M/s. RPS INFRASTRUCTURE LTD. V/S MUKUL KUMAR & ANR. [CIVIL APPEAL NO. 5590 OF 2021]
The Supreme Court held that belated claims filed by a creditor cannot be entertained by the Resolution Professional after approval of the Resolution Plan by the Committee of Creditors but prior to the approval by the Adjudicating Authority.
“Mere fact that the Adjudicating Authority 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,” the Division Bench of Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia said.
The appellant filed an application under Section 60(5) of the IBC. During the pendency of respondent’s application for approval of the plan before the Adjudicating Authority, seeking directions to respondent that the appellant’s claim may be considered on merits.
This relief was granted to the appellant by the Adjudicating Authority. The authority held that appellant’s claim could not have summarily rejected, as this claim would have appeared in the Corporate Debtor’s books of accounts. In case such books of accounts were not available, the respondent had a duty to obtain them and verify the financial position. As such an announcement was made through public newspapers, it was likely that the appellant missed out on the same.
The challenge by the respondent before the NCLAT was primarily based on the potential consequences of allowing such a belated claim when the COC had already approved the Resolution Plan. The appellant having made the claim more than a year after the invitation of claims by the public notice dated 30.03.2019; it was urged that allowing such claims would set the clock back on the CIRP and set a precedent, thereby making CIRP prolonged and inefficacious.
The appellant explained that it could not file the claim in time as it was unaware of the public announcement. A belated claim should not be shut out as the time-periods in the IBC are merely directory and not mandatory.
Section 15 of the IBC and Regulation 6 of the IBBI Regulations mandate a public announcement of the CIRP through newspapers. This would constitute deemed knowledge on the appellant. In any case, their plea of not being aware of newspaper pronouncements is not one which should be available to a commercial party.
The Apex court held that, “the NCLAT’s impugned judgment cannot be faulted to reopen the chapter at the behest of the appellant. We find it difficult to unleash the hydra-headed monster of undecided claims on the resolution applicant.”
The ruling was delivered by the Bench of Supreme Court comprising Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia.