.
The Bench opined that the liquidation proceedings are yet to be completed and no prejudice would be caused if the claim of the Applicant is adjudicated and admitted.
“It is observed that the Applicant submitted the claim within the due date specified in the public announcement for submission, though not in the proper Form. Thus, the Liquidator was aware of the claim of the Applicant and re-submission of claim by the Applicant was only a technical formality. Thus, the reason for delay in resubmission of claim is self-explanatory and the decision relied upon by the Respondent is not applicable in this case. It is also observed that the liquidation proceedings are yet to be completed and no prejudice would be caused if the claim of the Applicant is adjudicated and admitted.”
The Bench directed the Liquidator to consider the claim of Applicant as rejection of the claim solely on the ground of delay had not been accepted in various cases.
Case Title: IDBI Bank Limited v EPC Constructions India Limited
Case No.: CP (IB) No. 1832/MB/C-II/2017
Counsel for Applicant: Adv. Maya Majumdar.
Counsel for Respondent: Adv. Shriraj Khambete.