Allahabad Bank Vs Southern Batteries Private Limited (NCLT Bengaluru)
The National Company Law Tribunal (NCLT), Bengaluru Bench, dismissed an application filed under Section 42 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking to challenge the rejection of an operational creditor’s claim by the liquidator and to condone the delay in submission of that claim during the liquidation process. The Tribunal held that the application was barred by limitation both in respect of the delayed filing of the appeal under Section 42 and the delayed submission of the claim before the liquidator.
The Corporate Insolvency Resolution Process (CIRP) against the corporate debtor commenced on 19.02.2020 following admission of a petition under Section 7 of the IBC. Upon failure of the CIRP, the company was ordered into liquidation, and a liquidator was appointed. The applicant, an operational creditor engaged in the manufacture and supply of fibre glass products, claimed that it had supplied goods to the corporate debtor and that an amount of approximately ₹22.96 lakh remained unpaid despite reminders and a legal notice. The creditor had also obtained a decree from the Commercial Court and initiated execution proceedings.
According to the applicant, it became aware of the liquidation proceedings only during the pendency of execution proceedings and subsequently filed its claim before the liquidator in Form C on 09.05.2024. However, the liquidator rejected the claim on 28.06.2024 on the ground that it had been filed 398 days after the prescribed deadline under the Liquidation Process Regulations and that liquidation proceeds had already been distributed under Section 53 of the IBC.
