2025 (9) TMI 1223 - AT - IBC

Appeals dismissed for failure to prove payments; unsigned receipt, unregistered agreement and no bank entries warrant claim rejection

Ms. Sneha Kore, Mr. Nipun Kore and Mr. Rajan Shivkumar Mangave Versus Mr. Arun Kapoor

NCLAT dismissed the appeals, upholding the adjudicating authority's rejection of claimants' claims for delay and absence of entries in the corporate ... Rejection of claims of the Appellants’ on account of delay by the Appellants, in addition to not finding their details in the books of the Corporate Debtor - treatment as Homebuyers or not - HELD THAT:- The Appellants failed to establish the crucial aspect of transfer of monies to the bank account(s) of the Corporate Debtor. The Appellants have not challenged the finding that no money has been received in the bank account of Corporate Debtor. The Appellants could not place on record documents demonstrating payment having been made to the Corporate Debtor. It is observed from the Impugned Order that even the purported payment receipt annexed by the Appellants as 'Annexure A' at Pg. No. 101 of the CA No. 1169 of 2024 before the Adjudicating Authority is of no evidentiary value as the document was neither witnessed nor dated, nor does it bear any acknowledgment from the Corporate Debtor. It has been brought out during pleadings by the Resolution Professional that there is no signature of any authorized person from the Corporate Debtor acknowledging receipt of alleged funds, nor is there any stamp, reference number, or verification that would validate the alleged payments as genuine transaction. Further, the Agreement relied upon by the Appellants as Annexure - B at Pg. Nos. 67 – 102 before the Adjudicating Authority was unregistered and unexecuted. These facts do not support the cause of the Appellant’s. There are no error in the Impugned Order. The Appeals devoid of any merit, stand rejected. ISSUES PRESENTED AND CONSIDERED 1. Whether claims filed belatedly (post Committee of Creditors approval and pending Adjudicating Authority sanction) can be admitted by the Resolution Professional or Adjudicating Authority. 2. Whether alleged deficiencies in the statutory public announcement under Section 13 of the Code read with Regulation 6 of the CIRP Regulations (choice of newspapers, publication on a non-business day, and upload on websites) vitiate the CIRP notice process and justify condonation of delay in filing claims. 3. Whether appellants qualify as Financial Creditors/allottees/homebuyers under Section 5(8) of the Code based on the asserted Agreement for Sale and consumer forum order, in the absence of demonstrable payments traceable in the corporate debtor's books and bank accounts. 4. Applicability and interplay of precedents dealing with belated homebuyer claims and finality of resolution plans (including the tribunal's own Puneet Kaur decision and higher court rulings discouraging admission of late claims such as RPS Infrastructure and Essar Steel principles). ISSUE-WISE DETAILED ANALYSIS Issue 1 - Admissibility of belated claims post-CoC approval and pending sanction Legal framework: The Code and CIRP Regulations require filing of claims during the CIRP and empower the Resolution Professional to verify and admit claims; the resolution plan is evaluated and approved by the CoC exercising commercial wisdom and thereafter sanctioned by the Adjudicating Authority. Post-approval, allowing fresh claims threatens finality and commercial certainty under the Code. Precedent treatment: The Court relied on the principle in RPS Infrastructure and Essar Steel lines of authority (as invoked by respondents) which discourage acceptance of new claims after CoC approval to avoid creating uncertainty for the successful resolution applicant; Puneet Kaur (tribunal precedent) permits belated admission in narrow circumstances where claims are recorded in the corporate debtor's books prior to plan approval. Interpretation and reasoning: The Tribunal reasoned that permitting claims after CoC approval (and especially long delays thereafter - here 1,357 days) undermines the Code's objective of a time-bound, certain resolution; the commercial wisdom of the CoC in approving the plan cannot be second-guessed. The tribunal observed no plausible explanation for such prolonged delay and emphasized that the Resolution Professional cannot, under the Code, condone gross delay post-CoC approval. The tribunal treated the risk of creating a 'hydra head' of unknown liabilities as decisive. Ratio vs. Obiter: Ratio - Belated claims filed long after CoC approval, absent exceptional justification and traceable recording in corporate records, are not admissible; the CoC's commercial wisdom and plan finality are to be respected. Obiter - Observations on general undesirable consequences of reopening CIRP after plan approval and hypothetical policy concerns. Conclusions: The appeals fail on this issue; the belated claims were properly rejected where no satisfactory explanation or evidence justified condonation of delay and admitting them would disturb the finality of the approved plan. Issue 2 - Adequacy of public announcement under Section 13/Regulation 6 and effect on notice/condonation Legal framework: Regulation 6 of the CIRP Regulations prescribes publication of Form A in newspapers (English and regional/local) with wide circulation in the place of the corporate debtor's registered office, upload on IBBI and corporate debtor website, and other mandated modalities for communicating CIRP commencement. Precedent treatment: The tribunal considered the statutory requirements and noted that compliance by publication in newspapers where the corporate debtor's registered office is situated, plus uploads on requisite platforms, satisfies the regulation; tribunal also acknowledged decisions permitting protection of the process where required steps are followed. Interpretation and reasoning: The tribunal found the public announcement was published in two newspapers (an English national edition and a local language paper) consistent with Regulation 6 and located in the city of the corporate debtor's registered office; the tribunal rejected the contention that announcements must be published in every city where potential allottees reside. The tribunal further held that once publication was made in stipulated outlets and on IBBI/corporate website, appellants cannot claim prejudice arising from not seeing the announcement. The appellants' residence in a different city (Kolhapur) did not render the publication defective. Ratio vs. Obiter: Ratio - Publication in newspapers as prescribed (in the city of registered office) and uploads as required constitutes sufficient compliance with Regulation 6; non-publication in every city of potential claimants does not vitiate the process. Obiter - Remarks about impracticality of nationwide newspaper publication for each CIRP. Conclusions: The tribunal found no merit in the challenge to public announcement adequacy and did not accept procedural lapses as a basis to condone delayed claims. Issue 3 - Status as Financial Creditor/homebuyer: evidentiary requirement of payment traceable to corporate debtor's books/accounts Legal framework: Section 5(8) defines financial creditor (and interpretations of homebuyer/allottee status flow from traceable payment to the corporate debtor). The CIRP process and IM require accurate disclosure of liabilities; Puneet Kaur (tribunal precedent) allows admission of belated homebuyer claims only if the payments are recorded in the corporate debtor's books prior to plan approval. Precedent treatment: Puneet Kaur was distinguished as concerned with homebuyers whose payments were already recorded in the corporate debtor's books even if they had not filed claims; RPS/Eassar principles were applied to prevent belated claim admission where books show no record. Interpretation and reasoning: The tribunal closely scrutinized the appellant's documentary material: undated, unstamped, unwitnessed Agreement for Sale and an unsigned receipt lacking acknowledgment by the corporate debtor; no entries or bank transactions were found linking payments to the corporate debtor's accounts. The tribunal held that unsubstantiated instruments cannot displace the absence of entries in the corporate debtor's books. The tribunal therefore concluded appellants did not satisfy the essential element of transfer of monies to the corporate debtor - a prerequisite for classification as Financial Creditors/homebuyers under Section 5(8). Ratio vs. Obiter: Ratio - Claimant alleging homebuyer/financial creditor status must produce cogent evidence of payment to the corporate debtor traceable in its books/accounts; absence of such traceability defeats the claim and precludes application of Puneet Kaur. Obiter - Observations on inadmissibility of unstamped/undated/unsigned documents as reliable proof in this context. Conclusions: The tribunal concluded appellants are not Financial Creditors/homebuyers for want of traceable payments; consequently, their claims were properly excluded from the IM and resolution process. Issue 4 - Applicability and interplay of precedents (Puneet Kaur vs. RPS/Eassar lines) Legal framework: The Code jurisprudence balances protection of bona fide creditors (including homebuyers) and the need for finality and certainty of resolution plans; tribunal must reconcile its prior pronouncements with higher-court directives that restrict belated claims post-CoC approval. Precedent treatment: The tribunal treated Puneet Kaur as applicable only in its narrow factual ambit - where payments are evidenced in the corporate debtor's records - and regarded RPS Infrastructure and Essar Steel dictates as controlling on the larger point that belated claims which disturb plan finality are to be discouraged. Interpretation and reasoning: The tribunal reconciled the precedents by distinguishing facts: Puneet Kaur does not authorize admission of belated claims absent corporate records documenting the liability; RPS/Eassar bar reopening liabilities after CoC approval to protect the SRA. The tribunal applied higher-court principles to the facts where no corporate recording or bank tracing supported appellants' claims. Ratio vs. Obiter: Ratio - Tribunal's prior decision (Puneet Kaur) is confined to cases where the corporate debtor's records already acknowledge the claims; higher-court principles restricting admission of new claims post-CoC approval prevail where such records are absent. Obiter - Commentary on the policy tension between homebuyer protection and plan certainty. Conclusions: The tribunal held the precedents are harmonizable; Puneet Kaur is inapplicable on these facts and RPS/Eassar principles justify rejection of the belated, unsubstantiated claims. Final Conclusion The tribunal affirmed that (i) publication requirements were met and did not justify condonation of delay; (ii) appellants failed to demonstrate payments traceable to the corporate debtor's books/accounts and hence are not Financial Creditors/homebuyers under the Code; (iii) belated claims filed long after CoC approval and without requisite evidence cannot be admitted without disturbing the Code's objectives and the CoC's commercial wisdom; and (iv) in consequence, the impugned order rejecting the claims was upheld. These findings constitute the operative ratio disposing of the appeals.