The Applicants filed an application before the NCLT Mumbai in a petition pending under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the Corporate Debtor (Monarch Brookefields LLP), seeking directions to condone the delay in filing their claim and admit the same. The same was moved after the Resolution Plan has been unanimously approved by the Committee of Creditors (CoC) and while the Resolution Plan was pending the approval of the NCLT.

Brief facts:

1. The Corporate Insolvency Resolution Process (CIRP) against Monarch Brookefields LLP was initiated vide order dated 27.09.2019 and the IRP had issued a public announcement inviting claims under Regulation 6 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 on 24.11.2019. The last date for submission of claim vide the said was 07.12.2019.
2. The IRP further issued a public announcement dated 25.02.2021 for inviting Expression of Interest from prospective resolution applicants and two plans were put to vote before CoC and one of the plans were unanimously approved by the CoC on 15.11.2021.
3. It was claimed by Applicants that they became aware of the CIRP of Monarch Brookfields LLP only on 18.11.2021 and a claim was filed on 18.11.2021 itself. On 19.11.2021, their claim came to be rejected by the IRP on the ground of delay. It was further informed to the Applicants that the resolution plan had already been approved by the CoC and their claim could not be entertained at such a belated stage.

The Ld. NCLT held as under : -

1. The delay in filing the claim cannot be condoned on emotional pleas of the Applicants.
2. Public Announcement of the CIRP of Corporate Debtor made through newspapers u/s 15 of the Code constitutes 'deemed knowledge' on the Applicant and therefore, ignorance of CIRP cannot be pleaded as a justifiable excuse for delay in filing the claim.

While parting with it’s judgement. The Hon’ble Tribunal, emphasized on the importance of completing CIRP process in a time bound manner for achieving the purpose of value maximization for all the creditors, it was observed as under:

“CIRP is a process which is required to be completed in a time bound manner for achieving the purpose of value maximisation for all creditors. .....

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The mere fact that the Adjudicating Authority has not yet approved the plan does not imply that the plan can go back and forth, thereby making CIRP an endless process. This would result in the re-opening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon. Even otherwise, the delay in filing the claim cannot be condoned as the Applicants have not offered any sufficient or satisfactory reason justifying their delay.”

In light of the abovementioned it is pertinent to note that the pendency of the approval of the Resolution before the NCLT would not come in aid of applicants once the Resolution Plan has been approved by the CoC.

If such belated applications are entertained, the Resolution Plan which has been approved by the CoC would be put to jeopardy, and the successful Resolution process which has been achieved would turn out to be futile. The same is in consonance with the purpose and intent of the IBC, 2016.

By - C George Thomas