Virender Singh vs Theme Export Pvt Ltd

NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI COMPANY APPEAL (AT) (INSOLVENCY) No. 34 of 2022 (Arising out of Order dated 12.10.2021, passed by National Company Law Tribunal, Court V, New Delhi, in Company Appeal IBC - 01/ND/2021 in C.P. (IB) No.- 323/ND/2019)

IN THE MATTER OF:

Sh. Virender Singh Office At: F-105, Som Vihar, RK Puram, New Delhi - 110022. ...Appellant

Versus

M/s. Theme Export Pvt. Ltd. Through Liquidator Mr. Vikram Bajaj Having the Registration No. IBBI/IPA- 002/IP-N-00003/2016-17/10003 Office Address & Contact Details of the Liquidator: 308 Pearls Business Park, Netaji Subhash Palace, Pitampura, New Delhi - 110034. ip.themeexport@gmail.com, bajaj.vikram@gmail.com ...Respondent

WITH COMPANY APPEAL (AT) (INSOLVENCY) No. 46 of 2022 (Arising out of Order dated 12.10.2021, passed by National Company Law Tribunal, Court V, New Delhi, in Company Appeal IBC - 07/ND/2021 in C.P. (IB) No.- 323/ND/2019)

IN THE MATTER OF:

M/s. Pepper Craft Through its Proprietor Ms. Nitya Vaishnavi Singh Office at: X-42, (5th Floor) Okhla Industrial Area Phase 2, New Delhi - 110020. ...Appellant

Versus

M/s. Theme Export Pvt. Ltd. Through Liquidator Mr. Vikram Bajaj Having the Registration No. IBBI/IPA- 2

002/IP-N-00003/2016-17/10003 Office Address & Contact Details of the Liquidator: 308 Pearls Business Park, Netaji Subhash Palace, Pitampura, New Delhi - 110034. ip.themeexport@gmail.com, bajaj.vikram@gmail.com ...Respondent

For Appellant: Mr. Yash Srivastava and Mr. Kartikey Sahai, Advocates.

For Respondent: Mr. Abhishek Anand and Mr. Sahil Bhatia, Advocates.

JUDGEMENT

(Per: Shreesha Merla, Member (T))

1. Challenge in this Company Appeal (AT)(Insolvency) No.34/2022 is to

the impugned order dated_12.10.2021 in Company Appeal

IBC/01/ND/2021 connected with Company Petition (IB)-323/ND/2019

passed by the Adjudicating Authority, National Company Law Tribunal,

Court V, New Delhi, dismissing the Appeal preferred by the Appellant herein

against the decision of the Liquidator, rejecting the Claim due to delay in

filing of the same.

2. Succinctly put, the facts in brief are, that the Appellant gave an

unsecured loan of Rs.4,84,00,000/- in January, 2016 to the 'Corporate

Debtor'. While so, CIRP was initiated against the Corporate Debtor

29.8.2019 and the Liquidation Application was admitted on 29.07.2020,

pursuant to which, the Liquidator proceeded with the Public Announcement

on 01.08.2020, giving the last date for submission of Claims as 28.08.2020.

The Appellant filed its Claim in form D on 29.10.2020 and the Claim was

received by the Liquidator on 31.10.2020. It is averred that the Liquidator

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 3

vide Email dated 09.12.2020 rejected the Claim on the ground that the

claim was received belatedly after the lapse of the last date. The Appellant

filed an Appeal before the Adjudicating Authority challenging the decision of

the Liquidator placing reliance on Section 42 of the Insolvency and

Bankruptcy Code, 2016 (hereinafter referred to as the 'I&B Code').

3. The Adjudicating Authority while dismissing the Appeal observed as

hereunder:-

"11. While applying aforementioned provisions over the facts of the present case, it is noted that the present appeal can be filed within fourteen days from the date of receipt of decision of Rejection from the Liquidator, however, the appeal has been filed after 22 days (appeal filed on 31.12.2020 while the rejection was on 09.12.20) which is beyond the time provided in Section 42 IB. Further, there is no rebuttal on the point that the Appellant being husband of the Suspended Director of CD had knowledge of the ongoing CIRP proceedings.

12. We do not find any merit in the pleas taken by the Appellant. Therefore, in the light of the well settled law, the Appellant is unable to show the sufficient cause for condoning the delay in submitting the claim by the Appellant; therefore, the prayer is rejected."

4. Submissions of the Appellant:

• The Learned Counsel strenuously contended that upon directions of

the Adjudicating Authority the Appellant filed an Affidavit dated

16.03.2021, in which it was deposed that the Appellant had come to

know about the Notice of Liquidation Proceedings only in the month of

October, 2020 and did not have any knowledge regarding the Public

Announcement.

• The Appellant being a Senior Citizen, could not, during the pandemic,

immediately meet/contact any counsel or collate the data for filing of

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 4

the Claim as the said data was lying in his Office which was physically

shut down on account of the Covid19 situation. It was only in the last

week of October, 2020 that the Appellant became aware of the

Liquidation Proceedings and was able to collate the required data.

• The Liquidation Proceedings till date has not reached the stage where

the Assets of the Corporate Debtor are distributed and hence no

prejudice would be caused if the Claim of the Appellant is adjudicated

and admitted.

• The Learned Counsel relied on the order dated 08.2.2021 passed by

the Hon'ble Supreme Court in Suo Moto Writ Petition (Civil) No.3 of

2020 in which it was held as follows:

"It is further submitted that Respondent wrongly stated that order dated 08.02.2021 passed by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) No.3 of 2020 is not applicable to the case in hand. It was specifically held that:-

....."2. In cases where the limitation would have expired during the period between 15.03.2020 till 14.03.2021, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 15.03.2021. In the event the actual balance period of limitation remaining, with effect from 15.03.2021, is greater than 90 days, that longer period shall apply."

• It is contended that the ratio of the Hon'ble Supreme Court in

'GPR Power Solution Pvt. Ltd.' Vs. 'Mr. Supriyo Chaudhari'

Civil No.6553 of 2021 dated 29.11.2021 reported in 2021 SCC

OnLine SC 1328 is applicable to the facts of this case as it was

held that the Order 22.3.2020 passed by the Hon'ble Apex

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 5

Court was in effect till 14.03.2021 and hence the said period of

Limitation from 22.3.2020 till 14.03.2021 is to be excluded. The

Learned Counsel placed reliance on the directions given by the

Hon'ble Apex Court in the aforenoted Judgement, that all

litigants whose limitation expired after 22.03.2020 would be

entitled to extension of limitation till the 90th day from

15.03.2021. The Learned Counsel submitted that the Order of

NCLAT in dismissing the Appeal, without considering the effect

and impact of the Orders of the Hon'ble Supreme Court in Suo

Motu Writ Petition, was set aside.

• It is submitted that the Appellant had showed 'sufficient cause'

for not submitting the claim within the prescribed time limit as

the Appellant was not aware of the Liquidation of the Corporate

Debtor. The Learned Counsel also drew our attention of the

relevant portion of the Affidavit filed before the Adjudicating

Authority in support of his case.

5. Submissions of the Respondent:

• The Learned Counsel appearing for the Respondent contended

that the last date of submission of the claim as stated in the

'Public Announcement' was 28.08.2020 and the Respondent/

Liquidator rejected the claim as it was received on 31.10.2020

after the 30 days' time limit prescribed under the provision of

the Code and the Liquidation Process Regulations, 2016.

• The Adjudicating Authority has rightly dismissed the Appeal as

it was filed 22 days beyond the time provided for under the

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 6

Code and also on the ground that there was no rebuttal on the

point that the Appellant, being the husband of the suspended

director of the Corporate Debtor, had knowledge of the ongoing

CIRP proceedings.

• The Learned Counsel placed reliance on Section 38 of the Code

which provides for consolidation of the Claims and Section 38

sub-Section (1) provides that 'the Liquidator shall receive or

collect the claims of the creditors within a period of 30 days from

the date of the commencement of the liquidation process.....'.

Further Regulation 12 (2)(b) of the Liquidation Process

Regulations, 2016 provides that the Public Announcement

issued by the Liquidator shall provide the last date for

submission or updation of claim, within 30 days from the

commencement date.

• The Code provides the fixed time line for each and every activity

to be performed by the Liquidator and the Liquidator is not

empowered to condone the delay in receipt/collation of the

Claims from the Creditors in terms of the Code.

• Delay under Section 42 of the Code can only be condoned if the

Appellant is able to show 'sufficient cause' in filing the Claim

belatedly. The Learned Counsel placed reliance on the following

judgments in support of his case :

o Ramlal V. Rewa Coalfields Ltd AIR 1962 SC 361

o State of West Bengal Vs. Howrah Municipality AIR 1972 SC

749

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 7

o Assistant Commissioner of Commercial Taxes Vs. Right

Engineers & Equipment India (P) Ltd (Company Appeal

(AT)(Ins) No.255 of 2021.

• It is strenuously argued that the Appellant is a related party to

the 'Suspended Director' of the Corporate Debtor and has

deliberately not filed the Claim within the stipulated time lines

and cannot now say that the Appellant was not in the

knowledge of the Liquidation Process having filed their

objections to the Application filed by the RP before the

Adjudicating Authority seeking liquidation of the Corporate

Debtor, which was allowed vide order dated 29.07.2020.

Assessment:

6. It is not in dispute that the last date for submission of the Claims was

28.08.2020 which was specified in the Public Announcement by Liquidation

in compliance with Section 38 of the Code read with Regulation 12 of the

Liquidation Process Regulations, 2016. Regulation 12(2)(b) provides that

'the last date for submission or updation of claims, shall be 30 days from the

liquidation commencement date'. In the instant case, admittedly the

Appellant had preferred their claim on 31.10.2020, after a delay of 64 days.

It is the case of the Appellant that the delay was on account of the pandemic

situation during which period the Appellant being a Senior Citizen could not

contact his counsel and collate the data, apart from not having knowledge of

the Liquidation Proceedings.

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 8

7. The Hon'ble Supreme Court taking cognizance of the situation arising

out of the challenge faced by the country had directed that in cases where

the limitation would have expired during the period between 15.3.2020 till

14.3.2021, notwithstanding the actual balance period of limitation

remaining, all persons shall have a limitation period of 90 days from

15.3.2021.

8. Keeping in view the facts of the attendant case and the observations

made by the Hon'ble Supreme Court in Suo Motu Writ Petition dated

08.03.2021, this Tribunal is of the earnest view that the delay in filing the

Claim before the Liquidator be condoned as this Tribunal is satisfied that

the cause ascribed is reasonable and construes 'sufficient cause'. Without

delving into the merits of the Claim, this Tribunal is of the considered

opinion that the Appellant be given an opportunity to present his Claim

before the Liquidator within a week from the date of this Order. Needless to

add, we have not made any observations regarding the issue of 'Related

Party' or otherwise or touched upon the merits of the Claim. The Liquidator

shall decide the Admission/Rejection of the Claim within a week from the

date of filing of the Claim, in accordance with Law.

9. For all the aforegoing reasons, the impugned order dated 12.10.2021

is set aside and accordingly this Appeal is allowed with the aforenoted

directions.

Company Appeal (AT) (Ins) No.46/2022

10. Similarly, CA(AT)(Ins) No.46/2022 is preferred by M/s Pepper Craft

against the impugned order dated 12.10.2021, whereby the Adjudicating

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 9

Authority has dismissed the Appeal filed by the Appellant herein seeking to

set aside the decision of the Liquidator for rejecting the Claim due to delay

in filing of the same. While rejecting the prayer, the Adjudicating Authority

has observed as follows:

"While applying aforementioned provisions over the facts of the present case, it is noted that appeal can be filed within fourteen days from the date of receipt of decision of Rejection of Claim, however, the appeal has been filed after 42 days (appeal filed on 17.02.2021 while rejection was done on 06.01.2021), which is beyond the time provided in Section 42 IBC.

15. Therefore, in the light of the well settled law, the Appellant is unable to show the sufficient cause for condoning the delay in filing the appeal against the rejection of the claim, therefore, the prayer is rejected."

11. In the instant case, the Liquidator vide Email dated 06.01.2021 has

rejected the Claim on the ground that it was received subsequent to the last

date for submission of Claim which was specified to be 28.08.2020 in the

'Public Announcement' made as per Regulation 31(2) of the Liquidation

Regulations, 2016. A perusal of the material on record shows that the

Appellant has filed an Affidavit before the Adjudicating Authority, dated

16.03.2021, that on account of the ongoing Covid 19 pandemic and taking

care of the elderly having co-morbidities, she could not immediately meet or

contact a Counsel or collate the required data. She was able to collate the

data only in the last week of October, 2020 and the Claim was sent through

Email. On being informed that the Claim was not delivered to the Liquidator,

once again it was submitted through Email on 05.01.2021.

Comp. App. (AT) (Ins) No. 34 and 46 of 2022 10

12. The Adjudicating Authority has rejected the prayer on the ground that

the Appellant has filed the Appeal against the decision of the Liquidator with

a delay of 42 days. Having regard to the reasons cited in Company Appeal

(AT) (Insolvency) No. 34 of 2022 and in the Affidavit filed before the

Adjudicating Authority, this Tribunal is satisfied that the grounds raised

construe 'sufficient cause', to condone the delay in filing of the Appeal before

the 'Adjudicating Authority'. We find it a fit case to grant an opportunity to

the Appellant herein to file their Claim before the Liquidator within a week

from today and the Liquidator shall decide the Admission/Rejection of the

Claim on merits, within a week from receipt of the Claim, in accordance with

Law. It is reiterated that this Tribunal has not made any observations

regarding the merits of the Claim.

13. This Appeal is allowed with the aforenoted directions.

14. The Registry is directed to upload the Judgement on the website of

this Tribunal and send a copy of this Judgement to NCLT (National

Company Law Tribunal, New Delhi) forthwith.

(Justice Ashok Bhushan) Chairperson

(Dr. Alok Srivastava) Member (Technical)

(Ms Shreesha Merla) Member (Technical) New Delhi 24th March, 2022

bm

Comp. App. (AT) (Ins) No. 34 and 46 of 2022