TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1199
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....nge Board of India-Appellant seeking admission of their Form-C claim which had been rejected by the Liquidator. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant. 2. Coming to the brief facts of the case, Securities and Exchange Board of India ("SEBI" in short) had received certain complaints regarding financial mismanagement and diversion of funds in Religare Finvest Ltd. (RFL) which was a subsidiary of Religare Enterprises Ltd. (REL) and in the investigations which followed, Annies Apparel Pvt. Ltd.-Corporate Debtor was served a Show Cause Notice on 15.02.2021 purportedly for diversion/misutilization of funds of REL through RFL. While the SEBI had proceeded with their inquiry against the Corporate Debtor, the latter came under liquidation on 15.03.2021. The Liquidator appointed for this purpose under Regulation 12 of the IBBI (Liquidation Process) Regulations, 2016 (hereinafter referred to as "LPR") published a public announcement seeking claims from various stakeholders fixing 14.04.2021 as the last date for submission of claims. The Adjudicating Officer of the SEBI passed an Adjudication Order ("AO" in short) under the SEBI Act on 31.10.....
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....t of liquidation, the same should have been considered by the Liquidator for the purpose of distribution of assets under Section 53 of IBC and that such course of action has been affirmed by judicial precedent as laid down by the Hon'ble Supreme Court in Sundaresh Bhatt, Liquidator of ABG Shipyard Vs Central Board of Indirect Taxes and Customs in Civil Appeal No. 7667 of 2021. 4. Refuting the contentions made by the Appellant, Shri Ajay K. Jain, Ld. Counsel for the Respondent submitted that in terms of the Regulation 16 of LPR, only such claims which exist on the liquidation commencement date can be admitted by the Liquidator and that this Regulation does not confer any discretion on the Liquidator to entertain claims which are filed beyond the statutory timelines. In the present case, the liquidation commencement date being 15.03.2021, the Liquidator could not have admitted the claims of SEBI which was filed on 20.06.2023 which date is 235 days after passing of the order by the AO and 797 days after liquidation commencement date. Further contention was made that since the AO of SEBI was passed on 31.10.2022, the claim clearly did not exist on the liquidation commencement date. ....
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.... and one regional language newspaper with wide circulation at the location of the registered office and principal office, if any, of the corporate debtor and any other location where in the opinion of the liquidator, the corporate debtor conducts material business operations; (b) on the website, if any, of the corporate debtor; and (c) on the website, if any, designated by the Board for this purpose." It is pertinent to note that Regulation 12(2)(a) clearly enjoins upon stakeholders to submit their claims or update their claims submitted during the CIRP "as on the liquidation commencement date". The significance of liquidation commencement date is also highlighted by the fact that even the last date for submission and updation of claims has been fixed as 30 days from liquidation commencement date. 9. We next come to Regulation 13 of LPR which deals with submission of 'Preliminary report' by the Liquidator. This Regulation provides that the Liquidator shall submit a preliminary report to the Adjudicating Authority within seventy-five days from the liquidation commencement date which should contain the estimates of the assets and liabilities as on the liquidat....
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....ch adequately establish the debt, including any or all of the following - (i) a contract for the supply of goods and services with corporate debtor; (ii) an invoice demanding payment for the goods and services supplied to the corporate debtor; (iii) an order of a court or tribunal that has adjudicated upon the non-payment of a debt, if any; and (iv) financial accounts. The above Regulation 17 of LPR provides that claims of Operational Creditors are required to be submitted in Form-C. 12. We may now engage our attention to Form-C under Regulation 17 of the LPR which is as reproduced below: IBBI (Liquidation Process) Regulations, 2016 FORM C PROOF OF CLAIM BY OPERATIONAL CREDITORS EXCEPT WORKMEN AND EMPLOYEES (Under Regulation 17 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016) [Date] To The Liquidator [Name of the Liquidator] [Address as set out in the public announcement] From [Name and address of the operational creditor] Subject: Submission of proof of claim in respect of the liquidation of [name of corporate debtor]....
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....ws: "5(17) "liquidation commencement date" means the date on which proceedings for liquidation commence in accordance with section 33 or section 59, as the case may be;" The liquidation commencement date having been specifically defined, there is clear purpose and object for considering the claim as on liquidation commencement date. 14. The criticality of liquidation commencement date in the admissibility of claims by the Liquidator has also been propounded in the judgement of this Tribunal in The Regional P.F. Commissioner, Employees' Provident Fund Organization Vs. Alok Kailash Saksena Liquidator of Gujarat Foils Ltd. & Anr. in CA (AT) (Ins) No.807 of 2025. Though this judgment is in the context of claims arising under EPF Act, the principles laid down in this judgment are squarely applicable in this case as it has laid down that only such claims can be accepted by the Liquidator which arise on the liquidation commencement date and factorising of any claim arising thereafter is inadmissible. The relevant paragraphs of the said judgment is reproduced below: "7. There is no dispute between the parties that liquidation process of the Corporate Debtor comm....
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....t Fund dues to the extent of Rs. 4,57,13,010; (C) This Hon'ble Adjudicating Authority may be pleased to direct the Respondent no. 1- Liquidator of M/s. Gujarat Foils Limited to supply the details of distribution made to the creditors of the proceeds received from the sale of the Corporate-debtor as a going concern, and direct the re- distribution of assets of the Corporate-debtor, in accordance with law; (D) This Hon'ble Adjudicating Authority may be pleased to direct the respondent to pay costs to the applicant as may be determined by this Hon'ble Tribunal; (E) This Hon'ble Adjudicating Authority may be pleased to pass any further order as may be deemed fit and proper in the interest of justice." 10. The said IA was opposed both by the Resolution Professional as well as the Successful Bidder. Counsel for the Appellant submits that the proceedings were initiated for assessment under Section 7A with due information to the Liquidator and order passed under Section 7A was required to be admitted in liquidation proceeding. Counsel for the Appellant has relied on the judgment of the Hon'ble Supreme Court in "Employees Provident Fund Co....
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....ges or salary of any employee, in respect of the services rendered to the company and due for a period not exceeding 4 months, all accrued holiday remuneration, etc. and all sums due to any employee from a provident fund, a pension fund, a gratuity fund or any other fund for the welfare of the employees maintained by the company are payable in priority to all other debts. This provision existed when Section 11(2) was inserted in the EPF Act by Act 40 of 1973 and any amount due from an employer in respect of the employees' contribution was declared first charge on the assets of the establishment and became payable in priority to all other debts. However, while inserting Section 529-A in the Companies Act by Act 35 of 1985 Parliament, in its wisdom, did not declare the workmen's dues (this expression includes various dues including provident fund) as first charge. 50. The effect of the amendment made in the Companies Act in 1985 is only to expand the scope of the dues of workmen and place them on a par with the debts due to secured creditors and there is no reason to interpret this amendment as giving priority to the debts due to secured creditor over the dues of pro....
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....e EPFO before the Adjudicating Authority for accepting the claim was rejected. In the above case, a revised claim was filed on the basis of an order passed under Section 7Q and Section 14B dated 23.10.2023 which claim was subsequent to the liquidation commencement date. This Tribunal in its judgment dated 30.06.2025 upheld the order of the Adjudicating Authority rejecting the application of the Appellant. This Tribunal in the above case has noted that the claim which was filed on the basis of Section 7A order was admitted in liquidation and subsequent claim which was filed on the basis of order dated 23.10.2023 was not admitted since liquidation has commenced by order dated 28.04.2023. It is useful to notice paragraphs 5 and 6 of the judgment which is as follows:- "5. There is no dispute to the proposition that claim under 7Q and 14B arises after 7A is determined. In the present case, claim under 7A was filed within the time on 28.04.2023, which was admitted. Subsequently, claim under 7Q and 14B arose out of two orders dated 23.10.2023, which claims were subsequent to the liquidation commencement date. In paragraph 9 of the order the Adjudicating Authority has noticed the ....
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....aim in liquidation process was not subject matter of consideration in the above case. Hence, above case does not help the Appellant in the present matter. The Adjudicating Authority however, in the impugned order has observed that the Resolution Professional has to keep track of the Appeal filed by the Corporate Debtor and make necessary arrangements contingent upon the decision of the Appeal. In the application which was filed by the Appellant being IA No.114 of 2023 was an application praying for admission of the claim of the Appellant which was not accepted by the liquidator. We, however, make it clear that non-admission of the claim of the Appellant in liquidation proceeding shall not preclude it from taking such steps as available in law for realisation of its claim which arose after liquidation commencement date. 13. In view of the foregoing discussions and conclusions, subject to what has been said above, the Appeal is dismissed." 15. We now take a look at the Form-C which has been submitted by the SEBI on 20.06.2023 to the Liquidator in respect of their claim in the liquidation of the Corporate Debtor. The same is placed at page 466 of Appeal Paper Book ("APB" i....