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TaxTMI 
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TaxTMI 
2021 (8) TMI 34
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....te company engaged in the business of providing construction of real estate projects. The Corporate Debtor has floated prospectus for three projects (i) Sector 114, Gurgaon, (ii) Sector 89, Faridabad and (iii) KST Whispering Heights in Sector 88, Faridabad, Haryana. All the three projects were pending as the Corporate Debtor failed to complete the construction of projects and offer possession to the homebuyers who have invested their hard earned savings in the projects. Ms. Sonia Rani and five other allottees (Homebuyers) have filed the Application under section 7 of the IBC against the Corporate Debtor. Ld. Adjudicating Authority vide order dated 27.03.2019 admitted the Application and initiated CIRP against the Corporate Debtor 'KST Infrastructure Ltd.' and appointed Mr. Sandeep Chandna as Interim Resolution Professional (IRP). On 30.03.2019, the IRP issued a public announcement and invited claims from its creditors in the prescribed format as per Regulation 6. Upon receipt of claims, the erstwhile IRP constituted a Committee of Creditors (COC) on 06.11.2019. Thereafter, the IRP circulated the draft information memorandum and invited Expression of Interest (EOI) from prospective ....
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....rough public notice dated 30.03.2019. The extended time period for submissions of claims with proof was 90 days from the date of initiation of CIRP. This period expired on 06.11.2019. It is undisputed that the CoC had approved the Resolution Plan on 17.07.2020 much before the said claim was preferred before the RP. It is submitted that any interruption in the CIRP at this stage by including a delayed claim would have meant setting the clock back and sending the matter back to CoC and the RP. Furthermore, it cannot be ruled out that if the claim of the Respondent is accepted at such belated stage there could have been other Applicants too, who would have demanded accommodation on the same ground allowing late submissions of their claims. It is submitted that this would have meant a complete disruption of the CIRP and the timelines stipulated therein and such delay would defeat resolution as this would have resulted in the CIRP and approval of Successful Resolution plan to continue for an indefinite period of time. which is certainly not the intent and purpose of the IBC. 7. Ld. Counsel for the Appellant submits that as per the Respondent, claim arising out of arbitral award was pas....
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....n this matter the Resolution Plan has only been approved by the CoC and is pending for approval before the Adjudicating Authority. In such a situation, the claim is to be adjudicated before any resolution plan is considered, for this purpose, he placed reliance on the Order passed by the principal bench of NCLT in the case of Alchemist Asset Reconstruction Company Pvt. Ltd. Vs. NIIL Infrastructure Pvt. Ltd. CA No. 260 of 2020. It is submitted that the Appellant in Appeal and Rejoinder has contended that he was unaware of any financial debt accruing towards the Respondent, since the books of accounts and other documents were not made available to the Appellant. It is to be noted that failure in discharging its duties diligently should not amount to rejection of claim of the Respondent. The Appellant (RP) was well aware of the judicial proceedings from which the claim of Respondent is derived despite that Appellant did not bother to cover the claim of the Respondent in the information memorandum as contingent liabilities. 11. Ld. Counsel for the Respondent submitted that Ld. Adjudicating Authority correctly observed that reconsideration of Respondent's claim will not prejudice the r....
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....d in Regulation 6. There is no provision in the Regulations that for inviting claims, the IRP/RP is required to effect personal service. 17. The Respondent in Para 6 of his reply admitted that: "It is correct that the Respondent filed its claim through the public notice, however, there are certain admitted debts which are part of the record of the Corporate Debtor. The non-filing of the claim, in view of the public notice does not entitle to the Appellant to extinguish the claim recorded in the books of Corporate Debtor." 18. With the aforesaid admission, it is apparent that the Respondent is not disputing that the public notice is not a proper service. It is also to be noted that the Respondent on 19.08.2020 sent the claim through email to RP. Even in that email it is not stated that the Respondent was unaware of the public notice, therefore, he could not submit his claim in time (See Annexure -A4 Pg. 131-133 of Reply filed by the Respondent). Therefore, the finding of Ld. Adjudicating Authority that the paper publication is not a proper service and it comes into picture when the personal service is not effected, is erroneous in view of the provisions of Regulation 6 of the Re....
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....are not left out." 23. Ld. Adjudicating Authority is not pointing out that what type of efforts RP should make to ascertain the Creditors. Aforesaid finding is a general remark, therefore we cannot hold that the RP has failed to perform his duty assigned in the IBC and Regulations. Ground (iv) 24. Ld. Adjudicating Authority held that "All this will be taken care of when RP, from day one put efforts to get the records from the ex-management. This is more important than hurriedly wrapping up the company with a Resolution Plan, then only wholesome justification could be done to the purpose for which this Code has come into existence." 25. For appreciating the aforesaid finding, we would like to refer the dates and events: Dates Events 27.03.2019 The CIRP was commenced for the Corporate Debtor i.e. KST Infrastructure Ltd. 30.03.2019 Public announcement of the CIRP was issued by the then IRP. 06.11.2019 Claims were admitted upon verification and a committee of creditors was constituted by the then IRP. 14.02.2020 The Draft information memorandum, invited expression of interest from prospective resolution applicants in prescribed format were issued by the then IRP. 18.06.2....
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....mes of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest if any in respect of such claims and update it. Regulation 13 also provides that the list of creditors shall be available for inspection and it be displayed on website of the Corporate Debtor. 29. With the aforesaid it is apparent that the IRP/RP can accept the claim as per extended period as provided in Regulation 12(2). It means after extended period of 90 days of the insolvency commencement date the IRP/ RP is not obliged to accept the claim. 30. It is argued on behalf of the Respondent that the Regulations are directory but not mandatory and for this purpose, placed reliance on the Judgment of Hon'ble Supreme Court in the case of Brilliant Alloys Pvt. Ltd. (Supra). In this Judgment Hon'ble Supreme Court has dealt with the provision of Section 12(A) with the Regulation 30 and held that the stipulation in the Regulations can only be construed as directory depending on the facts of each case. There is no ratio of the Judgment that the Regulations are directory and not mandatory. 31. With the aforesaid, we are of view that whenever any claim is filed after extend....
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....lete disruption of the CIRP and the timelines stipulated therein. Delay would defeat Resolution as this would have resulted in the CIRP and approval of successful Resolution Plan to continue for an indefinite period of time, which is certainly not the intention of IBC. A real hazard in such an event could be liquidation, and corporate death, of an otherwise functional and corporate debtor, with which Resolution Plan approved is set to come out of the Red 33. This Tribunal in the case of Harish Polymer Product (Supra) decided on 18.06.2021 held that: 7. It is pertinent to mention herein that the Resolution Plan has already been received by the CoC as apprised by the RP and it is at the final stage of approval of the CoC (as per RP). At this belated stage, if such types of applications are allowed, the Resolution Plans already received by the CoC from the prospective Resolution Applicants, may get failed, as those are filed on the basis of Information Memorandum (IM). The prospective Resolution Applicants submitted their Resolution Plan on the basis of their financial capacity and availability of funds. There is every likelihood that, if the claims of the different creditors are b....
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....approval. If this application is allowed, then, there is every likelihood that the Resolution Applicants may withdraw their plan, as it will be a burden 8 Company Appeal (AT) (Insolvency) No. 420 of 2021 with other huge claims of the creditors, which they might have not planned earlier, while giving the resolution plan based on the IM. Thus, under such situation, the Corporate Debtor may be pushed for liquidation. 34. With the aforesaid, we are of the view that when the Resolution Plan has already been approved by the CoC and it is pending before the Adjudicating Authority for approval, at this stage, if new claims are entertained the CIRP would be jeopardized and the Resolution Process may become more difficult. Keeping in view the object of the IBC which is resolution of Corporate Debtor in time bound manner to maximize the value, if such request of claimant is accepted the purpose of IBC would be defeated. Hon'ble Supreme Court in the case of CoC of Essar Steel India Ltd. (Supra) held as under:- 88. For the same reason, the impugned NCLAT judgment in holding that claims that may exist apart from those decided on merits by the resolution professional and by the Adjudicating Au....