Intec Capital Limited vs Rakesh Phull

IN THE MATTER OF: Intec Capital Limited CIN: L74899DL1994PLC057410 708, Manjusha Building, 57, Nehru Place, New Delhi-110010 IBC@inteccapital.com Phone No. 7838777046 ...Appellant

Versus

Rakesh Phull Resolution Professional Shivam Continental Pvt Ltd IBBI/IPA-003/IP-N00122/2017-18/11305 P-602, Jalandhar Heights, 66 FT Road, Jalandhar, Punjab ...Respondent

Present: For Appellant : Mr. Rachit Mittal, Manish Kumar, Parish Mishra, Kanishk Raj, Adarsh Srivastava, Abhishek Sinha, S. Bansal, Advocate.

For Respondent : Ms. Mayuri Raghuvanshi, Advocate.

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)] The present Appeal under Section 61 of Insolvency and Bankruptcy Code,

2016 has been filed by the Appellant against dismissal of IA/1523/2024 by the Adjudicating Authority (Chandigarh Bench) dismissing the claim rejection

application. Appellant prays to allow the present Appeal and set aside order

dated 21.01.2025 passed by the Chandigarh Bench in IA/5431/2024 in

CP(IB)/420/(CHD)/2019 and direct the Respondent to admit the claim of the

Appellant as Secured Financial Creditor as already admitted by Corporate

Debtor in their Audited Balance Sheet.

Appellant's case:

2. The Appellant - Financial Creditor is a Non-Banking Financial Institution

("NBFC") incorporated on 15th February, 1994 and is in the business of financing

small and medium enterprises for acquisition of Machinery, Loans against

Machinery or other business purposes. Primary security for loan is exclusive

charge on the machine(s) purchased by the Debtors using the funds or any other

movable asset. The Appellant also obtains Corporate Guarantees from the

borrowers in order to secure the credit facilities advanced to the Borrowers. In

the year 2012 Shivam Continental Private Limited has taken over the running

business of M/s Shivam International with all its assets and liabilities and

further recorded the same in the amended MOA. In the same year 2012, M/s

Shivam International had availed the loan facilities for their business from the

Appellant. The Appellant had sanctioned the loan facility for the sum of

Rs.1,42,00,000/- (Rupees One Crore Forty-Two Lakhs Only) by issuing the

Sanction Letter dated 24th September, 2012. Pursuant to the aforesaid Sanction

Letter dated 24.09.2012, the Appellant and M/s Shivam International (now

Shivam Continental Private Limited) had duly executed the Loan Agreement

Company Appeal (AT) (Insolvency) No. 587 of 2025 2 of 25 dated 27.09.2012 along with other transitional documents. Further in order to

secure the financial facility, M/s Shivam International had created the first

charge by way of exclusive hypothecation lien mark on the Invoice in favour of

Intec Capital Limited covering the entire assets. Meanwhile in the Year, 2013 the

Corporate Debtor/Shivam Continental Private Limited had approached the

Appellant for availing the fresh financial facility for financing the assets.

Pursuant to that, the Appellant had sanctioned the fresh Loan facility for the

sum of Rs.43,00,000/- (Rupees Forty-Three Lakhs Only) vide Sanction Letter

dated 28.03.2013. Pursuant to the aforesaid Sanction Letter dated 28.03.2013,

Appellant and the Corporate Debtor had duly executed the Loan Agreement

dated 30.03.2013 along with other transitional documents. Further in order to

secure the financial facility, the Corporate Debtor had created the first charge by

way of equitable mortgage in Plot measuring 5 Marlas and 100 sq. ft. out of Plot

16 (Marla and 100 sq. ft.) comprised in Khasra No. 733, 734, 735, 738, 739, 736,

737, 740 falling within the revenue estate at the Village Basti Danghmanda,

Mandi.

3. In the year 2015, M/s Shivam International failed to meet its obligations

towards repayment of loans as per its schedule. Subsequently, in the year 2015

the Appellant was constrained to issue the Notice of Termination dated

07.04.2015 calling for initiation of Legal Action. However, M/s Shivam

International failed to honour the loan recall notice. Soon thereafter, an

Company Appeal (AT) (Insolvency) No. 587 of 2025 3 of 25 Arbitration Proceedings were initiated and an Arbitral Award dated 25.09.2015

was passed by the Ld. Sole Arbitrator in favour of Appellant.

4. Further in the Loan Account bearing No. LNJAL01112-130001689 in the

name of Shivam International the Appellant has received the last payment of

Rs.31,37,250 on 16.12.2013 vide Cheque Instrument No. 000254 and in the

Loan Account No. LNJAL01112-130002238 in the name of Shivam Continental

Private Limited.

5. Out of two loan facilities one was closed by the Appellant i.e. of Corporate

Debtor after receiving the balance payment and the Appellant has issued the "No

Dues Certificate" dated 04.11.2016 with respect to the loan account of Shivam

Continental Private Limited (Corporate Debtor herein) in the Loan Agreement No.

LNJAL01112-130002238 dated 30.03.2013 mentioning the detail of another

active loan bearing Loan Agreement No. LNJAL01112-130001689 with respect

to M/s Shivam International merged with Shivam Continental Pvt. Ltd. The said

"No Dues Certificate" was duly acknowledged by the Respondent.

6. The Appellant on 01.03.2023 had received the intimation letter from IRP

with respect to the commencement of Corporate Insolvency Resolution Process

of Shivam Continental Private Limited along with Form-A i.e., paper publication

from Ms. Shalu Khanna (Interim Resolution Professional) requesting for the

submission of claim if any. Subsequently, the Appellant had filed its Claim Form-

C on 11.04.2023 along with all the supporting documents. Later vide Email

Company Appeal (AT) (Insolvency) No. 587 of 2025 4 of 25 dated 21.04.2023 the Interim Resolution Professional had requested for certain

documents for verifying the claim. Subsequently IRP was changed/replaced with

another RP vide order dated 13.04.2023 by Adjudicating Authority. Thereafter,

another Email dated 02.05.2023 was sent by present Resolution Professional for

certain clarification/documents and the same was duly replied by the Appellant

on 09.06.2023. Even after submitting the required details/documents an email

dated 11.06.2023 was received from the Resolution Professional commenting his

opinion that the Appellant do not qualify as a Financial Creditor in respect to the

Corporate Debtor and has not included the Appellant as a member of COC till

date.

7. Resolution professional opinion that the claim filed by appellant/INTEC

capital limited is erroneous on the following grounds:

7.1. Assets and liabilities of M/s Shivam International was taken over by

the Corporate Debtor and the same is recorded in amended MOA.

7.2. The loan was granted to proprietorship firm on 27th September,

2012, therefore, there was no need for the registration of charge on the

MCA.

7.3. The loan liability of M/s Shivam International was taken over by

Shivam Continental Private Ltd. and the same has been acknowledged by

the CD company (Shivam Continental Private Ltd.) in the Balance Sheets

for the year 2012-13, 2013-2014.

Company Appeal (AT) (Insolvency) No. 587 of 2025 5 of 25 7.4. In the Balance Sheet for the year 2012-13, 2013-2014, two loans

were reflected one in the name of Intec Capital Limited which was taken

by M/s Shivam International for the sum of Rs. 1,42,00,000/- and another

in the name of Intec Capital Limited 2 which was taken by Shivam

Continental Private Limited for the sum of Rs. 43,00,000/-.

7.5. In the "No Dues Certificate" dated 04.11.2016 it is clearly mentioned

that one loan is active and will be continued and the same was duly

acknowledge by the Respondent.

7.6. Upon rejection of the claim by the Resolution Professional, Appellant

preferred an Application before the Adjudicating Authority. Vide order

dated 21.01.2025 Hon'ble Adjudicating Authority had dismissed the

IA/1523/2024 filed by the Appellant.

7.7. Adjudicating Authority had duly acknowledged the fact in its

findings that Balance sheet of the Corporate Debtor that collateral security

has been reflected in the balance sheet as on 31.03.2013 and the balance

sheet of the Corporate Debtor as on 31.03.2014 also reflects both the loans

as well as collateral security. The relevant para of the findings of the

Adjudicating Authority is reproduced here:

"Thus both the loans as well as collateral money has been reflected in the balance sheet of the corporate debtor as on 31.03.2013. The next year balance sheet of the Corporate

Company Appeal (AT) (Insolvency) No. 587 of 2025 6 of 25 Debtor as on 31.03.2014 also reflects both the loans as well as collateral security for it."

7.8. Adjudicating Authority in its finding at para 15 of the impugned

order had inferred that the loan extended by the Appellant was taken over

by the Corporate Debtor, para 15 of the findings of Adjudicating Authority

is reproduced hereunder:

"It is worthwhile to note that neither the terms of the takeover agreement dated 01.04.2012 nor the balance sheet of Shivam International as on 31.03.2012 has any mention about the loan, which was subsequently extended by the Applicant to Shivam International, from which it can be inferred that the loan extended by the Applicant was taken over by the Corporate Debtor."

7.9. Adjudicating Authority in its finding in para 16, stated that

Adjudicating Authority is not inclined to accept the argument of the

Appellant that loan extended by the Applicant to Shivam International,

was taken over by the Corporate Debtor, and hence rejected the claim of

the Appellant as Financial Creditor of the Corporate Debtor.

7.10. Adjudicating Authority in its finding has duly acknowledged the fact

that balance Sheet of the Corporate Debtor for the year 2013 and 2014

has dismissed the appeal on ground that claim filed by the Appellant filed

before the Resolution Professional is beyond the period of 90 days from the

commencement of CIRP as per Regulation 12(2) of IBBI 2016; before the

Company Appeal (AT) (Insolvency) No. 587 of 2025 7 of 25 Second Amendment dated 18.09.2023 that Regulation 12(2) of the IBC,

2016 is reproduced herein for bare perusal:

"Regulation 12(2) A Creditor, who fails to submit claim with proof within the time stipulated in public announcement, may submit the claim with proof to the interim resolution professional or the resolution professional, as the case may be, on or before the ninetieth day of the insolvency commencement date."

8. In the present case Appellant had duly filed its claim on 11.04.2023, along

with all documents before the Interim Resolution Professional, further Interim

Resolution Professional as well as, Resolution Professional raised certain queries

which was duly replied by the Appellant vide email dated 09.06.2023. It is

claimed that Appellant had filed its claim along with proof within the limitation

period as per IBC Code, 2016 and therefore the Appeal be allowed.

Respondent-RP's case

9. Respondent-RP contends that the Appellant has been concealing the

material documents. The Appellant claims that M/s Shivam International was

taken over in the year 2011 by the Corporate Debtor by a Memorandum of

Association [Pgs. 117-126, Volume I]. However, the Appellant did not place on

record the copy of the takeover agreement dated 01.04.2012 that clearly states:

"2. That the consideration for vesting of the said business has been settled at Rs.103.38 lacs being the net worth as computed as per the balance sheet of the first party completed as on 31.03.2012 whereby all its assets and liabilities have been evaluated at book values thereof. The company shall satisfy this consideration by issuing to the proprietor of the party of first part equity shares of

Company Appeal (AT) (Insolvency) No. 587 of 2025 8 of 25 Rs.10/- each at par to the value of the sum of Rs. 103.38 lacs in the share capital of the company credited as fully paid up. Nothing will be payable hereafter on another count or pretext and this consideration encompasses absolute and total consideration for all the obligations of the erstwhile business known as M/s Shivam International."

10. Pertinently, the aforementioned clause was reproduced in paragraph 13

[Pg. 57, APB] in the impugned order and the NCLT took note that neither the

takeover agreement dated 01.04.2012 nor the balance sheet of M/s Shivam

International as on 31.03.2012 mentioned the loan, which was subsequently

extended by the Appellant to M/s Shivam International and the business of M/s

Shivam International was taken over by the Corporate Debtor along with all

assets and properties for a consideration of Rs.103.38 lakh being the net worth

as computed as per the balance sheet of Shivam International as on 31.03.2012.

As per clause 2 of the Takeover agreement dated 01.04.2012, the liability of the

Corporate Debtor towards M/s Shivam International was restricted upto

31.03.2012 and that nothing thereafter stood payable by the Corporate Debtor

encompassing absolute and total consideration for all the obligations of the

erstwhile business known as M/s Shivam International till the date 31.03.2012.

Thus, the NCLT held that there was no document on record from which it can

be inferred that the loan as extended by the Appellant to the Shivam

International was taken over by the Corporate Debtor. Despite the fact that the

takeover agreement dated 01.04.2012 formed the basis of the impugned

Company Appeal (AT) (Insolvency) No. 587 of 2025 9 of 25 judgment, the Appellant suppressed the takeover agreement and did not place it

before this Hon'ble Tribunal.

11. The takeover agreement was also relied upon by the erstwhile Resolution

Professional while rejecting the claim of the Appellant. By an email dated

11.06.2023 [Pg. 419, APB], the Appellant was duly informed by the erstwhile

Resolution Professional that as per the takeover agreement M/s Shivam

International was taken over by the Corporate Debtor along with all assets and

properties for the net worth and liabilities as computed as per the balance sheet

of M/s Shivam International as on 31.03.2012. However, the subsequent loan

extended by the Appellant to M/s Shivam International did not exist in the

financial statements of the M/s Shivam International for the Financial Year

2011-2012 and was therefore not a part of the assets and liabilities taken over

by the Corporate Debtor. Despite this, the Appellant did not place the

aforementioned take over agreement before this Hon'ble Tribunal.

12. Further, a demand promissory note dated 27.09.2012 was executed by

M/s Shivam International in favour of the Appellant. The said demand

promissory note clearly reflects that the proprietor is the guarantor for the loan

extended to the Shivam International and the Corporate Debtor is neither the

borrower nor guarantor even when it is executed after the takeover agreement

dated 01.04.2012. The impugned judgment has extracted the aforementioned

demand promissory note dated 27.09.2012 in paragraph 9(iii) [Pg. 54 APB].

Company Appeal (AT) (Insolvency) No. 587 of 2025 10 of 25 However, the Appellant also did not place on record the said promissory note.

Thus, the Appellant has failed to approach this Hon'ble Tribunal with clean

hands, by concealing the documents that were interpreted against the Appellant

by the NCLT.

13. Respondent-RP also claims that the Claim of the Appellant is rightly

rejected. Neither the clauses of the Takeover Agreement dated 01.04.2012 nor

the balance sheet of M/s Shivam International as on 31.03.2012 has any

mention about the loan, which was subsequently extended by the Appellant to

M/s Shivam International, from which it cannot be inferred that the loan

extended by the Appellant was taken over by the Corporate Debtor. More

specifically, Clause 2 of the takeover agreement dated 01.04.2012 provides that

no further payment will be incurred by the Corporate Debtor for any reason, as

the agreement fully settles all obligations of the former business known as M/s

Shivam International. In view of the same, the loan sanction provided to M/s

Shivam International by the Appellant was never part of the takeover agreement

dated 01.04.2012 and the Corporate Debtor had never intended to take over any

liability of M/s Shivam International (proprietorship concern) after 01.04.2012.

Even the IRP of the Corporate Debtor informed the Appellant on 11.06.2023, [Pg.

419, APB] that no entry of the loan granted by the Appellant existed in the

financial statements of FY 2011-12 of Shivam International, and therefore the

said loan was not a part of the assets and liabilities taken over by Corporate

Debtor from Shivam International. The reliance on the balance sheets by the

Company Appeal (AT) (Insolvency) No. 587 of 2025 11 of 25 Appellant [Pg. 420-442, APB] is misplaced in view of the takeover agreement

dated 01.04.2012 and in the demand promissory note dated 27.09.2012 only the

proprietor is the guarantor for the loan extended to the Shivam International.

The Corporate Debtor was neither the mortgagor nor the guarantor of the loan

extended by the Appellant and therefore the balance sheets relied upon the

Appellant cannot be taken as a conclusive proof to establish the status of

Appellant as financial creditor of the Corporate Debtor. In view of the above, the

Resolution Professional as well as the impugned order rightly rejected the claim

of the Appellant.

14. Even the Arbitral Award dated 05.09.2015 [Pgs. 231-250, APBI] held that

Shivam International and its sole proprietor along with the guarantors who were

arrayed as Respondents in the arbitral proceedings were jointly and severally

liable to refund the amount of Rs.1,71,27,755/- to the Appellant [Pg. 248-249,

APB]. The Corporate Debtor was not a party to the said arbitral proceedings [Pg.

231-232, APB]. The impugned judgement in paragraph 16 held that the loan

extended by the Appellant is at best the liability of the sole proprietor of the M/s

Shivam International and the Appellant may resort to appropriate legal remedies

to recover the same [Pg. 58-59, APB]. Thus, the claim of the Appellant cannot be

included as the claim against the Corporate Debtor as admittedly legal remedies

are available to the Appellant against the sole proprietor of the M/s Shivam

International.

Company Appeal (AT) (Insolvency) No. 587 of 2025 12 of 25

15. Respondent-RP has also canvassed the arguments of delay. The Corporate

Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor

on 23.02.2023 [Pgs. 99-113, APB] and a moratorium was imposed in accordance

with Section 14 of the IBC. In compliance with the provisions of IBC, the then

Interim Resolution Professional issued a public announcement in Form-A on

25.02.2023, inviting claims from the creditors of the Corporate Debtor, with the

last date for submission being 09.03.2023. The Appellant submitted its claim to

the Interim Resolution Professional on 11.04.2023 [Pgs. 410, APB], asserting its

status as a financial creditor of the Corporate Debtor on the basis of a credit

facility allegedly sanctioned to M/s Shivam International on 24.09.2012 [Pgs.

127-130, APB], subsequent to the purported takeover of M/s Shivam

International's business by the Corporate Debtor. In view of the above, the

erstwhile IRP/Resolution Professional, upon receipt of the claim, sought

clarifications from the Appellant, particularly in light of the fact that the alleged

business takeover occurred on 01.04.2012, while the basis of the Appellant's

claim was a sanction letter dated 24.09.2012 [Pgs. 127-130, APB]. Despite

several requests and reminders issued by the IRP/RP for submission of requisite

documents to enable collation and verification of the claim, the Appellant

furnished certain documents and clarifications only on 09.06.2023 [Pgs. 417-

418, APB], resulting in a delay of 106 days from the CIRP commencement date.

Upon receipt of the said information, and after careful examination of the

documents and submissions made by the Appellant, the erstwhile Resolution

Professional, after due consideration, communicated the rejection of the Company Appeal (AT) (Insolvency) No. 587 of 2025 13 of 25 Appellant's claim as a financial creditor of the Corporate Debtor vide email dated

11.06.2023 [Pgs. 419, APB]. Undisputedly, the Appellant did not challenge the

rejection for almost one year as the I.A. No. 1523 of 2024 was filed only on

03.06.2024.

16. Meanwhile in the 19th meeting of the CoC held on 06.03.2024, the

Resolution Plan submitted by M/s Kazmi Enterprises was duly approved and the

Resolution Professional filed IA (Plan) No. 7 of 2024 on 06.04.2024 before the

NCLT, seeking approval of the aforementioned Resolution Plan.

17. Therefore, the NCLT rightly relied on RPS Infrastructure Ltd. v. Mukul

Kumar, (2023) 10 SCC 718 and held that the claim of the Appellant was belated

before the NCLT and the mere fact that the NCLT has yet not approved the plan

does not imply that the plan can go back and forth, thereby making the CIRP an

endless process. This would result in the reopening of the whole issue,

particularly as there may be other similar persons who may jump onto the

bandwagon.

18. The Appellant contends that the present case is distinguishable from RPS

Infrastructure Ltd. (supra) on the ground that the matter therein did not involve

consideration of a takeover agreement. However, it is pertinent to note that the

core issues in the present proceedings--specifically, the approval of a belated

claim and the maintainability of an application under Section 60(5) of the

Insolvency and Bankruptcy Code during the pendency of an application seeking

Company Appeal (AT) (Insolvency) No. 587 of 2025 14 of 25 approval of the resolution plan--are identical to those adjudicated in RPS

Infrastructure Ltd. (supra). Significantly, the application filed by the

Respondent for approval of the resolution plan, bearing reference

IA(IBC)(PLAN)/7(CH)2024, remains pending before the Hon'ble NCLT and is

currently listed for hearing on 02.06.2025.

Appraisal

19. Heard the counsels of both sides and also perused the material placed on

record.

20. The present Appeal has been filed by the Appellant against dismissal of

IA/1523/2024 by the Hon'ble Adjudicating Authority (Chandigarh Bench)

dismissing the claim rejection application. Appellant prays to allow the present

Appeal and set aside order dated 21.01.2025 passed by the Hon'ble Adjudicating

Authority, Chandigarh Bench in IA/5431/2024 in CP(IB)/420/(CHD)/2019 and

direct the Respondent to admit the claim of the Appellant as Secured Financial

Creditor as already admitted by Corporate Debtor in their Audited Balance Sheet.

21. To appreciate the issues involved, we are recapitulating the chronology in

this case as follows:

23.02.2023 Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor.

25.02.2023 Interim Resolution Professional issued a public announcement in Form-A

With the last date for submission of claims being 09.03.2023

Company Appeal (AT) (Insolvency) No. 587 of 2025 15 of 25 01.03.2023 Appellant received letter from the office of IRP, stating to file claim as suspended board of directors had informed IRP that CD is having liability against Appellant.

11.04.2023 Appellant filed its claim before the IRP asserting its status as a financial creditor of the Corporate Debtor on the basis of a credit facility allegedly sanctioned to M/s Shivam International on 24.09.2012.

13.04.2025 IRP was replaced and RP Mr Rajiv Khurana was Appoint be Hon'ble Adjudicating Authority.

02.05.2023 RP Requested and raised certain queries for verification of claim. Particularly in the light of the fact that the alleged business takeover occurred on 01.04.2012, while the basis of the Appellant's claim was a sanction letter dated 24.09.2012.

09.06.2023 Appellant after gathering all the information regarding the queries raised by the RP, duly replied to the same.

Appellant furnished the documents and clarifications only on 09.06.2023 [Pgs. 417-418, Volume III], resulting in a delay of 106 days from the CIRP commencement date.

11.06.2023 RP rejected the claim on ground Intec Capital Limited does not qualify as a financial creditor in respect to Corporate Debtor.

06.03.2024 In the 19th meeting of the CoC held on 06.03.2024, the Resolution Plan submitted by M/s Kazmi Enterprises was duly approved and the Resolution Professional filed IA (Plan) No. 7 of 2024 on 06.04.2024.

IA(IBC)(PLAN)/7(CH)2024, remains pending before the NCLT.

Company Appeal (AT) (Insolvency) No. 587 of 2025 16 of 25 14.06.2024 Upon rejecting claim, Appellant filed IA before Adjudicating Authority Hon'ble NCLT Chandigarh Bench bearing W1523/24.

Appellant did not challenge the rejection for almost one year as the I.A. No. 1523 of 2024 was filed only on 03.06.2024.

21.01.2025 The said IA was heard and dismissed by Adjudicating Authority.

22. Adjudicating Authority has concluded that at best it can be a loan to the

proprietorship firm namely Shivam International while giving its ruling as

follows:

"15. It is worthwhile to note that neither the terms of the takeover agreement dated 01.04.2012 nor the balance sheet of Shivam International as on 31.03.2012 has any mention about the loan, which was subsequently extended by the Applicant to Shivam International, from which it can be inferred that the loan extended by the Applicant was taken over by the Corporate Debtor.

16. In view of the above discussion, we are not inclined to accept the argument of the Applicant that the loan extended to Shivam International was taken over by the Corporate Debtor and therefore his claim as a financial creditor need to be accepted. At the best, the loan extended by the Applicant to Shivam International may fall under the category of loan to Mr. Chander Bhushan, Proprietor of Shivam International, for which the Applicant may resort to the appropriate legal remedies.

17. Further, in the present case, in terms of Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as "the Insolvency Regulations"), the public announcement in Form-A was made by the IRP on 24.02.2023, according to which the last date for submission of the claims is 09.03.2023 as shown below:

XXX

Company Appeal (AT) (Insolvency) No. 587 of 2025 17 of 25 However, the Applicant has filed its Claim in Form-C dated 04.04.2023 along with the supporting documents on 11.04.2023, which is after the last date mentioned in the public announcement. Further, the additional documents requested by the IRP vide Email dated 21.04.2023 and by the RP Mr. Rajiv Khurana vide Email dated 02.05.2023 were submitted by the Applicant only on 09.06.2023.

According to Regulation 8 of Insolvency Regulations, a person claiming to be a financial creditor is required to submit the claim with proof to the IRP and Regulation 12 of Insolvency Regulations prescribes that a creditor shall submit claim with proof on or before the last date mentioned in the public announcement. Although, a proviso inserted by Notification No. IBBI/2023-24/GN/REG/106, dated 18.09.2023 (w.e.f. 18.09.2023) provides that a creditor, who fails to submit claim with proof within the time stipulated in the public announcement, may submit his claim with proof to the IRP/RP up to the date of issue of request for resolution plans under Regulation period of ninety days from the insolvency commencement. However, the above proviso would not be applicable in the present case. In view of the above, it is clear that the claim has been filed by the Applicant beyond the stipulated time period prescribed under the Insolvency Regulations.

18. Further, the proceedings under Section 94 of the Code would not have any bearing upon the liability of the Corporate Debtor in the present case, if at all there is any liability of personal guarantor of Corporate Debtor, the same would be addressed in the final order of the Section 94 Application."

23. In the instant case we find that that the Corporate Insolvency Resolution

Process (CIRP) was initiated against the Corporate Debtor on 23.02.2023. In

compliance with the provisions of IBC, the then Interim Resolution Professional

issued a public announcement in Form-A on 25.02.2023, inviting claims from

Company Appeal (AT) (Insolvency) No. 587 of 2025 18 of 25 the creditors of the Corporate Debtor, with the last date for submission being

09.03.2023.

24. The Appellant submitted its claim to the Interim Resolution Professional

on 11.04.2023, asserting its status as a financial creditor of the Corporate

Debtor on the basis of a credit facility allegedly sanctioned to M/s Shivam

International [proprietorship of the Suspended Director] on 24.09.2012,

subsequent to the purported takeover of M/s Shivam International's business

by the Corporate Debtor. The erstwhile IRP/Resolution Professional, upon

receipt of the claim, sought clarifications from the Appellant, particularly in light

of the fact that the alleged business takeover occurred on 01.04.2012, while the

basis of the Appellant's claim was a sanction letter dated 24.09.2012. After

several requests and reminders issued by the IRP/RP for submission of requisite

documents to enable collation and verification of the claim, the Appellant

furnished certain documents and clarifications only on 09.06.2023, resulting in

a delay of 106 days from the CIRP commencement date. Upon receipt of the said

information, and after careful examination of the documents and submissions

made by the Appellant, the erstwhile Resolution Professional, after due

consideration, communicated the rejection of the Appellant's claim as a financial

creditor of the Corporate Debtor vide email dated 11.06.2023, the extract of

which is reproduced as below:

Company Appeal (AT) (Insolvency) No. 587 of 2025 19 of 25 We also note that undisputedly, the Appellant did not challenge the above

rejection of the claim by the RP for almost one year as the I.A. No. 1523 of 2024

was filed only on 03.06.2024.

25. Meanwhile in the 19th meeting of the CoC held on 06.03.2024, the

Resolution Plan submitted by M/s Kazmi Enterprises was duly approved and the

Resolution Professional filed IA (Plan) No. 7 of 2024 on 06.04.2024 before the

NCLT, seeking approval of the aforementioned Resolution Plan.

26. During the hearing of appeal, Respondent had argued on the point that

Appellant was aware of the takeover of M/s Shivam International by Corporate

Company Appeal (AT) (Insolvency) No. 587 of 2025 20 of 25 Debtor on 04.06.2015 yet the same fact was not disclosed with the Hon'ble

Arbitrator who passed the award in favour of Appellant and against M/s Shivam

International. Appellant brings to our notice that Appellant was for very first time

informed by the Corporate Debtor of the said takeover of M/s Shivam

International on 04.06.2015. It was also brought to our notice that Arbitration

award was passed on 05.09.2015 and pleading in the said arbitration was

completed and case was pending before the Arbitrator for pronouncement by

that time and there was no occasion for Appellant to appraise the Arbitrator

regarding the takeover of M/s Shivam International.

27. We also note that a demand promissory note dated 27.09.2012 was

executed by M/s Shivam International in favour of the Appellant. RP argues that

the said demand promissory note clearly reflects that the proprietor is the

guarantor for the loan extended to the Shivam International and the Corporate

Debtor is neither the borrower nor guarantor even when it is executed after the

takeover agreement dated 01.04.2012, the impugned judgment has extracted it

and the Appellant also did not place on record the said promissory note and thus

the Appellant has not come with clean hands, by concealing the documents that

were interpreted against the Appellant by the NCLT.

28. We find that the NCLT held that the claim of the Appellant was belated

before the NCLT and the mere fact that the NCLT has yet not approved the plan

Company Appeal (AT) (Insolvency) No. 587 of 2025 21 of 25 does not imply that the plan can go back and forth, thereby making the CIRP an

endless process. We don't find any infirmity in this conclusion.

29. We also find that the NCLT rightly relied on RPS Infrastructure Ltd. v.

Mukul Kumar, (2023) 10 SCC 718 and held that such a belated acceptance can

make the CIRP an endless process. This would result in the reopening of the

whole issue, particularly as there may be other similar persons who may jump

onto the bandwagon. The Appellant contends that the present case is

distinguishable from RPS Infrastructure Ltd. (supra) on the ground that the

matter therein did not involve consideration of a takeover agreement. However,

it is pertinent to note that the core issues in the present proceedings--

specifically, the approval of a belated claim and the maintainability of an

application under Section 60(5) of the Insolvency and Bankruptcy Code during

the pendency of an application seeking approval of the resolution plan--are

identical to those adjudicated in RPS Infrastructure Ltd. (supra) and therefore

this doesn't support the case of the Appellant.

30. The main ground of the Appellant is that Corporate Debtor in its audited

balance sheet for the year 2013-2014 has admitted and acknowledged the loan

of M/s Shivam International as well as the loan given by appellant to Corporate

Debtor as two entries in the name of Intec Capital Limited. The said entries are

reflected under the head "LONG TERM BORROWING SECURED LOANS FROM

BANK INTEC CAPITAL LIMITED FOR SUM OF Rs 1,35,18,313.55/-" AND INTEC

Company Appeal (AT) (Insolvency) No. 587 of 2025 22 of 25 CAPITAL LIMITED-2 FOR SUM OF RS.40,68,176.06/-. However, the

Adjudicating Authority did not accept the argument of the Appellant that loan

extended by the Applicant to Shivam International, was taken over by the

Corporate Debtor, and hence rejected the claim of the Appellant as Financial

Creditor of the Corporate Debtor. We note that the Hon'ble Supreme Court of

India, in its decision in the matter of IL&FS Financial Services

Limited v. Adhunik Meghalaya Steels Private Limited, Civil Appeal No.

5787 of 2025 dated July 29, 2025 ("Adhunik Judgment"), held that balance

sheets, when read in conjunction with corporate debtor's financial statements

(especially cash flow statements) from previous years, constituted as a valid

acknowledgment of debt under Section 18 of the Limitation Act, 1963

("Limitation Act"), even where the name of the relevant financial creditor is not

specifically mentioned in the balance sheet of the corporate debtor. This has

been relied upon by the Appellant and we observe that it fully supports their

case. We also observe that there has been acknowledgement by corporate debtor

as well as suspended board of directors. From the material placed on record it

is noticed that the Appellant was informed by the corporate debtor/ Suspended

Board of directors for the very first time on 04.06.2015 via email by one Mr

Rajesh who was employee of the Corporate Debtor, stating that M/s Shivam

International is not anymore in existence and Corporate Debtor has taken over

the said loan hence requested to merge the loans. Suspended board of director

Chander Bhushan was also marked CC in the said mail, hence the Corporate

Debtor as well as suspended board of director had acknowledged the liability and Company Appeal (AT) (Insolvency) No. 587 of 2025 23 of 25 takeover of the loan of M/s Shivam International by Corporate Debtor.

Furthermore, we also observe that one of the Promoter/Personal Guarantor of

the Corporate Debtor namely Ms. Sunita Dogra Alias Sunita Rani has filed an

application under section 94 of Insolvency and Bankruptcy Code, 2016 for PIRP,

which is pending before the Hon'ble NCLT Chandigarh Bench bearing

CP(IB)/52/(CHD)/2024 wherein she has admitted/ acknowledged the fact that

the Corporate Debtor has dues against the Appellant. That the Personal

Guarantor in its pleadings in Part III of the Application had mentioned that the

Appellant is a creditor of Personal Guarantor as well as of Corporate Debtor. (@

Pg 45-47 of Rejoinder). In the said Personal Insolvency matter, RP Mr. Deepak

Thukral was appointed and has filed its report under section 99 of IBC,2016

wherein Resolution Professional has also acknowledged the fact that the

Appellant is the creditor of the Corporate Debtor and their exists liability of

Corporate Debtor as well as Personal Guarantor towards Appellant. (@Pg 74 of

Rejoinder). Thus, we find that Personal Guarantor/ Promoters of the Corporate

Debtor has admitted the fact that Corporate Debtor has dues against the

Appellant. Thus, the promoters of the corporate debtor have duly acknowledged

the liability and have also acknowledged the fact that loan of the Shivam

International was taken over by the Corporate Debtor. Thus, we find no doubt

about the debt and it is also reflected in the Balance Sheets of the Corporate

Debtor. These facts support the case of the Appellant but from the circumstances

in the case we find that the rejection of its claims has not been challenged timely

and in the meantime resolution plan has been approved by the CoC and now Company Appeal (AT) (Insolvency) No. 587 of 2025 24 of 25 pending before NCLT for approval. We find that the Appellant has not been

diligent enough in following up his claim before the RP and NCLT and at this late

stage it has woken up. The merit of above case could have been looked into by

the Adjudicating Authority, had they been presented timely not belated .. But at

this stage, to re-start the process of the CIRP, we also don't find sufficient cause

which is to be done in a time bound manner and cannot be reopened at this

stage.

31. In the facts and circumstances of the case we are constrained to not agree

with the grounds raised by the Appellant due to undue delay in challenging its

claim which was rejected by the RP almost a year earlier. Appeal is therefore

dismissed. All related IAs are also disposed of. No order as to costs.

[Justice N Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical)

New Delhi.

January 09, 2026.

pawan

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