In the matter of Daehsan Trading India Private Limited
- CitationIA-1318-IB-2020 in TCP-111-IB-2017
Ratio decidendi
The rule this decision rests on
A claim by a government authority that was not filed before the liquidator within the period fixed by the public announcement cannot be entertained in the liquidation, where the liquidator has already distributed the assets under Section 53 and the matter is time-bound, since the Tribunal will not extend the period for filing a claim merely because the claimant asserts the claim was not known or was delayed without explained reason. The liquidation process is time-bound: the liquidator is required under Regulation 44(1) of the IBBI (Liquidation Process) Regulations, 2016 to complete liquidation within one year of its commencement, and under Regulation 44(2) must explain any non-completion, so that delay in the process is a matter the liquidator must account for and cannot be indefinitely reopened at the instance of a claimant who has not explained its own delay. Limitation in this context admits of no equitable extension: following the Supreme Court's restatement that there is no equity about limitation, a late claim whose delay is unexplained in the application cannot be admitted merely because the claimant had filed its claim with the Resolution Professional during the CIRP.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE NATIONAL COMPANY LAW TRIBUNAL, DIVISION BENCH – I, CHENNAI IA/1318/IB/2020 in TCP/111/IB/2017 (Filed under Section 60(5) of Insolvency and Bankruptcy Code, 2016) In the matter of Daehsan Trading India Private Limited
State of Tamil Nadu State Tax Department Represented by its Assistant Commissioner (ST) Tmt. P. Gangashree., T. Nagar Assessment Circle (FAC) No.46, Greenways Road, Mylapore Taluk Office Building, Third Floor, Chennai – 600 028 … Applicant -Vs- S. Rajendran, Liquidator of M/s. Daehsan Trading India Private Limited 2nd Floor, Hari Krupa, 71/1, Mc Nicholas Road, Chetpet, Chennai – 600 031 M/s. Daehsan Trading India Private Limited No.32, Venkatnarayana Road, Chennai – 600 017 … Respondent
Order Pronounced on 25th January 2024 CORAM SANJIV JAIN, MEMBER (JUDICIAL) VENKATARAMAN SUBRAMANIAM, MEMBER (TECHNICAL) For Applicant : B. Dinesh, Advocate For Respondent : Elamathi, Advocate
O R D E R
(Hearing Conducted through VC) IA/1318/IB/2020 is an application filed by the Applicant under Section 42 read with Section 60(5) of IBC, 2016 seeking relief as follows;
IA/1318/IB/2020 in TCP/111/IB/2017 In the matter of Daeshan Trading India Private Limited a) In view of the above, it is prayed that the impugned communication rejecting the claim of Rs.33,47,67,880/- may kindly be modified and the claim may kindly be ordered to be accepted.
2. This Tribunal vide its order dated 27.03.2018 had ordered for Liquidation of the Corporate Debtor and appointed the 1st Respondent herein as the Liquidator. The Liquidator caused the public announcement on 09.04.2018. The last date for submission of claims was fixed as 26.04.2018.
3. The Applicant herein has not filed its claim before the Liquidator. However, on 20.03.2019, the Liquidator sent a communication to the Applicant stating that as per the Assessment order dated 19.04.2018, a payment of Rs.1,74,245/- has been released to the Applicant in accordance with Section 53(1)(e) of IBC, 2016. Only thereafter, the Applicant on 11.05.2019 preferred the claim before the Liquidator in Form C for a sum of Rs.33.49 Crores.
4. In the 3rd SCC meeting held on 16.03.2019, it was discussed as follows;
4. It may be noted that the Sales Tax Authorities did not file any claim under the Liquidation Process. However, vide letters dated 26th April, 2018, assessment order under CST was issued for Rs.1,74,245/- and notices under VAT was issued for Rs.1,95,81,292/-, Though the Liquidator was not bound to pay any amount to sales tax authorities as no claim was received, he clarified that as a matter of caution and concern on the outstanding to the government authorities, a due process will be followed to determine the amount payable based on the communications received from them after the Liquidation commencement. (emphasis supplied)
IA/1318/IB/2020 in TCP/111/IB/2017 In the matter of Daeshan Trading India Private Limited
5. By the time, the Applicant filed its claim before the Liquidator, the distribution to the stakeholders as per Section 53 of IBC, 2016 has commenced. The distribution as per Section 53 of IBC, 2016 done by the Liquidator is extracted hereunder;
IA/1318/IB/2020 in TCP/111/IB/2017 In the matter of Daeshan Trading India Private Limited
6. It is stated that after distributing the entire amount to the stakeholders as per Section 53 of IBC, 2016, the Liquidator has filed an Application seeking dissolution of the Corporate Debtor and the same is pending adjudication before this Tribunal.
7. The Applicant in his Application has nowhere mentioned the reasons for the delay in filing the claim before the Liquidator. Further, there are no averments made in the Application as to the delay in preferring the claim before the Liquidator. Further, it is noted that the Applicant had filed its claim before the IRP during the CIRP of the Corporate Debtor. So it cannot feign ignorance for not filing the claim before the Liquidator. However, for the reasons best known to them, the Applicant did not file the claim before the Liquidator within the stipulated time period. Further, as per the waterfall mechanism stipulated under Section 53 of IBC, 2016, the Liquidator has distributed the amount to the stakeholders and has also filed an Application seeking dissolution of the Corporate Debtor.
8. This Tribunal is also persuaded by the decision of the Hon’ble NCLAT in the matter of The Deputy Commissioner Commercial Taxes (Audit), Raichur –Vs- Surana Industries Ltd. (In Liquidation) & Anr. in Company Appeal (AT) (Insolvency) No. 1525 of 2019 dated 07.02.2020, wherein the Hon’ble NCLAT dismissed the application filed by the Applicant in relation to the Appeal against the order of the liquidator and also held that liquidation process is a time bound process and the Liquidator has to conclude the proceedings within one year.
IA/1318/IB/2020 in TCP/111/IB/2017 In the matter of Daeshan Trading India Private Limited
9. Under Regulation 44(1) of the IBBI (Liquidation Process) Regulations, 2016, the Liquidator has been directed to liquidate the Corporate Debtor within one year from the date of commencement of the liquidation proceedings. Regulation 44(2) stipulates that, after the expiry of one year, the liquidator shall file an application to the Authority to continue the liquidation period along with a report and explain why the liquidation has not been completed. Thus, it can be seen that the Liquidation is a time bound process and the Liquidator being made accountable is required to explain if there is any delay caused in the liquidation process.
10. The Hon’ble Supreme Court in Gaurav Hargovindbhai Dave – Vs- Asset Reconstruction Company (I) Ltd. & Another in Civil Appeal No. 4952 of 2019, in relation to the aspect of limitation has restated the well-established and well settled principle that “there is no equity about limitation”, we are unable to entertain this Application/Appeal.
11. In view of the reasons as stated above IA/1318/IB/2020 stands dismissed, however without costs.
-Sd- -Sd-
VENKATARAMAN SUBRAMANIAM SANJIV JAIN MEMBER (TECHNICAL) MEMBER (JUDICIAL)
Raymond
IA/1318/IB/2020 in TCP/111/IB/2017 In the matter of Daeshan Trading India Private Limited
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