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Judgment
O R D E R
23.09.2022: The appeal under Section 61(1) of Insolvency & Bankruptcy Code, 2016 is filed challenging the order dated 15.07.2022 passed by the Adjudicating Authority (National Company Law Tribunal, Cuttack Bench) in IA (IB) No. 1/CB/2022 in TP No. 255/CTB/2019.
The appellant on 05.01.2019 had filed a claim in the liquidation process of Costal Projects Ltd. (“Corporate Debtor”) for an amount of Rs.15,03,97,715/-. The Respondent Liquidator of the Corporate Debtor accepted, however, only for an amount of Rs. 3,55,53,289/- out of total amount of Rs.15,03,97,715/-. The basis of the said rejection was untenable, unsubstantiated and the letter communicating said rejection was bereft of any cogent reasons whatsoever. Despite various communications by the Appellant, the Respondent Liquidator did not elaborate upon the reason for said rejection of the Appellant’s claim.
The petitioner raised several contentions regarding the validity of the order passed by liquidator in filing an application before the Adjudicating Authority in impugned order, the same is dismissed.
Learned Counsel of the Resolution Professional submits that they filed an I.A before the Adjudicating Authority on 12.02.2019 where following prayers have been made:
a)Direct the liquidator of the Corporate Debtor to reconsider the claim of the petitioner and admit the amounts so claimed as debt payable by the Corporate Debtor to the petitioner herein;
b)Direct the liquidator to pay such amount as may be found due and payable upon such reconsideration;
c)Direct the official liquidator to pay the admitted sum of Rs. 3.55 crores as admitted in its email dated February 12, 2019, being Annexure ‘E’ to the instant application;
d)Direct the official liquidator to pay the balance sum of Rs. 11.48 crores as due and payable by the corporate debtor to the petitioner;
e)Delay, if any, in making this application may be condoned.
f)Pass such further and/or other order or orders and/or direction as this Hon’ble Tribunal may deem fit.
This appeal was dismissed and aggrieved by the order, the appellant preferred the appeal under Section 61 of IBC.
At this stage of hearing, this court raised a query about the maintainability of application before the Adjudicating Authority against an order passed, rejecting part of its claim passed by the liquidator and communicated the same when the appeal is to be preferred against such order, under Section 42 of IBC, within 14 days from the date such communication of the order.
The Learned Counsel contends that instead of filing an appeal an interlocutory application is filed challenging the order passed by Liquidator by invoking Section 60 (5) of IBC.
Section 42 enables the Corporate Debtor to file either against rejection or admission of claim by Liquidator when a claim is filed under Section 38 and after verifying under Section 39, passed an order under Section 40 either rejecting or admitting the claim on Corporate Debtor during process of liquidation.
Instead of filing an appeal within 14 days i.e. under Section 42 conveniently circumventing the law, appellant filed an application under Section 60 (5) after more than 10 months 8 days from the date of communication order. The limitation of 14 days starts from the date of communication of the order but nowhere it is mentioned about the date of communication.
The documents filed along with this appeal, the communication dated 12.02.2019 by email clinching by established that the order of rejection of part of its claim was communicated to this appellant immediately after the rejection of the payment.
The appellant addressed a letter dated 25.05.2019 almost after two months i.e. exactly of 21/2 of months from the date of communicating an order passed by the liquidator and later on, there is correspondence between the appellant and liquidator. Similar letter addressed to the liquidator to explain reason for rejection of part of claim of the appellant. But no fruitful purpose was served. Thereupon appellant filed an Interlocutory application under Section 60 (5) before the Adjudicating Authority.
By the date of addressing firstly on 25.05.2020 the limitation for filing an appeal under Section 42 was expired and therefore addressing the letter after communicating the order on 12.02.2019 would not serve any purpose and it could not extend limitation.
Hence, the application filed before the Adjudicating Authority even if it is treated an appeal under Section 42 is hopelessly barred by limitation. Therefore, on the ground of limitation the dismissal of the Interlocutory application before the Adjudicating Authority can be sustained.
The Liquidator raised a specific plea about the limitation and this was answered in favour of the Liquidator while deciding the Interlocutory application, therefore, the dismissal of the interlocutory application against the order of Adjudicating Authority in IA (IB) No. 1/CB/2022 in TP No. 255/CTB/2019 did not suffer from any illegality, warranting interference by this Tribunal while exercising power under Section 61 of IBC consequently this appeal is liable to be dismissed.
In the result, the application is dismissed.