Liability of Corporate Debtor should be included in Information Memorandum regardless of delay in filing claims: NCLAT

The National Company Law Appellate Tribunal (NCLAT) recently held that the liabilities of the Corporate Debtor should be included in the Information Memorandum, regardless of any delay by the Financial Creditors in filing their claims. [Puneet Kaur v KV Developers Private Limited & Ors.].The Bench comprising of Justice Ashok Bhushan, Shreesha Merla and Naresh Salecha observed that unless all liabilities of the corporate debtor are not known or included in the Information Memorandum, the occasion to complete the Corporate Insolvency Resolution Process (CIRP) shall not arise."The liabilities which have been undertaken by the Corporate Debtor, huge money received by the Corporate Debtor from Homebuyers, whose claims, which could not be filed within time, could not be wished away by the Resolution Professional, on the convenient ground that claims have not been filed by such Homebuyers. The purpose of CIRP of Corporate Debtor is to find out all liabilities of the Corporate Debtor and take steps towards resolution", the judgment stated. .The NCLAT also placed responsibility on the Resolution Professional to include such claims which are reflected in the record of the corporate debtor in the Information Memorandum and the Resolution Applicant to take note of the liabilities and appropriately deal with them in the Resolution Plan..The judgment came on an appeal moved by homebuyers who are financial creditors against the order the National Company Law Tribunal refusing to entertain their claims against the corporate debtor on the ground of delay in submitting their claims. .Advocate Mahesh Kumar appearing for the appellants, submitted that even though they did not file their claims within the time prescribed, the details of their allotment and the payments made by them already existed in the record of the corporate debtor.Therefore, he contended that, the Resolution Professional should have included their claims in the Information Memorandum prepared under Regulation 36 of CIRP Regulations as liabilities to the corporate debtor. .Senior Advocate Abhinav Vasisht, appearing for the Resolution Professional, refuted these arguments stating that since the appellants failed to file their claims within the stipulated time frame, the Resolution Professional committed no error by not including them in the list of creditors. Placing reliance on the judgment of NCLAT in Mukul Kumar vs. M/s RPS Infrastructure, he submitted that once the Resolution Plan gets approved by the Committee of Creditors (CoC), new claims cannot be entertained..The NCLAT observed that as the law exists today, financial creditors who do not submit their claims within the stipulated time cannot be included in the List of Creditors and that too after approval of the resolution plan by CoC. As such, it did not find any ground to interfere with the order of the NCLT rejecting the application for admission of their claim. However, going by Section 31(1) of the Insolvency and Bankruptcy Code, the NCLAT found that there is no extinguishment of claim of the appellants on approval of Plan by the CoC..Looking at the procedure for filing of claim by financial creditors, the NCLAT noted that a large number of homebuyers are unable to file their claim within the time due to various genuine reasons.The Tribunal noted that Regulation 36(2) of the IBC obliges the Resolution Professional to include the details of corporate debtor regarding assets and liabilities.Further, Regulation 36(2)(l), provides a column for other information which the Resolution Professional deems relevant to the CoC.Therefore, the NCLAT opined that when the allotment letters have been issued to homebuyers and payments have been received, the liability towards those those homebuyers who have not filed their claim exists and must be required to be included in the Information Memorandum. "Even though, Interim Resolution Professional/Resolution Professional are not obliged to include the name of such Homebuyers, who have not filed the claim within the time in their List of Creditors, but there is no reason for not collating the claims of such Homebuyers whose claims are reflected from the records of the Corporate Debtor, including their payments and allotment”, the judgment stated. .In the instant, the NCLAT directed the Resolution Professional to submit the claims of homebuyers whose details are reflected in the records of the Corporate Debtor to the Resolution Applicant, on the basis of which Resolution Applicant shall prepare an addendum to the Resolution Plan, which may be placed before the CoC for consideration. .[Read Judgment]