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Judgment
Harnam Singh Thakur, Member (Judicial)
The present Application is preferred by the applicant namely M/s Concept Infracon Private Limited through Mr. Gaurav Sinha, an authorized representative of the Applicant under section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the National Company Law Tribunal Rules, 2016. In the present application the applicant is seeking relief i.e pending the consideration of the Application i.e. IA No.17/2021, direction to Resolution Professional to provide the applicant a copy of the Resolution Plan. Further direction be given to Resolution Professional to admit the entire claim of applicant, aggregating to Rs.1,19,33,688/- (Rupees One Crore Nineteen Lakh Thirty-Three Thousands Six Hundred and Eighty-Eight only) . The applicant is also seeking direction to reject the Resolution Plan pending before this Tribunal filed by the Resolution Professional under Section 31 of the IBC and consequently direct the resolution professional to put the revised resolution plan before the Committee of Creditors after incorporating the applicant claim in entirety.
The present application is in CP (IB) No.122/Chd/HP/2019 which is admitted by this Tribunal vide order dated December 23, 2019, under Section 7 of the Insolvency & Bankruptcy Code, 2016 filed by the Central Bank of India against M/s Luni Power Company Private Limited (hereinafter referred to as ‘Corporate Debtor’).
It is contended by the applicant that there is contract between the applicant and the corporate debtor. The corporate debtor has placed various work orders to the applicant. The details of the work orders in tabular form are provided as under:-
DESCRIPTION
AMOUNT
Work Order dated April 5, 2013 (including five amendments)
Rs. 3,05,98,145
Work 2013
Order
dated
December
17,
Rs. 91,04,542
Work 2014
Order
dated
December
26,
Rs. 1,00,100
It is submitted by the applicant that amount payable by the corporate debtor is due, crystallised and has been defaulted. The applicant has provided services to the corporate debtor and performed the work as per the satisfaction of the corporate debtor. A copy of the invoices raised by the corporate debtor is attached with the application as Annexure A-8.
It is averred by the applicant that the corporate debtor has admitted for retention of the amount upto Rs.31,29,693/-. However, as per the work order, the said amount was only liable to be retained for the period of six months. The corporate debtor has not even made a single communication disputing the retention amount pending towards the applicant. A copy of the summary of the accounts is attached with the application as Annexure A-9.
It is contended that the applicant on March 20, 2020 filed its proof of claim for total of amount of Rs.1,19,33,688/- (Rupees One Crore Nineteen Lakh Thirty Three Thousands Six Hundred and Eighty-Eight only) to Mr. Sanjay Kumar Aggarwal, Resolution Professional of the Corporate Debtor, both by an e-mail and registered speed post. A copy of e-mail dated March 20, 2020 and speed post receipt dated March 21, 2020 are attached with the application as Annexure A-10.
The respondent has submitted in its reply the timeline demonstrating the active conduct of the Applicant is stated herein under:
DATE
DESCRIPTION
March 20,
2020
Applicant submits claims before the Resolution Professional (Page No. 183 of the Application).
Mode of communication by an Email dated March 20, 2020 (Page No. 184 of the Application)
Proof of registered post receipt dated March 21, 2020 (Page No. 185 of the Application).
July 9,
2020- July
23, 2020
Applicant sends multiple reminders to the Respondent (Page No. 186 of the Application).
Proof of registered post receipt dated July 9, 2020 (Page No. 185 of the Application).
Proof of delivery stated in the tracking report is July 16, 2020 (Page No. 187 of the Application).
August 10,
2020
This Hon’ble Tribunal removed the erstwhile Resolution Professional on account of arrest by CBI (Page No. 191 of the Application) and allowed the Application bearing I.A. 271 of 2020 (Page No. 189-193 of the Application).
October 27,
2020
Email dated October 27, 2020 Applicant sends another reminder to the Respondent. (Page No. 194 of the Application). Proof of registered post receipt dated October 28, 2020 (Page No. 196 of the Application).
Proof of delivery stated in the tracking report is November 4, 2020 (Page No. 195 of the Application).
November 13, 2020
Respondent for the first time replied to the Applicant stating the Resolution plans are to be submitted by 17.11.2020, accordingly sought relevant documents supporting the claim. (Page No. 197 of the Application).
November 16, 2020
The Applicant submitted all the relevant documents vide Email dated November 16, 2020. Attaching the google link, as the files being voluminous in nature. (Page No. 198 of the Application).
November 20, 2020
Respondent rejects the claim of the Respondent to be time barred.
December 11, 2020
This Hon’ble Tribunal extends the time line of CIRP process for another 90 days.
January 1,
2021
The Applicant files an application before this Hon’ble Tribunal.
January 25,
2021
This Hon’ble Tribunal recording the prayers of the Applicant issues notice to the Respondent.
It is submitted that though the Applicant submitted the claim for the first time on March 20, 2020, and kept on sending reminders to the Respondent, there was no reply, whatsoever, by the Respondent. Also, the Respondent on Midnight of November 13, 2020 to November 14, 2020 first time sought documents from the Applicant. Though, the Applicant was not given reasonable time, yet, the Applicant acting diligently replied to the Respondents on November 16, 2020.
It is contended that the respondent had filed an application IA No.797/2020 whereby this Tribunal has granted extension of 90 days for completion of CIRP to the respondent-RP. The claim of the Applicant before the Respondent (March 20, 2020) and application of the Applicant (January 1, 2021) both are filed before the expiry of CIRP period (i.e. March 11, 2021 extend by this Tribunal for 90 days vide Order dated December 11, 2020).
It is submitted by the applicant that there is a breach of Regulation 13 read with Regulation 14 of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Also, there is a breach of duty of the RP as provided under the IBBI (Insolvency Professionals) Regulations, 2016.
It is further submitted that the acts of RP that, the statutory scheme under the IBC, provides that despite the Operational Creditors, not having a right to vote in the CoC meetings, as per Section 24(3)(c) of the IBC, the Operational Creditors have a right to participate in the CoC meetings and also have a right to receive the copy of the Resolution Plan. The said stance has also been upheld by the Hon’ble Supreme Court in the matter of ‘Vijay Kumar Jain versus Standard Chartered Bank and Others [2019 SCC OnLine SC 103]’.
The applicant has relied upon the Hon’ble NCLAT in the case of Mr. Navneet Kumar Gupta, Resolution Professional of Monnet Power Company Limited Versus Bharat Heavy Electricals Limited in Company Appeal (AT) (Insolvency) No. 743 of 2018 has held that Resolution Professional cannot step into shoes of the Hon’ble Adjudicating Authority and thereby reject or accept the claims. The Resolution Professional has to vet and verify the claims submitted by the Resolution Professional. Judgment is attached herewith and marked as Annexure A-1.
In the instant application, the reply has been filed before this Adjudicating Authority on behalf of Sh. Sachin Gopal Jathar, Resolution Professional, appointed vide order dated 10.08.2020, under Section 60(5) of the Code, 2016.
The tabular representation of series events is laid out herein:-
Date
Event
23-12-2019
Initiation of CIRP
26-12-2019
Public Announcement in Form A calling for claims from creditors.
05-01-2020
Last day to submit claims as per the public announcement.
No claim received from the applicant.
25-03-2020
Last day to submit claims as per the regulation 12(2) of CIRP regulations.
No claim as stipulated under Law received from the applicant.
17-10-2020
Issue of Information Memorandum having the list of creditors to the Resolution applicant.
17-11-2020
Resolution application submits the resolution plan to be put to CoC for its approval.
18-11-2020
Claim in accordance to Regulation 7(1) submitted by the applicant vide email.
Kindly refer to Annexure C (Page No.19) of Affidavit in Opposition.
It is alleged by the respondent that the claim of the applicant (Concept Infracon Pvt. Ltd.) was received far later than the due date (i.e. 22.03.2020) of receipt of claims as stipulated under the Code and Regulations thereof and further also after the receipt of the resolution plan from the Resolution Applicant (i.e. 17.11.2020).
It is submitted that in the instant matter the resolution plan was submitted by the Resolution Applicant on 17.11.2020. That applicant for the first time submitted his claim in proper form as mandated under Law on 18.11.2020.
It is contended by the respondent that from the date of issue of public notice (on 26.12.2019) and the extended period of 90 days (25.03.2020) as provided under the Regulation 12(2) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Further, any interruption in the CIRP at this stage by including a delayed claim will mean setting the clock back and sending the matter back to CoC and RP.
It is submitted by the respondent that the resolution plan has already been received and the next stage was approval by the CoC. At this belated stage, if such type of applications is allowed, the resolution plan already received by the RP from the prospective resolution applicants may fail, as those are filed by the prospective resolution applicants on the basis of the Information Memorandum. The respondent has relied upon the Hon’ble Supreme Court in the matter of Arcelor Mittal India Private Limited Vs. Satish Kumar Gupta & Ors. (2019)2SCC1. That the claim of the applicant at this stage ought not to be entertained on grounds of delay and prejudice that shall be caused to the resolution applicant.
The learned counsel for the respondent has also placed reliance on judgment of Hon’ble NCLAT in Company Appeal (AT) (Insolvency) No. 420 of 2021 Harish Polymer Products vs. George Samuel and another dated 18.06.2021, Company Appeal (AT) (Insolvency) No. 1050 of 2021 Mukesh Kumar vs. RPS Infrastructure Limited dated 30.07.2021 and Company Appeal (AT) (Insolvency) No. 583 of 2020 Office of the Asst. Tax Commissioner State Tax Department, Government of Maharashtra vs. Parthiv Parikh and others dated 26.03.2021.
After careful perusal of the record available and submissions made by learned counsel for applicant and respondent, it is a matter of record that the main petition i.e. CP (IB) No. 122/Chd/HP/2019 was admitted on 23.12.2019 and IRP was appointed, who invited claims by making public announcement in Form A and the last date for submissions of claims were mentioned as 05.01.2020. However, the applicant has submitted its claim on 18.11.2020 in accordance with Regulation 7(1), much beyond the stipulated time. It is matter of record that RP has already issued IM to resolution applicant on 17.10.2020.
In view of above facts and circumstances, we are of the considered view that the claim made after the resolution plan has already been received by the Resolution Professional. At that belated stage, if such type 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, if the claim of different creditors are accepted in a phased manner and/or on such belated stage, that too, after the stipulated time so provided for submitting claims, in that event the resolution plans can never get materialized and there would be no resolution of corporate debtor. This will defeat the object of the IB Code, more so, when CIRP is to be completed in a time bound manner. If such claim is accepted, then the Resolution Applicants have to make corrections in their plans, that apart, RP has to make corrections in the IM and its report, correction in the stakeholder list, etc., for which RP has to take permission from this Adjudicating Authority, which may further delay the CIRP. Moreover, CIRP cannot be allowed/extended beyond upper limit of 330 days, in that event the corporate debtor would be compelled to go for liquidation.
Further, if this application is allowed, then, there is every likelihood that the Resolution Applicants may withdraw their plan, as it will be a burden with other huge claims of the creditors, which they might have not planned earlier, while working out the resolution plan based on the Information Memorandum. Thus, under such situation, the corporate debtor may be pushed for liquidation.
The Hon’ble Supreme Court in the matter of Arcelor Mittal India Private Limited Vs. Satish Kumar Gupta & Ors. (2019)2SCC1, unequivocally held that the entire time period within which the CIRP ought to be completed is strictly mandatory in nature and cannot be extended. It relied on the primary objective of the Code, which is to ensure a timely resolution process for the CD and principles of statutory interpretation to hold that the literal language of Section 12 mandates strict adherence to the time frame it lays down. To enable this adherence to the outer time limit provided in the Code, the Code also held that the model timeline provided in Regulation 40A of the CIRP Regulations should be followed “as closely as possible”.
Keeping in view the objective of the I&B Code, 2016, which is meant for resolution of the corporate debtor in time bound manner to maximize value, if such request of applicant is accepted the purpose of I&B Code, 2016 would be defeated.
In the light of the discussion foregoing, we do not find any merit in the application. Accordingly, IA No. 17/2021 stands dismissed.