Case: Mr Jai Kumar Rai and Mrs. Supriya Saxena v. Mr. Arun Kapoor In M/s. Capri Global Capital Ltd. v. M/s. Monarch Brookefields LLP, IA No. 3014 of 2021 In CP (IB) 2517(MB) of 2018.
In the realm of corporate insolvency resolution, adherence to regulatory timelines and the authority of resolution professionals play pivotal roles in ensuring the efficiency and fairness of the process. In the present case, The Corporate Insolvency Resolution Process (CIRP) was initiated against M/s. Monarch Brookefields LLP (referred to as the “Corporate Debtor”) through an order by the National Company Law Tribunal (NCLT) Mumbai on 27 September 2019. Following this, the Interim Resolution Professional issued a public announcement on 24 November 2019, inviting claims under regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. The deadline for claim submission was set for 7 December 2019. In November 2021, the applicants submitted their claim to the Resolution Professional, amounting to Rs. 98,83,932, inclusive of interest. However, the Resolution Professional rejected this claim citing delay in filing and the approval of the resolution plan by the Committee of Creditors (CoC).
the issue is raised whether the claim filed by the Applicants was submitted within the stipulated time frame as per the regulations governing the Corporate Insolvency Resolution Process (CIRP).
Adhering to regulatory timelines for claim submission is essential in the CIRP process to uphold regulatory standards and facilitate the smooth functioning of the resolution process. The authority of the Resolution Professional to admit late claims is subject to the interpretation of relevant regulations and judicial pronouncements, balancing the interests of all stakeholders involved in the resolution process.
The NCLT emphasized the time-bound nature of the Corporate Insolvency Resolution Process (CIRP), highlighting its significance in maximizing value for all creditors involved. It stressed that the approval status of the resolution plan by the Adjudicating Authority does not warrant revisiting the process, preventing CIRP from becoming an indefinite procedure.
After considering the arguments and legal precedents presented by both parties, the NCLT concluded that the claim could not be entertained at a belated stage when the resolution plan had already received unanimous approval from the Committee of Creditors (CoC) and awaited approval from the Adjudicating Authority. The NCLT expressed that allowing late claims at this stage could disrupt the resolution process, adversely affecting the successful resolution applicant. Consequently, it dismissed the application filed by the Applicants, affirming the decision not to entertain the claim due to its timing in relation to the resolution plan’s approval status.

Author of this article:
Adv. Ravish Bhatt,
Partner, R&D Law Chambers,
Dual Qualified Lawyer Solicitor | International Tax Affiliate

Connect with Mr. Bhatt on Linkedin: https://www.linkedin.com/in/adit-ravishbhatt/

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