Sardar Ji Di Hatti Departmental Store ... vs Sunil Kumar Agrawal

[Arising out of order dated 09.03.2021 in I.A. No. 143 of 2021 in Company Petition (IB) 2083 (ND) 2019 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-V]

IN THE MATTER OF: M/s Sardar Ji Di Hatti Departmental Store Pvt. Ltd. CIN: U52100DL2011PTC214820 (Through its Director: Gurjit Singh Having Registered Office At: 1/7, Double Storey, Tilak Nagar New Delhi 110018 Email ID: sjdh.uniform@gmail.com ....Appellant.

Versus

Sunil Kumar Agrawal (Resolution Professional) Registered Address At: E-29, South Extension II, New Delhi 110049 Also At: 904, GF, Sector 7C, Faridabad, 121006 (Haryana) And Email IDs: irpkpg2020@gmail.com, and aggarwalsk21@yahoo.com ....Respondent.

Present:

For Appellant: Mr. Sandeep Thukral and Mr. Gurjit Singh, Advocates.

For Respondent: Mr. Manoj Kumar Garg, Advocate for RP. 2

JUDGMENT

( 7th September, 2021)

Justice Anant Bijay Singh;

This appeal has been preferred by the Appellant (Operational Creditor)

being aggrieved and dissatisfied by the order dated 09.03.2021 in I.A. No. 143

of 2021 in Company Petition (IB) 2083 (ND) 2019 passed by the Adjudicating

Authority (National Company Law Tribunal), New Delhi Bench-V whereby and

where under the Application filed by the Appellant (herein) - 'Operational

Creditor' under section 60 of the Insolvency and Bankruptcy Code, 2016 (for

short IBC) and read with Rule 11 of the NCLT Rules, 2016 and has prayed

following reliefs is hereunder:

" a) Allow the instant application of the Applicant;

b) Issue necessary instructions to the RP to consider the claim

without having any regard to the delay;

c) Pass an order to admit the claim of the Applicant before RP;

and

d) In the meanwhile, direct the RP not to proceed with the

adoption of Resolution Plan (not been approved till today and

the approval of which would render the present application

infructuous), without the admission of the instant claim of the

applicant as the claim was duly presented before the RP at an

appropriate stage which warranted admission as per the

settled law.

Company Appeal (AT) (Insolvency) No. 295 of 2021 3

e) Pass any other order this Hon'ble Tribunal deems fit in the

facts and circumstances of this case."

2. The Ld. Adjudicating Authority rejected the Application filed by the

Appellant (herein) - 'Operational Creditor' with holding as follows:

" 16. For the reasons discussed above, we are of the

considered view that, in view of Regulation 12(2), the prayer

of the applicant is not liable to be accepted. Hence, we,

hereby, unable to give any direction to the RP to consider the

claim of the applicant. Accordingly, the prayer of the

applicant is rejected."

3. The facts giving rise to the instant Appeal is as under:

i) That 'Corporate Insolvency Resolution Process (for short CIRP)

Proceeding commenced against the one M/s KPG International Pvt. Ltd. -

'Corporate Debtor' vide order dated 27.01.2020 and one Mr. Sunil Kumar

Agrawal - (Respondent herein) appointed as Interim Resolution Professional

(for short IRP).

ii) The IRP invited claims from creditors vide publication dated 31.01.2020

till 12.02.2020 against the Corporate Debtor.

iii) The Appellant herein - M/S Sardar Ji Di Hatti Department Store Pvt.

Ltd. missed this publication and was totally unaware of the same. The

Appellant though contacted one of the Directors of the 'Corporate Debtor' -

Mr. Gaurav Mahendru for payment of the due and outstanding amount owed

by the 'Corporate Debtor' to the Appellant but was surreptitiously kept in the

Company Appeal (AT) (Insolvency) No. 295 of 2021 4

dark by the said Director. The Said Director, however, left for Australia

sometime in March 2020.

iv) Further case of the Appellant due to Covid-19 pandemic in March 2020

which prompted the Hon'ble Supreme Court passed the order dated

23.03.2020 in Suo Motu Writ Petition (Civil) No. 3 of 2020 to suspend

limitation period in all petitions, suits, applications, appeals and all other

proceedings whether under General Law of Limitation or under Special Laws

(Both Central and States) with effect from 15.03.2020 till further orders. The

copy of the order of the Hon'ble Supreme Court as marked as Annexure- A-4

at page 38 to 39 of the Appeal Paper Book.

v) The further case of the Appellant is that the Director of the Appellant -

Mr. Gurjit Singh, became aware of the 'Corporate Insolvency Resolution

Process' against the 'Corporate Debtor' during a candid discussion within the

business circles in December, 2020 only and was absolutely shocked to know

about the fact of CIRP having been initiated against the 'Corporate Debtor'.

vi) The Appellant immediately consulted a lawyer for understanding about

the CIRP in general and then decided to submit its claim to the RP for the due

and legit outstanding amount of Rs. 43,45,844/0 owed to it by the 'Corporate

Debtor' ion the prescribed format - 'Form-B' along with Affidavit and proof of

claim - i.e. invoices, E-way bills, certified copy of statement of Account of the

'Corporate Debtor' in tis books of accounts, GST returns, etc. vide speed post

dated 22.01.2020 and also vide email on 24.12.2020.

vii) The Resolution Professional vide email dated 31.12.2020 replied to the

application of the Appellant simply with a remark "Your claim documents is

not received with in time as per IBC, 2016". It was further mentioned in the

Company Appeal (AT) (Insolvency) No. 295 of 2021 5

reply that the Form G for EOI has issued and the Resolution Plan is under

process.

viii) The Appellant followed up with a reply email on 03.01.2021 thereby

requesting the Resolution Professional for admission of the claim, along with

citations and rulings passed by the Hon'ble NCLAT Principal Bench, wherein

the amended Regulation 12(2) of the IBBI (Insolvency Resolution Process for

Corporate Persons) Regulations, 2016 had been held to be directory and not

mandatory and that the claim of the Appellant ought to have been admitted

in view of the settled law as the CIRP was still in progress and no Resolution

Plan had been approved / finalized till date.

ix) Further case of the Appellant is that the time response was received

from an Advocate Manoj Kumar Garg on behalf of RP vide email dated

05.01.2021. while again rejecting the claim, the reason was cited as under:

" Your claim can not be accepted as it was filled/submitted

by delay to RP & already resolution plan was submitted by

one Resolution Applicant to RP which is pending for

consideration by COC"

x) The Appellant thereafter filed the Application bearing I.A. No. 143 of

2021 in Company Petition (IB) 2083 (ND) 2019 before the Ld. Adjudication

Authority and the Ld. Adjudicating Authority under its order dated

09.03.2021 rejected the same after hearing the parties. Hence this Appeal.

Submissions on behalf of the Appellant

4. The Learned Counsel for the Appellant during the course of the

argument while referring to the provisions of the Regulation 12 of Insolvency

Company Appeal (AT) (Insolvency) No. 295 of 2021 6

and Bankruptcy Board of India (Insolvency Resolution Process for Corporate

Persons) Regulations, 2016 reads hereunder:

"12. Submission of proof of claims. - (1) Subject to sub-

regulation (2), a creditor shall submit [claim with proof] on or

before the last date mentioned in the public announcement.

(2) A creditor, who fails to submit claim with proof within the

time stipulated in the 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."

5. Learned Counsel for the Appellant submitted that order dated

01.05.2019 passed by Ld. Adjudicating Authority, NCLT, New Delhi, Principal

Bench in (IB)-737(PB)/2018 have held that the Regulation 12 (2) of the

Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for

Corporate Persons) Regulations, 2016 had already been declared directory

and not mandatory.

6. Learned Counsel for the Appellant further relied on order dated

13.06.2019 passed by Ld. NCLT New Delhi, Principal Bench in (IB)-

1083(PB)/2018 (Edelweiss Asset Reconstruction Co. Ltd. V/s Adel

Landmarks Ltd.) whereby the Ld. Adjudicating Authority had held the

provisions of Section 12(2) of IBC is directory and not mandatory.

7. It is further submitted that the Ld. Adjudicating Authority has failed to

consider these judgments and also fact on which the claim of the Applicant

Company Appeal (AT) (Insolvency) No. 295 of 2021 7

was filed before the Resolution Professional on 22.01.2020 and rejected the

same vide email dated 31.12.2020 with a remark the claim as per the IBC,

2016 is time barred. In much as the Ld. Adjudicating Authority has failed to

apply judicial mind and passed the impugned order, so it is fit to be set aside

and Appeal be allowed.

Submissions on behalf of the Respondent.

8. Learned Counsel for the Respondent during the course of argument and

his Reply Affidavit submitted that as per the own version of the Appellant that

on 12.02.2020 was the last day for submission of claim.

9. It is further submitted that the paragraph 7 (E) of the Appeal Paper

Book the Appellant himself has admitted that the Appellant missed this

publication and was totally unaware of the same.

10. It is further submitted that the Appellant though contacted one of the

Directors of the 'Corporate Debtor' - Mr. Gaurav Mahendru for payment of the

due and outstanding amount owed by the 'Corporate Debtor' to the Appellant

but was surreptitiously kept in the dark by the said Director. The Said

Director, however, left for Australia sometime in March 2020.

11. It is further submitted that in paragraph 7 (H) of the Appeal Paper Book

the Appellant himself has admitted that the about the CIRP in general and

then decided to submit its claim to the RP for the due and legit outstanding

amount of Rs. 43,45,844/0 owed to it by the 'Corporate Debtor' in the

prescribed format - 'Form-B' along with Affidavit and proof of claim - i.e.

invoices, E-way bills, certified copy of statement of Account of the 'Corporate

Company Appeal (AT) (Insolvency) No. 295 of 2021 8

Debtor' in tis books of accounts, GST returns, etc. vide speed post dated

22.01.2020 and also vide email on 24.12.2020 which was rejected by the

Resolution Professional by email dated 31.12.2020.

12. It was further submitted that the Appellant also aware of the CIRP

proceeding which is the apparent from the averments made in the paragraphs

7 (E), (G), (H), (I), (J) & (K) of the memo of Appeal.

13. It is further submitted that the CIRP against the Corporate debtor was

initiated on 27.01.2020 and Mr. Sunil Kumar Agarwal, IRP (Respondent

herein) is appointed.

14. It is further submitted that the IRP has made the public announcement

for inviting claims from creditors upto 12.02.2020 in the newspapers on

31.01.2020 against the Corporate Debtor.

15. It is further submitted that the Corporate Insolvency Resolution Process

is a time bound process and there is a specific time period for submitting the

claim on date of publication which was not followed by the Appellant herein.

Moreover, Regulation 12(2) of the Insolvency and Bankruptcy (Insolvency

Resolution Process for Corporate Person) Regulation, 2016, provide the claim

can be admitted after the commencement of the Corporate Insolvency

Resolution Process within a period of 90 days, but in the present case this

statutory time period is also expired. So the Appellant cannot take the benefit

of the above said Regulation.

16. It is further submitted that the Appellant is well aware about the

insolvency and Bankruptcy Code, 2016 Laws then the Appellant also know

Company Appeal (AT) (Insolvency) No. 295 of 2021 9

that this is a time bound process and time line have to be followed and has

despite have been knowledge of the CIRP, the Appellant failed to submit his

claim within stipulated time. Therefore, the Ld. Adjudicating Authority has

rightly been rejected the Application i.e. I.A. No. 143 of 2021.

17. It is further submitted that the Corporate Debtor received a proposed

Resolution Plan (Revised) on 04.01.2021 by the Resolution Applicant namely,

Rama Gupta and the same was approved by the majority of the Committee of

Creditors holding 80.43% voting share on 13.01.2021 in the 6th COC meeting

(at pages 130 to 150, relevant as 136 of the convenience compilation filed by

Respondent No. 2 in Company Appeal (AT) (Insolvency) No. 444 of 2021).

18. It is further submitted that the taking all these facts have been

mentioned in the analogous Appeal i.e. Company Appeal (AT) (Insolvency) No.

444 of 2021 (Sunil Kumar Agrawal, Resolution Professional, KPG

International Pvt. Ltd. V/s Committee of Creditors, KPG International Pvt. Ltd.

& Anr.) which was heard along with this Appeal.

19. It is further submitted that the Appellant taking recourse of the

different orders of the NCLT which have been passed in the facts of the case

holding that the period of 90 days as per above Regulation is directory and

not mandatory, and the Appellant filed the I.A. No. 143 of 2021 before the

Adjudicating Authority taking ground of Covid -19 Pandemic Lockdown.

20. It is further submitted that the Ld. Adjudicating Authority has

considered all the aspects of the matter and rejected the I.A. No. 143 of 2021.

So, there is no merit in the Appeal and the Appeal is fit to be dismissed.

Company Appeal (AT) (Insolvency) No. 295 of 2021 10

FINDING

21. We have perused the records of the case, considered the arguments

advanced on behalf of the parties and also Reply Affidavit filed on behalf of

the Respondent. The following facts are admitted.

 That on 27.01.2020 (IB) No. 2083/ND/2019 was admitted in respect of

M/s KPG International Pvt. Ltd. - (Corporate Debtor).

 That on 31.01.2020 public announcement of commencement of CIRP

was made in the Newspapers namely Financial Express and Jansatta.

 That on 01.02.2020 the IBBI and ICSI IIP were informed of the

Commencement of CIRP against the Corporate Debtor.

 That on 03.02.2020 IRP sent the communication to the Corporate

Debtor and its Directors about the commencement of CIRP in respect

of Corporate Debtor and sought related documents and information

from them.

 That the intimation of IRP commencement to Financial Institutions /

Bank via letter dated 03.02.2020 to Modern Credit Pvt. Ltd. (Financial

Creditor) regarding commencement of CIRP.

 The appellant submitted claim to the Resolution Professional for the

aforesaid dues but the Resolution Professional vide email dated

31.12.2020 informed that "Your claim documents is not received within

in time as per IBC, 2016 ".

 That the Resolution Professional has also informed that the Form G of

EOI has issued and the Resolution Plan is under process. Company Appeal (AT) (Insolvency) No. 295 of 2021 11

 Paragraph 2(ix) of the impugned order it has also been recorded by the

Ld. Adjudicating Authority that the applicant (Appellant herein) again

on 03.01.2021 requesting for admission of the claim along with the

decisions of the NCLT in which amended Regulation 12(2) of the IBBI

(Insolvency Resolution for Corporate Persons) Regulations, 2016 has

been held to be directory and not mandatory.

 Paragraph 2(x) of the impugned order it has also been recorded by the

Ld. Adjudicating Authority that the Counsel of the Resolution

Professional sent an email dated 05.01.2021 stating that the claim

cannot be accepted as it was submitted by delay to RP and resolution

plan was submitted by one resolution applicant to RP which is pending

for consideration by the CoC.

 In view of the admitted facts and submissions advanced on behalf of

the Respondent and further also averments made by the Learned

Counsel for the Appellant in paragraphs 7 (E), (G), (H), (I), (J) & (K) of

the memo of Appeal which categorically established that the Appellant

was having full knowledge of the CIRP and deliberately not submitted

his claim within time and after expiry of 90 days filed the claim which

was rightly rejected by the Resolution Professional.

ORDER

22. In view of the above discussion, there is no illegality committed by the

Ld. Adjudicating Authority and rightly rejected the I.A. No. 143 of 2021 filed

by the applicant (Appellant herein) in Company Petition (IB) 2083 (ND) 2019.

There is not merit in the Appeal. Accordingly, the order dated 09.03.2021 in

I.A. No. 143 of 2021 in Company Petition (IB) 2083 (ND) 2019 passed by the Company Appeal (AT) (Insolvency) No. 295 of 2021 12

Adjudicating Authority (National Company Law Tribunal), New Delhi Bench-

V, is hereby affirmed. The Appeal is dismissed. No order as to costs.

23. Registry to upload the Judgment forthwith on the website of this

Appellate Tribunal.

24. Registry is directed to send the copy of this Judgment to the

Adjudicating Authority, National Company Law Tribunal, Bench - V, New

Delhi, forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical)

New Delhi

7th September, 2021

R. Nath.

Company Appeal (AT) (Insolvency) No. 295 of 2021