Claim for Delay Dismissed, Emphasizes Timely Submission in Insolvency

The Adjudicating Authority dismissed the Applicant's claim for condonation of a 217-day delay in filing a claim before the Resolution Professional. The decision was based on the lack of a valid reason for the delay, the disputed nature of the quantified amount, and the pending Resolution Plan approval. The Authority emphasized the importance of timely claim submission in insolvency proceedings and highlighted the evolving interpretation of regulations regarding condonation of delays, underscoring the need for creditors to adhere to prescribed timelines and provide justifiable reasons for any delays in filing claims.

---

---

Issues:
Delay in filing claim before the Resolution Professional of the Corporate Debtor under section 60(5) of the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The Applicant sought to condone a delay of 217 days in filing a claim before the Resolution Professional. The claim pertained to duty saved amount and interest owed by the 2nd Respondent under Customs Notification. The Applicant contended that as an Operational Creditor, they were entitled to claim the amount payable to the Government of India.

2. The Respondents argued against condoning the delay, highlighting that the Applicant was aware of the initiation of Corporate Insolvency Resolution Process (CIRP) against the 2nd Respondent. They also raised issues regarding the quantification of the claim and pending litigations, stating that the Resolution Plan was awaiting approval before the Committee of Creditors (CoC).

3. The Adjudicating Authority examined the provisions of the Insolvency and Bankruptcy Code and the Insolvency Resolution Process Regulations. It noted the requirement for timely submission of claims to ensure a time-bound resolution process. The Authority highlighted Regulation 12(2), which introduced a 90-day deadline for submitting claims, effective from July 2018.

4. The question arose whether the 90-day period stipulated in Regulation 12(2) was mandatory or could delays be condoned. Recent judgments by various Tribunals indicated a trend of condoning delays beyond the specified timeline, considering the regulation as directory rather than mandatory.

5. The Authority referenced specific cases where delays were condoned, emphasizing the need to consider claims even if filed after the deadline. Notably, in a case involving government dues, the Tribunal directed the Resolution Professional to collate the claim despite the expiration of the 90-day period.

6. Ultimately, the Authority dismissed the Applicant's claim for condonation of the 217-day delay. The decision was based on the Applicant's failure to provide a valid reason for the delay, the disputed nature of the quantified amount, and the pending Resolution Plan approval. The Authority concluded that at the advanced stage of the CIRP, the application could not be entertained.

7. The judgment highlighted the importance of timely claim submission in insolvency proceedings while acknowledging the evolving interpretation of regulations regarding condonation of delays. The decision underscored the need for creditors to adhere to prescribed timelines and provide justifiable reasons for any delays in filing claims.

---