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Judgment
(Hybrid Mode)
[ORAL JUDGMENT: Justice Sharad Kumar Sharma, Member (Judicial)]
The Appellant herein, questions the propriety of the impugned order dated 03.12.2024, that has been rendered by the Ld. NCLT Chennai, in IA/1972(CHE)/ 2024 in CP/104A/IB/2018, whereby the claim, which was submitted by the Appellant before the Liquidator, has been directed to be rejected, on account of the fact that it was preferred at a much belated stage, and also on account of the fact that, the liquidation process has already been completed, the disbursal as provided under Section 53 of the I & B Code, 2016, has been brought to an end on 05.05.2022 by filing of Form H. It was observed that no claim could have been entertained at that stage due to the non-availability of fund, apart from the fact that it was raised at a belated stage. Challenging the said order, the Appellant is before this Appellate Tribunal.
Facts of the case are that the Commercial Tax Department, through the Assistant Commissioner (ST) of Arisipalayam Assessment Circle, held an assessment proceeding as against the Corporate Debtor, M/s. Jaimurugan Textiles Limited for the assessment years 1995-96 to 2004-2005, 2011/12 to 2014-15, and 2016-17. The assessment orders, proceedings were issued on various dates from 22.11.2016 to 19.10. 2020.
During the aforesaid assessment proceedings being carried by the Assistant Commissioner, Sales Tax, a liquidation order of the Corporate Debtor happened to be passed in MA/544/IB/2018, as rendered in the CP/104A/(IB]/CB/2018. Consequent to the order of 18.12.2018, and the Corporate Debtor was directed to be placed under liquidation. In continuation to the order of liquidation, the Liquidator had proceeded with issuance of Form B, by making a public announcement on 21.12.2018 for invitation of claims.
In accordance with the terms of publication that, was made by the Liquidator, the last date for submission of the claim, was fixed as 17.01.2019. The Appellant, in response to the publication, had preferred a claim at a much belated stage, even after the expiry of the last date as prescribed in the publication for submission of the claim, by filing it before the Liquidator only on 19.11.2020. The claim thus submitted by the Appellant on 19.11.2020 was responded by the Liquidator vide his letter dated 28.11.2020 by stating that the last date for submission of claims was 17.01.2019, that based on the claims received, he had already prepared the final list of stakeholders and has submitted the same to Ld. NCLT, that since the list of stakeholders has already been submitted by the Liquidator before the Ld. NCLT, any modification to the said list by admission of the claim as preferred by the Appellant by filing the same on 19.11.2020, will not be possible until and unless there happens to be a prior approval of the Ld. Adjudicating Authority for acceptance of the claim, and that if at all the Appellant requires the determination of his claim to be considered, which has been submitted at a belated stage, they will have to approach the Ld. Adjudicating Authority for obtaining a suitable directions for amending the stakeholders' report. This option to approach Ld. Adjudicating Authority, admittedly, was never resorted to by the Appellant.
Questioning the said letter of 28.11.2020, which will tantamount to be a rejection of his claim by the Liquidator, the Appellant had invoked the provisions contained under Section 42 of the I & B Code, 2016, by filing of an application in the shape of an appeal, before the Ld. Adjudicating Authority on 23.09.2024, praying for setting aside the order of rejection of claim and further to admit the claim. Section 42 of the I & B Code, 2016, reads as under:
Appeal against the decision of liquidator.—A creditor may appeal to the Adjudicating Authority against the decision of the liquidator 1 [accepting or] rejecting the claims within fourteen days of the receipt of such decision.
If the intention of the legislation as contained under Section 42 of the I & B Code, 2016, is taken into consideration, it has specified that for the purposes of preferring of an appeal as aggrieved as against an order of rejection, which admittedly in the instant case happened to be of 28.11.2020, which is admitted to have been received by the Appellant on 04.12.2020, he ought to have preferred an appeal within the prescribed limitation period as statutorily contemplated under Section 42 of the I & B Code, 2016, which envisages providing of 14 days of limitation for filing of an appeal. The object of imposition of 14 days of limitation under Section 42 of the I & B Code, 2016, is with an intention to ensure that, the process of liquidation with the settlement of claims itself is given a final shape, at the earliest in order to meet the time-bound framework of the provisions contained under the I & B Code, to meet its legislative objective.
Apparently, the order of rejection happens to be of 28.11.2020. The invocation of Section 42 of the I & B Code, 2016, which was ultimately registered as IA/1972(CHE)/ 2024, was preferred only on 23.09.2024, i.e., almost after three years and nine months. Filing of the said application under Section 42 of the I & B Code, 2016, after the lapse of three years and nine months is contrary to the objective of the code, and also in derogation to the very intention of Section 42 of the I & B Code, 2016.
Further, the rejection of the same by the Ld. Adjudicating Authority by the impugned order has been rightly rendered for the reason being that even before the filing of an application under Section 42 of the I & B Code, 2016, the process of liquidation has already been laid to rest and is shown to have attained finality by filing of Form H on 05.05.2022, which is much prior to filing of the appeal under Section 42 of the I & B Code, 2016, by the Appellant. Merely because of the fact that the Appellant has preferred an application at a belated stage by filing the same on 23.09.2024, exclusively at the behest of the Appellant, the entire process of liquidation, which has already been culminated, cannot be permitted to be rejuvenated to be started denovo, for consideration of the claim of the Appellant, which he himself has preferred at a belated stage, knowing the fact about the rejection of his claim, which was already conveyed to him by the Liquidator.
Apart from the fact that the claim was preferred at a belated stage, contrary to the applicable law of limitation prescribed under Section 42 of the I & B Code, 2016, it also deserves rejection because, as on date when the appellate provision was invoked, by the Appellant, nothing much was left in the proceedings to be decided upon, which may ultimately result in admission of a fresh claim, which couldn't have been possible owing to the fact that the disbursal of the proceeds have already been completed under Section 53 of the I & B Code, 2016, and the liquidation has been laid to rest.
Thus, the reason which has been assigned by the Ld. Tribunal that, at the stage when the appeal was preferred under Section 42 of the I & B Code, 2016, accompanied with a condoned delay application being IA. No. 1974 of 2024, that there would be no fruitful purpose to entertain the application, is justified and correct as per law.
Owing to the fact that, the Appellant was trying to beat around the dead wood, which otherwise cannot be permitted to be reactivated at his behest by the filing of an appeal after lapse of more than three years & nine months, the rejection of the applications by the impugned order of 03.12.2024, do not call for any interference by this Appellate Tribunal. The appeal lacks merit, and the same is accordingly dismissed. All interlocutory applications would stand closed.