2026 (1) TMI 527 - AT - IBC

Debt claim based on audited balance sheet and email loan takeover in CIRP; late challenge rejected, appeal dismissed.

A financial creditor challenged rejection of its claim in CIRP and sought relief under s.60(5) IBC, relying on acknowledgments in the corporate debtor's ... CIRP - belated claim and the maintainability of an application u/s 60(5) - Rejection of the Appellant’s claim as a financial creditor of the Corporate Debtor - Interim Resolution Professional, asserting its status as a financial creditor of the Corporate Debtor on the basis of a credit facility allegedly sanctioned - delay of 106 days from the CIRP commencement date - claim filed by the Appellant filed before the Resolution Professional is beyond the period of 90 days from the commencement of CIRP as per Regulation 12(2) of IBBI 2016; before the Second Amendment dated 18.09.2023 - HELD THAT:- The main ground of the Appellant is that Corporate Debtor in its audited balance sheet for the year 2013-2014 has admitted and acknowledged the loan of M/s Shivam International as well as the loan given by appellant to Corporate Debtor as two entries in the name of Intec Capital Limited. From the material placed on record it is noticed that the Appellant was informed by the corporate debtor/ Suspended Board of directors for the very first time on 04.06.2015 via email by one Mr Rajesh who was employee of the Corporate Debtor, stating that M/s Shivam International is not anymore in existence and Corporate Debtor has taken over the said loan hence requested to merge the loans. Suspended board of director Chander Bhushan was also marked CC in the said mail, hence the Corporate Debtor as well as suspended board of director had acknowledged the liability and takeover of the loan of M/s Shivam International by Corporate Debtor. Furthermore, we also observe that one of the Promoter/Personal Guarantor of the Corporate Debtor namely Ms. Sunita Dogra Alias Sunita Rani has filed an application under section 94 of Insolvency and Bankruptcy Code, 2016 for PIRP, which is pending before the Hon’ble NCLT Chandigarh Bench bearing CP(IB)/52/(CHD)/2024 wherein she has admitted/ acknowledged the fact that the Corporate Debtor has dues against the Appellant. Thus, we find that Personal Guarantor/ Promoters of the Corporate Debtor has admitted the fact that Corporate Debtor has dues against the Appellant. Thus, the promoters of the corporate debtor have duly acknowledged the liability and have also acknowledged the fact that loan of the Shivam International was taken over by the Corporate Debtor. Thus, we find no doubt about the debt and it is also reflected in the Balance Sheets of the Corporate Debtor. These facts support the case of the Appellant but from the circumstances in the case we find that the rejection of its claims has not been challenged timely and in the meantime resolution plan has been approved by the CoC and now pending before NCLT for approval. We find that the Appellant has not been diligent enough in following up his claim before the RP and NCLT and at this late stage it has woken up. The merit of above case could have been looked into by the Adjudicating Authority, had they been presented timely not belated. But at this stage, to re-start the process of the CIRP, we also don’t find sufficient cause which is to be done in a time bound manner and cannot be reopened at this stage. Thus, we are constrained to not agree with the grounds raised by the Appellant due to undue delay in challenging its claim which was rejected by the RP almost a year earlier. Appeal is therefore dismissed. Issues: (i) Whether a claim filed and responses furnished after the last date stated in the public announcement and challenged belatedly before the adjudicating authority can be admitted so as to reopen or derail the ongoing CIRP and pending resolution plan; (ii) Whether the claimant qualifies as a financial creditor of the corporate debtor by reason of alleged takeover/acknowledgement in audited financial statements and related documents.Issue (i): Whether a belated claim and delayed challenge to its rejection can be allowed so as to upset the CIRP and a resolution plan process.Analysis: The applicable regulatory framework prescribes a last date for submission of claims in the public announcement and requires proof for verification. A proviso permitting submission up to the ninety-day period from the insolvency commencement date was introduced by notification dated 18.09.2023; applicability depends on timing and circumstances. Precedent and regulatory policy bars reopening of the CIRP in a manner that would render the process endless or permit late entrants to derail an approved or pending resolution plan. Delay in responding to queries and in challenging rejection of the claim undermines entitlement to belated admission where the resolution process has advanced to plan approval stage and reopening would prejudice finality and timeliness of the CIRP.Conclusion: The belated claim and the delayed challenge cannot be allowed so as to reopen or derail the CIRP or the pending resolution plan; the objection to belated admission is upheld.Issue (ii): Whether the claimant qualifies as a financial creditor of the corporate debtor based on alleged takeover and entries in audited balance sheets and related acknowledgements.Analysis: Qualification as a financial creditor depends on whether liabilities were validly taken over by the corporate debtor and whether documentary evidence (takeover agreement, balance sheets, promissory notes, acknowledgements) establish that status. Evidence of entries in audited financial statements and admissions by promoters or guarantors may support existence of a debt and acknowledgement under limitation principles. However, competing documentary provisions (takeover agreement clauses limiting liabilities to a specific date, promissory notes showing guarantor identity) and absence or late production of material documents affect the ability to establish takeover conclusively. Even where merits favour recognition of a debt on factual or limitation grounds, undue delay in seeking admission and in challenging rejection precludes permitting reconsideration at a stage where the resolution process has progressed towards plan approval.Conclusion: The claimant's entitlement to be treated as a financial creditor on the basis of alleged takeover and balance-sheet entries is not permitted to be acted upon at this late stage; the claim is not admitted.Final Conclusion: The decision upholds the regulatory emphasis on time-bound claim submission and verification in insolvency proceedings and preserves the finality of the resolution process by refusing to admit a belated claim or permit reopening of the CIRP where the claimant delayed challenge and the resolution plan process has advanced.Ratio Decidendi: Where a creditor files or completes proof of claim after the deadline in the public announcement and delays challenging rejection until the resolution process has advanced to plan approval, regulatory provisions and the need to preserve finality of the CIRP require refusal to admit such belated claims so as to prevent reopening or indefinite extension of the insolvency process.