Tag Archives: Claims under Insolvency

Filing of Claims during Liquidation


In an earlier post here, we have discussed filing of claims during corporate insolvency resolution process. In this post, we will discuss filing of claims during liquidation process of corporate persons. During liquidation process for a corporate debtor following forms of the IBBI (Liquidation Process) Regulations 2016 are prescribed to file claims by creditors:

  • Operational Creditors –Form C
  • Financial Creditors – Form D
  • Workmen and Employees (individually) – Form E
  • Workmen and Employees (for All) – Form F
  • Claims by other stakeholders – Form G

Most fields of these forms are identical. In case your claim is complicated or have a good amount of money involved, it is advisable to seek help of a good professional. 

The liquidation process starts after failure of the resolution process of corporate person. In the liquidation process, a creditor is required to file claims within 30 days from the date of the liquidation order. Practically, a creditor may have not more than 14-21 days from the receipt of information of the initiation of liquidation process.

Liquidation Order: Day 0

Receipt of the copy of order by Liquidator – Day 3-5

Public Announcement of Liquidation and Invitation of Claims – Day 5-10

Last Day of filing Claims – Day 30

The liquidator has no power to accept claims after 30 days. All creditors failed to file claims within these 30 days must apply the Adjudicating Authority (National Company Law Tribunal) to condone delay.

All these claim amount shall be calculated as on Liquidation Commencement Date.

The affidavit with the claim form shall be attested by Notary Public.

Common points in these Forms

Common FieldsSource of Information
Name and address of LiquidatorForm Public Announcement
Name and Address of ClaimantYour identity proofs/ loan agreements/Invoices

Certificate of Incorporation/GST details
Identification Number of ClaimantPAN/ GSTN / CoI / UID (Aadhar)
Address of ClaimantLatest Bank Statement/ Telephone or Mobile Bill/ UID (Aadhar)
Email of ClaimantIf you are not a frequent user of email, please provide your most used email address as you need to check this email address almost daily to stay updated.
  
Details of documentsList of all relevant documents
Details of any dispute as well as the record of pendency or order of suit or arbitration proceedings
Details of how and when debt incurredPlease write one paragraph summery of the default
FC – why loan taken, securities, loan disbursal,  loan period interest and due dates OC – what goods or services provided and for which period, details of period of default with first and last invoice
real estate buyers – Allotment letter, agreement to sale, details of payment made
Details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claimDetails if any
Details of the bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution planPlease check your cheque book: account number, type of account, Bank name and branch address, IFSC Code, Swift Code etc
List of documents attached to this proof of claim in order to prove the existence and non-payment of claim due to the operational creditorThis will be good if proper file is prepared with proper index and page numbering.
Signature of creditor or person authorised to act on his behalfPlease attach proper authorisation.
Address of person signingAddress Proof – UID/Bank statement/ mobile or telephone bill/ Electricity bill
Liquidation commence datePublic Announcement

In the case of company or limited liability partnership, the declaration and verification shall be made by the director/manager/secretary and in the case of other entities, an officer authorised for the purpose by the entity].

Amount of Claim

In case of operational Creditor: please check and attach invoices, ledger, commercial agreement, Memorandum of understanding, contracts etc. Copy of proper ledger is strongly advisable. Where any interest is claim document like MSME registration or agreement should be attached. Interest for MSME operational Creditors 18% after first 45 days.

In case of a claim by financial creditors: Please check and attach sanction letters, loan agreement, inter-corporate loan agreement, RBI – FEMA Documentation in case of loan from foreign country, mortgage agreement, hypothecation agreement, guarantee agreements, property papers, vehicle registration details, information utility documents, ledger or bank statement or loan statement, securitization documents, DRT orders etc, name of guarantors or principal borrowers;

In case of real estate buyers: application, allotment letter, agreement to sale, sale deed, loan documentation, payment details, ledger copy or bank statement or loan agreement, RERA order, calculation sheet for interest calculation. Interest for class of creditors shall be 8% per year.

In case of Employee and workmen: appointment letter/ promotion letters/ increment letter/ latest salary slips/ TDS statement

Action Post filing claims

After filing claims, claimants should wait response from the Liquidator. The Liquidator shall respond upon your claims on or before 67th day of the Liquidation Commencement Date. In case the claimant find a requirement to modify or amend the claim, the claimant can do it within 14 days of filing of the claim.

Please follow instructions of the liquidator seeking additional information or document unless you are going to appeal against instruction. Please submit all information required. The liquidator may reject your claim if he is not satisfied with your claim. In case of rejection of claim you are required to file an appeal within 14 days of receipt of such decision. You cannot file an amendment of claim in such appeal.

Submission of false or misleading proof of claims shall attract penalties.

Filing of Claims during Insolvency Resolution


In an earlier post here, I have discussed the mode for submission of claims by various classes of creditors. During insolvency resolution process for a corporate debtor following forms are prescribed to file claims by creditors:

  • Operational Creditors –Form B
  • Financial Creditors – Form C
  • Class of Creditors (at least 10 FC in the class) – Form CA
  • Workmen and Employees (individually) – Form D
  • Workmen and Employees (for All) – Form E
  • Creditors other than those covered – Form F

Most fields of these forms are identical. In case your claim is complicated or have a good amount of money involved, it is advisable to seek help of a good professional. 

Look after your money

When you have to recover any money, we should follow up and send frequent reminders. If our amount involve is less than threshold limit to file a case of insolvency against the company or to bear the cost of recovery in normal legal process, we should wait but be vigilant. If we think company is unable to pay and not solvent, we should be careful enough to check if there is a case of insolvency against the company. These insolvency matters may be searched from website of National Company Law Tribunal. I frequently check for insolvency status of my client companies and for companies where we have invested any money.

Always look for public announcement section in the IBBI website. This is important as it is prudent to file our claim in case of insolvency within 90 days (actual time permitted is 14 days). If a creditor could not file a case within 90 days, he has to seek condonation of delay form relevant bench of the adjudicating authority.

Common points in these Forms

Common FieldsSource of Information
Name and address of Resolution ProfessionalForm Public Announcement
Name and Address of ClaimantYour identity proofs/ loan agreements/Invoices

Certificate of Incorporation/GST details
Identification Number of ClaimantPAN/ GSTN / CoI / UID (Aadhar)
Address of ClaimantLatest Bank Statement/ Telephone or Mobile Bill/ UID (Aadhar)
Email of ClaimantIf you are not a frequent user of email, please provide your most used email address as you need to check this email address almost daily to stay updated.
  
Details of documentsList of all relevant documents
Details of any dispute as well as the record of pendency or order of suit or arbitration proceedings
Details of how and when debt incurredPlease write one paragraph summery of the default
FC – why loan taken, securities, loan disbursal,  loan period interest and due dates OC – what goods or services provided and for which period, details of period of default with first and last invoice
real estate buyers – Allotment letter, agreement to sale, details of payment made
Details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claimDetails if any
Details of the bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution planPlease check your cheque book: account number, type of account, Bank name and branch address, IFSC Code, Swift Code etc
List of documents attached to this proof of claim in order to prove the existence and non-payment of claim due to the operational creditorThis will be good if proper file is prepared with proper index and page numbering.
Signature of creditor or person authorised to act on his behalfPlease attach proper authorisation.
Address of person signingAddress Proof – UID/Bank statement/ mobile or telephone bill/ Electricity bill
Insolvency commence datePublic Announcement

This is advisable to send declaration as proper notary affidavit though term used is declaration not affidavit.

In the case of company or limited liability partnership, the declaration and verification shall be made by the director/manager/secretary and in the case of other entities, an officer authorised for the purpose by the entity].

Amount of Claim

In case of operational Creditor: please check and attach invoices, ledger, commercial agreement, Memorandum of understanding, contracts etc. Copy of proper ledger is strongly advisable. Where any interest is claim document like MSME registration or agreement should be attached. Interest for MSME operational Creditors 18% after first 45 days.

In case of a claim by financial creditors: Please check and attach sanction letters, loan agreement, inter-corporate loan agreement, RBI – FEMA Documentation in case of loan from foreign country, mortgage agreement, hypothecation agreement, guarantee agreements, property papers, vehicle registration details, information utility documents, ledger or bank statement or loan statement, securitization documents, DRT orders etc, name of guarantors or principal borrowers;

In case of real estate buyers: application, allotment letter, agreement to sale, sale deed, loan documentation, payment details, ledger copy or bank statement or loan agreement, RERA order, calculation sheet for interest calculation. Interest for class of creditors shall be 8% per year.

In case of Employee and workmen: appointment letter/ promotion letters/ increment letter/ latest salary slips/ TDS statement

Action Post filing claims

After filing claims, claimants should wait response from the Resolution Professional. Please follow instructions of the resolution professional unless you are going to appeal against instruction. Please submit all information required. The resolution professional may hold your claim till all required documents or information is received.

Please note, all resolution professional collect and collate claims on provisional basis only.  The resolution professional may revise accepted claim amount any time if there is any additional information is made available either by claimant or corporate debtor.

 It is advisable to sent reminder if there is no response in seven to ten days of filing claims. Sometime, the resolution professional may advise you to file an application against him for admission of your claim. This may be for various reason.