Court grants condonation of delay in filing claim under Section 42 of IBC.

The court allowed the application by the Operational Creditor for condonation of delay in filing a claim rejected by the Liquidator due to missing the deadline. Despite the time-barred claim, the court permitted the delay under Section 42 of IBC, citing precedents allowing creditors to seek relief for late submissions. The court emphasized the need to verify the claim's authenticity and directed the Liquidator to admit the Applicant's claim. Ultimately, the application was granted, and the order was issued accordingly.

---

---

Issues:
Delay in filing claim by Operational Creditor
Condonation of delay in filing claim
Applicability of Section 38 of IBC, 2016
Appeal against the decision of Liquidator
Relevant case laws and rules for condonation of delay

Analysis:
The judgment revolves around an application by an Operational Creditor seeking condonation of delay in filing a claim rejected by the Liquidator due to missing the prescribed deadline. The Liquidation process of the Corporate Debtor began on 12.04.2018. The Applicant's claim pertains to unpaid balance from supplying coal to the Corporate Debtor, totaling &8377; 13,25,898/-. The Liquidator refused to accept the claim citing late submission after the specified time limit for claims receipt, as per Section 38 of IBC, 2016, which mandates claim submission within 30 days of liquidation commencement.

The Applicant argued unawareness of the liquidation and public announcement for claim submission as reasons for the delay. Despite the correctness of the Liquidator's decision to reject the time-barred claim, Section 42 of IBC allows appeal to the Adjudicating Authority against such rejections within fourteen days. Reference was made to the UCO Bank V. Nicco Corporation Ltd. case where the court dealt with similar condonation issues under Rules 177 and 178 of Companies (Court) Rules, 1959, allowing creditors to apply for relief in case of failure to prove debts within specified timeframes.

Additionally, the judgment cited the T.R. Rajakumari v. Motion Picture Producers Combine Ltd. case, establishing that creditors can prove debts before final asset distribution but cannot disrupt paid dividends. Considering the ongoing liquidation proceedings and absence of prejudice from adjudicating the Applicant's claim, the delay was condoned in line with the Code's provisions. The Liquidator was directed to assess and admit the Applicant's claim after verifying its authenticity. Ultimately, the application was allowed, and the order was issued accordingly.

---