2025 (12) TMI 239 - AT - IBC

953-day delayed claim not condoned under Section 60(5) IBC; appeal against liquidator's rejection dismissed as time-barred

Regional Provident Fund Commissioner – II (Legal) Employees Provident Fund Organization Versus Mr. Jasin Jose, Liquidator of M/s. Atlas Gold Townships (India) Pvt. Ltd., Ernakulam

The NCLAT (Chennai) dismissed the company appeal, upholding the rejection of the appellant's interlocutory application seeking condonation of a 953-day ... Rejection of Interlocutory Application as preferred by the Appellant - delay of 953 days in submitting the claim before the liquidator - HELD THAT:- None of the authorities that have been relied upon by the Learned Counsel for the Appellant deal with the issue about the aspect of condonation of delay, particularly when it happens to be inordinate. Even on perusal of the Application itself, the Appellant has very vaguely given the reasons for seeking condonation of delay in filing the claim, except for the fact that, the Appellant while seeking a condonation of delay while invoking the provisions contained under Section 60(5) of the I & B Code, 2016, had tried to justify the claim, rather than the delay of the claim. Since there was almost 953 days of delay which is a fact admitted by the Appellant, since the Appellant also admits the fact about the intimation being already received by the Appellant after the notification of the invitation of the claim by the liquidator and despite of it, submission of the claim in the shape of Form G on 20.02.2024, is a highly belated claim and that has been rightly rejected by the Learned Tribunal by the Impugned Order and the delay as such, which has chanced in preferring the claim does not deserves to be condoned. Hence, consequentially the Company Appeal too is accordingly dismissed. 1. ISSUES PRESENTED AND CONSIDERED (1) Whether delay of 45 days in refiling the appeal before the Appellate Tribunal warranted condonation. (2) Whether delay of 12 days in filing the appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 warranted condonation. (3) Whether delay of 953 days in filing the claim before the liquidator under Section 38 of the Insolvency and Bankruptcy Code, 2016 could be condoned in exercise of jurisdiction under Section 60(5) of the Code read with Rule 11 of the NCLT Rules, 2016. (4) Whether precedents cited on the merits and priority of provident fund related claims under Section 53(b)(i) of the Insolvency and Bankruptcy Code, 2016 and provisions of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 had any bearing on condonation of the inordinate delay in filing the claim. 2. ISSUE-WISE DETAILED ANALYSIS Issue (1): Condonation of 45 days' delay in refiling the appeal Interpretation and reasoning: The Appellant explained that refiling was delayed due to difficulties in obtaining records from Kochi and the time required to prepare the file, obtain legal opinion, and rectify defects pointed out by the Registry. The Court examined the reasons set out in the application and found them satisfactory. Conclusions: The delay of 45 days in refiling the appeal was condoned and the related interlocutory application was allowed. Issue (2): Condonation of 12 days' delay in filing the appeal under Section 61(2) of the I&B Code Legal framework: The Court referred to the proviso to Section 61(2) of the Insolvency and Bankruptcy Code, 2016 prescribing the base limitation period and the outer limit of 45 days for filing an appeal, and to Section 12(2) of the Limitation Act regarding exclusion of time requisite for obtaining a certified copy. Interpretation and reasoning: The application for certified copy was made on 02.07.2024 and the certified copy was issued on 08.07.2024. The Court held that, in light of Section 12(2) of the Limitation Act, the period from 02.07.2024 to 08.07.2024 was to be excluded in computing limitation. After such exclusion, the delay was confined to 12 days. The Appellant further explained that being a large organisation (EPFO), certain codal formalities had to be completed before filing the appeal. The Court found the explanation satisfactory and noted that the appeal was filed within the overall outer limit of 45 days under the proviso to Section 61(2) of the Code. Conclusions: The delay of 12 days in filing the appeal was condoned and the interlocutory application was disposed of accordingly. Issue (3): Condonation of 953 days' delay in filing the claim before the liquidator under Section 38 of the I&B Code Legal framework: The Court referred to Section 38 of the Insolvency and Bankruptcy Code, 2016, which requires submission of claims within 30 days from the commencement of the liquidation process. Jurisdiction was invoked under Section 60(5) of the Code read with Rule 11 of the NCLT Rules, 2016 for condonation of delay and acceptance of a belated claim. Interpretation and reasoning: The liquidation process commenced on 04.06.2021 and the liquidator issued public notice inviting claims, fixing 08.07.2021 as the last date for submission. The Appellant did not file any claim within this timeframe and first submitted its claim in Form G on 20.02.2024. The delay was calculated as 953 days from the last date of submission. The Court noted that the delay and the relevant dates were admitted by the Appellant, and that the Appellant also admitted receipt of intimation of the invitation for claims from the liquidator. The Tribunal below had rejected the condonation request, finding no logic or sufficient reason in the application seeking condonation of this inordinate delay. The Court observed that, although belated submission of claims to the liquidator may be permitted under exceptional circumstances where delay is reasonably explained, the Appellant's application contained only vague reasons and focused on justifying the underlying claim rather than explaining the delay. No exceptional circumstances were either pleaded or established to justify such a long delay of 953 days. Conclusions: The claim, having been filed grossly beyond the period contemplated under Section 38 and the last date notified in the public announcement, and the delay of 953 days being unexplained and unsupported by exceptional circumstances, did not merit condonation. The rejection of the claim by the liquidator and by the Adjudicating Authority was held to be justified. The appeal on this issue was dismissed. Issue (4): Relevance of case law cited on merits and priority of provident fund-related claims Interpretation and reasoning: The Appellant relied on several judgments concerning the effect of Section 53(b)(i) of the Insolvency and Bankruptcy Code, 2016 and the treatment of dues under Sections 14B and 7Q of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The Court held that these authorities related to the merits, nature, and priority of provident fund dues, and not to the question of condonation of inordinate delay in submission of claims in the liquidation process. Since the controversy before the Court concerned only the justification and condonability of a 953-day delay, and not the substantive priority or admissibility of the provident fund claim per se, the cited judgments were found to be irrelevant for deciding the issue of delay. Conclusions: Precedents on the merits and priority of provident fund related claims did not assist the Appellant on the issue of condonation of delay. The appeal, being confined to the belated claim and lacking any sufficient explanation for the delay, was dismissed, and all pending applications were closed.