Tribunal Upholds Timely Claim Submission Rule in Insolvency Appeals

The Tribunal dismissed the Appellant's appeal, affirming the Adjudicating Authority's decision to reject the claim due to untimely submission, despite arguments regarding lack of awareness and the impact of the Covid-19 pandemic. Emphasizing the importance of adhering to statutory timelines in insolvency proceedings, the Tribunal upheld that Regulation 12(2) must be strictly followed. The judgment highlights that delayed claims cannot be entertained, even during exceptional circumstances, reinforcing the significance of complying with prescribed deadlines in the Corporate Insolvency Resolution Process.

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Issues Involved:
1. Timeliness of claim submission by the Appellant.
2. Interpretation of Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.
3. Impact of the Covid-19 pandemic and the Supreme Court's order on the limitation period.
4. Whether the Appellant's claim should be admitted despite the delay.

Detailed Analysis:

1. Timeliness of Claim Submission by the Appellant:
The Appellant, an Operational Creditor, missed the deadline to submit their claim by 12.02.2020, as announced by the Interim Resolution Professional (IRP) on 31.01.2020. The Appellant was unaware of the Corporate Insolvency Resolution Process (CIRP) due to a lack of communication and the departure of a key director to Australia. The Appellant only became aware of the CIRP in December 2020 and subsequently submitted their claim on 22.01.2020 and 24.12.2020. The Resolution Professional rejected the claim on 31.12.2020 for being time-barred.

2. Interpretation of Regulation 12(2):
The Appellant argued that Regulation 12(2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which allows claims to be submitted within 90 days of the insolvency commencement date, is directory and not mandatory. The Appellant cited previous judgments by the NCLT, New Delhi, Principal Bench, which supported this interpretation. However, the Adjudicating Authority rejected the Appellant's application, holding that the claim could not be accepted due to the expiration of the 90-day period.

3. Impact of Covid-19 Pandemic and Supreme Court's Order:
The Appellant referenced the Supreme Court's order dated 23.03.2020, which suspended the limitation period for all legal proceedings due to the Covid-19 pandemic. The Appellant argued that this order should apply to their claim submission. Despite this, the Adjudicating Authority did not find sufficient grounds to accept the delayed claim, emphasizing the importance of adhering to the statutory timelines.

4. Admission of the Appellant's Claim Despite Delay:
The Appellant contended that their claim should be admitted as the CIRP was still in progress and no Resolution Plan had been approved. The Appellant's claim was based on invoices, E-way bills, and other documentation. Despite the Appellant's arguments, the Adjudicating Authority maintained that the claim was submitted beyond the permissible period and upheld the Resolution Professional's decision to reject it.

Findings and Order:
The Tribunal found that the Appellant had full knowledge of the CIRP and deliberately failed to submit their claim within the stipulated time. The Tribunal affirmed the Adjudicating Authority's order dated 09.03.2021, rejecting the Appellant's application. The appeal was dismissed, and the Tribunal emphasized the importance of adhering to the statutory timelines in the CIRP process.

Conclusion:
The judgment underscores the criticality of adhering to statutory timelines in insolvency proceedings and clarifies that Regulation 12(2) is to be strictly followed. The Tribunal dismissed the Appellant's appeal, reinforcing the principle that claims submitted beyond the permissible period cannot be entertained, even in light of the Covid-19 pandemic and the Supreme Court's order on the suspension of limitation periods.

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