Tribunal overturns Adjudicating Authority's error in including belated claim, stresses IBC compliance.

The Tribunal allowed the appeal, finding the Adjudicating Authority's order to include a belated and unverified claim as erroneous. Emphasizing adherence to IBC timelines and procedures, the Tribunal set aside the Authority's order, highlighting the Resolution Professional's substantial compliance in verifying and admitting claims.

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Issues Involved:
1. Inclusion of additional, belated, and unverified claims in the Resolution Plan.
2. Verification and adjudication of claims by the Resolution Professional (RP).
3. Admissibility of claims filed after the stipulated period.
4. Classification of claims as Corporate Insolvency Resolution Process (CIRP) costs.
5. Jurisdiction and powers of the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC).

Detailed Analysis:

1. Inclusion of Additional, Belated, and Unverified Claims in the Resolution Plan:
The Appellant, the Resolution Professional (RP) of the Corporate Debtor (CD), contested the inclusion of an additional claim of Rs. 3,14,81,158/- by Respondent No. 1 (R1) in the Resolution Plan. The Adjudicating Authority directed the RP, Committee of Creditors (CoC), and the Resolution Applicant to include this claim, which was submitted belatedly and without verification. The RP argued that the claim was time-barred and not admissible within the framework of the IBC and related regulations.

2. Verification and Adjudication of Claims by the Resolution Professional (RP):
The RP emphasized the necessity of verifying claims on merits, as per the provisions of the IBC and CIRP Regulations. The RP found the additional claim of Rs. 3,14,81,158/- inadmissible based on various reasons, including discrepancies in the claim form and lack of supporting invoices. The RP argued that the claim was not verified or ratified by the CoC and was not adjudicated by the Adjudicating Authority, making it untenable.

3. Admissibility of Claims Filed After the Stipulated Period:
The RP highlighted that the claim by R1 was filed after the 90-day period stipulated in CIRP Regulations, which expired on 09.11.2020. The Adjudicating Authority's acceptance of this belated claim was challenged, citing that the outer limit for filing claims is 90 days from the insolvency commencement date, as per Regulation 12(2) of the CIRP Regulations. The RP argued that condoning such delays would nullify the amendment made to Regulation 12(2).

4. Classification of Claims as Corporate Insolvency Resolution Process (CIRP) Costs:
The Adjudicating Authority allowed Rs. 3,14,81,158/- as CIRP costs, claiming it was incurred for running the business of the CD during the CIRP period. However, the RP contested this classification, arguing that the claim was not verified or approved by the CoC and did not fall under the definition of CIRP costs as per Section 5(13) of the IBC. The RP also pointed out that the lease term had expired, and no revenue was earned from the leased equipment during the CIRP process.

5. Jurisdiction and Powers of the Adjudicating Authority under the Insolvency and Bankruptcy Code (IBC):
The RP argued that the Adjudicating Authority overstepped its jurisdiction by directing the inclusion of the unverified claim without adhering to the procedural requirements of the IBC. The RP cited various judgments to support the position that the Adjudicating Authority should not interfere with the commercial wisdom of the CoC and should operate within the framework of the IBC.

Conclusion:
The Tribunal found merit in the Appeal, noting that the Adjudicating Authority's order to include the belated and unverified claim was erroneous. The Tribunal emphasized the importance of adhering to the stipulated timelines and procedural requirements under the IBC. The Tribunal set aside the order of the Adjudicating Authority, allowing the Appeal and highlighting that the Resolution Professional had substantially complied with the requirements of the IBC in verifying and admitting claims.

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