IBC | Claim Submitted With Proof Cannot Be Overlooked Merely Because It Was Submitted In Wrong Form: Supreme Court

The Supreme Court on Monday observed that the claim submitted by the Resolution Applicant under the Corporate Insolvency Resolution Process cannot be rejected/overlooked merely on the fact that the claim submitted appears to be in a different form other than the form in which the claim needs to be submitted. In the instant case, the resolution application has submitted a claim to the Resolution Professional under Form C of Regulation 8 of CIRP Regulations 2016, as a financial creditor. As to what could form proof of the debt/ claim is delineated in sub-regulation of Regulations 7 and 8 of the CIRP Regulations, 2016.” The Judgment authored by Justice Manoj Misra observed that once a claim is submitted with proof, the RP has to verify the claim, as on the insolvency commencement date, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest in terms of Regulation 12 of CIRP Regulations. “No doubt, the record indicates that the appellant was advised to submit its claim in Form B in place of Form C. But, assuming the appellant did not heed the advice, once the claim was submitted with proof, it could not have been overlooked merely because it was in a different Form.” “Here, the resolution plan fails not only in acknowledging the claim made but also in mentioning the correct figure of the amount due and payable. “Withholding the information adversely affected the interest of the appellant because, firstly, it affected its right of being served notice of the meeting of the COC, available under Section 24 of the IBC to an operational creditor with aggregate dues of not less than ten percent of the debt and, secondly, in the proposed plan, outlay for the appellant got reduced, being a percentage of the dues payable.” When Charge Is Created, Resolution Applicant To Be Placed as Secured Creditor In The Plan “The resolution plan did not specifically place the appellant in the category of a secured creditor even though, by virtue of Section 13-A of the U.P.