The NCLT, Chandigarh Bench noted that the claim in the present case was submitted after 1 year. Regulation 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides for a limitation of 90 days from the Insolvency commencement date for submission of claims. The Tribunal opined that if the said claim is allowed then the entire post-CIRP process would be derailed, and the efforts put in the Insolvency Resolution would be negated. It was expounded that CIRP is a strict time-bound process to maximize the value of the Corporate Debtor. Any admission of claim after the approval of the plan would be in the teeth of the objectives of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”).
Brief Facts:
The present application is filed under Section 60(5)(b) of the IBC seeking acceptance of claims regarding statutory dues of the department by the Resolution Professional and for setting aside the Resolution Plan approved by the Committee of Creditors (hereinafter referred to as “CoC”).
Background of the Case:
A petition under Section 9 of IBC was filed. Thereafter a CoC was constituted. An application for the approval of the resolution plan under Section 31 was filed by the Resolution Professional which was approved by the NCLT. The present claim has been filed after the acceptance of the resolution plan.
The Corporate Debtor was liable to pay VAT and GST Tax as applicable. The Assessee was called and accordingly an assessment order was passed. The Annual Return was filed by the Assessee, but he did not file the audit report for the year 2011-2012. Pursuant to this, an assessment order was passed for payment of additional VAT and CST. An entry for an encumbrance on the property upon the Corporate Debtor was made by the Revenue Department.
Much later, the matter under Section 7 of the IBC was admitted by the NCLT. Respondent No.2 (Resolution Professional) intimated to the department to remove the lien. The Applicant then filed a claim with Respondent No. 2 but his claims were rejected.
Contentions of the Applicant:
It was contended that the rejection of claims was illegal as per Section 25 of IBC and Regulation 14 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It was submitted that the claims are statutory dues and are reflected in the financial statements of the Corporate Debtor. The Resolution Professional ought to have gotten the books audited and checked the assets and liabilities before making a proper resolution plan.
Contentions of the Respondent:
It was argued that the assessment and demand created upon the Corporate Debtor were not in knowledge as the books of accounts were not provided to the erstwhile Resolution Professional. It was further contended that the Applicant did not submit its claims despite there being a public announcement about the CIRP.
Observations of the Tribunal:
It was noted that the claim in the present case was submitted after 1 year. Regulation 12 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 provides for a limitation of 90 days from the Insolvency commencement date for submission of claims.
It was also noted that NCLT does not have the power to review its order.
The Tribunal remarked that if the said claim is allowed then the entire post-CIRP process would be derailed, and the efforts put in the Insolvency Resolution would be negated.
The decision of the Tribunal:
Noting that CIRP is a strict time-bound process to maximize the value of the Corporate Debtor, the application was accordingly dismissed.
Case Title: Excise and Taxation Commissioner, Haryana Sales Tax Department v. Jalesh Kumar Grover, Resolution Professional & Ors.
Coram: Hon’ble Mr. Harnam Singh Thakur (Judicial Member), Hon’ble Mr. Subrata Kumar Dash (Technical Member)
Case No.: IA No. 174/2021 in CP(IB) No. 104/Chd/Hry/2017
Advocate for the Applicant: Adv. Mr. Piyush Bansal
Advocate for the Respondent- Liquidator: Mr. G.S. Sarin, PCS
Advocate for the Successful Resolution Applicant: Adv. Mr. Deepankur Sharma
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