2021 (5) TMI 315 - Tri - Insolvency and Bankruptcy

Dismissal of Liquidator's Claim Filing Delay Emphasizes Timely Liquidation in Insolvency

The court dismissed the Liquidator's application to condone a 796-day delay in filing a claim, emphasizing the time-bound nature of liquidation ... Condonation of delay in filing claim - claim submission within 30 days from liquidation - verification and admission or rejection of claims by Liquidator - liquidation process is time-bound - liquidator's duty to complete liquidation within one year - no equity about limitationCondonation of delay in filing claim - claim submission within 30 days from liquidation - liquidation process is time-bound - no equity about limitation - Application to condone delay of 796 days in preferring claim before the Liquidator of the Corporate Debtor was dismissed. - HELD THAT: - The Tribunal recorded that claims in a liquidation are to be submitted within the 30 day period fixed by the liquidation public announcement and that the Liquidator must verify claims in accordance with the Regulations. The applicant, acting as Liquidator of a separate corporate debtor, sought condonation for a 796 day delay but did not disclose whether the claim had been filed during the CIRP period nor furnish any plausible explanation for the prolonged delay. The Tribunal emphasised that liquidation is a time bound process and that the Liquidator is accountable to complete liquidation within one year unless extended in accordance with the Regulations. Relying on the settled principle that there is 'no equity about limitation,' the Tribunal found no basis to excuse the delay and declined to extend the time for filing the claim. [Paras 11, 12, 13]IA/791/IB/2020 dismissed for failure to justify condonation of 796 day delay in filing the claim; no costs.Final Conclusion: The application for condonation of delay in filing the claim was dismissed because the claimant failed to show any plausible reason for the 796 day delay, and the time bound nature of the liquidation process (including the 30 day claim period and the one year liquidation timeline) precluded extending the limitation in the circumstances. Issues:Delay in filing claim before the Liquidator.Analysis:The judgment deals with an application filed by the Liquidator of a company seeking to condone a delay of 796 days in filing a claim before the Liquidator. The company, admitted into Corporate Insolvency Resolution Process, had dues pending from another company for supply of products. The Liquidator, appointed one year after the last date for claim submission, faced challenges in verifying the claim due to lack of submission records and unavailability of claim details on the respondent's website. The Liquidator prepared the claim with supporting documents but sought to condone the delay in submission. The Liquidator's obligation to verify claims within specified time limits, admit or reject claims, and communicate decisions to creditors and the Corporate Debtor were highlighted. The judgment noted the absence of reasons for the delay in filing the claim and emphasized the time-bound nature of liquidation proceedings, requiring the Liquidator to explain any delays in the process. Citing a Supreme Court ruling on limitation, the judgment dismissed the application due to the time-bound nature of the Insolvency and Bankruptcy Code, emphasizing the lack of equity regarding limitation and the need for timely completion of the liquidation process.