Tribunal rules against late claim submission disrupting insolvency process; emphasizes adherence to timeline

The Tribunal dismissed the application seeking a copy of the Resolution Plan, admission of the applicant's claim, and consideration of a revised plan. The Tribunal found that the claim was submitted well beyond the stipulated time, which would disrupt the Corporate Insolvency Resolution Process (CIRP) timeline and potentially lead to the failure of the Resolution Plan. Emphasizing the importance of adhering to the CIRP timeline to achieve the objectives of the Insolvency and Bankruptcy Code, the Tribunal ruled against the applicant.

---

---

Issues Involved:
1. Request for a copy of the Resolution Plan.
2. Admission of the applicant's entire claim.
3. Rejection of the existing Resolution Plan and consideration of a revised plan.

Issue-wise Detailed Analysis:

1. Request for a Copy of the Resolution Plan:
The applicant, M/s Concept Infracon Private Limited, sought a direction to the Resolution Professional (RP) to provide a copy of the Resolution Plan. The applicant argued that, under Section 24(3)(c) of the Insolvency and Bankruptcy Code (IBC), Operational Creditors have the right to participate in the Committee of Creditors (CoC) meetings and receive a copy of the Resolution Plan. The applicant cited the Supreme Court's decision in 'Vijay Kumar Jain versus Standard Chartered Bank and Others' to support this claim.

2. Admission of the Applicant's Entire Claim:
The applicant sought the admission of their entire claim amounting to Rs. 1,19,33,688/-. The applicant contended that the corporate debtor had defaulted on payments despite the applicant providing services satisfactorily. The applicant submitted proof of claim on March 20, 2020, and sent multiple reminders, but the RP did not respond until November 13, 2020. The applicant argued that the RP breached Regulation 13 and Regulation 14 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, and the duties under the IBBI (Insolvency Professionals) Regulations, 2016.

3. Rejection of the Existing Resolution Plan and Consideration of a Revised Plan:
The applicant requested the rejection of the existing Resolution Plan filed under Section 31 of the IBC and sought a direction for the RP to put a revised plan before the CoC after incorporating the applicant's claim. The applicant relied on the NCLAT judgment in 'Mr. Navneet Kumar Gupta, Resolution Professional of Monnet Power Company Limited versus Bharat Heavy Electricals Limited,' which stated that the RP cannot reject or accept claims but must verify them.

Tribunal's Findings:

1. Timeliness and Procedural Compliance:
The Tribunal noted that the main petition was admitted on December 23, 2019, and the RP invited claims with a submission deadline of January 5, 2020. The applicant submitted the claim on November 18, 2020, well beyond the stipulated time. The Tribunal emphasized that the RP had already issued the Information Memorandum (IM) on October 17, 2020, and the Resolution Plan was submitted on November 17, 2020.

2. Impact on CIRP Timeline:
The Tribunal highlighted that accepting claims at such a belated stage would disrupt the Corporate Insolvency Resolution Process (CIRP) timeline, potentially leading to the failure of the Resolution Plan and pushing the corporate debtor towards liquidation. The Tribunal referred to the Supreme Court's decision in 'Arcelor Mittal India Private Limited Vs. Satish Kumar Gupta & Ors.' which mandates strict adherence to the CIRP timeline.

3. Objective of IBC:
The Tribunal underscored the objective of the IBC, which is to ensure a timely resolution process to maximize the value of the corporate debtor. Allowing delayed claims would defeat this purpose and burden the Resolution Applicants with unforeseen claims, potentially leading to the withdrawal of the Resolution Plan.

Conclusion:
The Tribunal dismissed the application, stating that the claim was submitted beyond the stipulated time and accepting it would disrupt the CIRP. The Tribunal emphasized the importance of adhering to the CIRP timeline to achieve the objectives of the IBC.

---