• Devesh Saxena

How to File a Claim before a Resolution Professional in a CIRP? - Complete Guide.

Updated: Jun 10

The Insolvency & Bankruptcy Code, 2016 ("Code") is a one-of-a-kind law that allows a creditor, whether a Financial Creditor[1], an Operation Creditor[2], or the Corporate Debtor[3] itself, to file an application/claim with the jurisdictional National Company Law Tribunal ("NCLT"), requesting that the Corporate Debtor be placed under the Corporate Insolvency Resolution Process ("CIRP").


[Also Read: All about Corporate Insolvency Resolution Process (CIRP) under IBC, 2016]


Further, the word ‘Claim’ has been defined in the Code under Section 3(6) of the Insolvency & Bankruptcy Code, 2016. As per this section, the claim means-

“(a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured.”


According to the Code, the concept of ‘Claim’ comes after the commencement of the CIRP from the date of appointment of the Interim Insolvency Resolution Professional ("IRP"). After the appointment of the IRP, he has to make a public announcement inviting claims from the creditors within 3 three days of the commencement of the CIRP.[4] The announcement has to be published in one English and one regional language newspaper with wide circulation at the registered office and principal/corporate office of the corporate debtor.[5] Along with this, the announcement also has to be published on the website of the corporate debtor[6] and on any website as designated by the Insolvency & Bankruptcy Board of India.[7]


Following the publication of the public announcement, creditors must submit claims to the IRP on or before the last date of submission specified in the public announcement, which cannot be more than 14 days from the date of publication.[8] However, if a creditor misses the 14-day deadline, he can still file a claim before the IRP or RP, as the case may be, on or before the 19th-day after the CIRP begins.[9]


Further, the rejection of claim on the ground of delay is not sustainable because the provisions has been held to be directory and not mandatory.[10] Recently, it has also been held by Hon'ble NCLAT that the claims of those homebuyers who could not file their claims within the stipulated time but the same were reflected in the record of the Corporate Debtor ought to have been included in the information memorandum and the Resolution Applicant ought to have taken note of the same and deal with them in the Resolution Plan.[11]


Therefore, a Creditor(s) may file its claim before the IRP/RP as the case may be, even after the prescribed period, but until the approval of the resolution plan by the Committee of Creditors ("COC"). If the resolution plan is approved by the Adjudicating Authority, then in such case only option for a Creditor(s) is to file an appeal before the NCLAT as per the provisions of the Code, challenging the approved resolution plan on the ground that no person shall be deprived of his property save by authority of law.


FILING OF CLAIM BY AN OPERATIONAL CREDITOR (OC)


Other than the labourers or employees, an operational creditor may submit a claim with proof to the IRP in FORM- B. The OC will be expected to give information such as the Operational Creditor's name, identification proof, and address, as well as the entire amount of the claim and supporting documentation. If there is a pending dispute with the Corporate Debtor, the OC must submit specifics.


FILING OF CLAIM BY A FINANCIAL CREDITOR (FC)


A Financial Creditor who is not a member of a class of creditors may submit their claim to the IRP in electronic form using FORM- C. The FC will be asked to submit information such as the Financial Creditor's name, identification evidence, and address, as well as the entire amount of the claim and supporting documentation. The FC must also present financial statements demonstrating that a debt has not been paid, and/or an order from a court or tribunal that has determined that a debt has not been paid.


FILING OF CLAIM BY A CLASS OF CREDITOR (HOME-BUYER)


A Class of Creditor, typically a homebuyer, may submit their claim in electronic form in FORM CA to the IRP. The Class of Creditors will be asked to supply information such as their name, proof of identification, and the Financial Creditor's address, as well as the entire amount of the claim and supporting papers. The existence of a debt owed to the creditor can be proven using the Information Utility's records or other applicable papers such as an Agreement to Sell, a Letter of Allotment, a Receipt of Payment, Recovery Certificate, and so on. If there is an element of Penal interest in the claim, in such case the penal interest can form part of claim admitted, but no interest is chargeable thereafter.[12] The Class of Creditor must also select an insolvency professional to act as its authorised representative from the three options supplied by the IRP in the public notification.


FILING OF CLAIM BY WORKMEN & EMPLOYEES


Employees or workers of the Corporate Debtor may file a claim (unpaid salary/wages) with documentation to the IRP in FORM D, either electronically or by mail. If there are a large number of employees or workers who need to file a claim, they can do so through an Authorized Representative in FORM E. The existence of dues can be proven using the Information Utility's records; or other relevant documents such as a proof of employment, such as a contract of employment for the period for which such workman or employee is claiming dues; evidence of notice demanding payment of unpaid dues and any documentary or other proof that payment has not been made; or an order of a court or tribunal that has determined that payment has not been made.


FILING OF CLAIM BY OTHER CREDITORS


Other than those listed above, a creditor may file their claim to the IRP or RP, as the case may be, in FORM F, either electronically or by mail. The existence of dues can be proven using the Information Utility's records or other relevant documents such as documentary evidence demanding satisfaction of the claim; creditor bank statements showing non-satisfaction of claim; and, if applicable, an order of a court or tribunal that has adjudicated on non-satisfaction of the claim by the Corporate Debtor.


IMPORTANT POINTS:


  1. One should not submit inflated or wrong claims before the IRP. If a wrong claim is submitted, its cost of verification and cost of determination will be recovered from the Creditor/Applicant. Hence it is advisable to submit the claim form along with an affidavit that the particulars mentioned in the claim form are correct.

  2. A Creditor may withdraw or vary his claim as per Section 38 (5) of the Code within fourteen days of its submission.

  3. Any person who has a right to payment as per Section 3(6) of the Code can file its claim irrespective of the fact whether the same is matured or not at the time of commencement of CIRP.[13]

 

[1] Under Section 7 of the Insolvency & Bankruptcy Code 2016. [2] Under Section 9 of the Insolvency & Bankruptcy Code 2016. [3] Under Section 10 of the Insolvency & Bankruptcy Code 2016. [4] Under Rule 6(1) if the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [5]Under Rule 6(2)(b)(i) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [6] Under Rule 6(2)(b)(iii) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [7]Under Rule 6(2)(b)(iv) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [8] Under Rule 6(2)(c) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [9] Under Rule 12(2) of the Insolvency & Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [10] M/s Edelweiss Asset RecCompany Appeal (AT) (Insolvency) No. 304 of 2017onstruction company Private ltd Vs Adel Landmarks Ltd [(IB)- 1083(PB)/2018].

[11] Puneet Kaur v. K V Developers Pvt. Ltd. and others [CA(AT) (Insolvency) No. 390 of 2022].

[12] Central Bank of India Vs Ravindra and Ors. [2001 ( 4 ) Suppl. SCR 323]

[13] Export Import Bank of India and Ors Vs Resolution Professional JEKPL Private limited and Ors [Company Appeal (AT) (Insolvency) No. 304 of 2017] & Andhra Bank Vs M/s FM Hammerle Textiles Ltd. [Company Appeal (AT) (Insolvency) No. 61 of 2018].

 

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