No Provision To Punish Creditors Filing False Claims Under IBC: Delhi High Court Issues Notice To IBBI, MCA

The Delhi High Court has issued notice on a petition for framing of regulations under the Insolvency and Bankruptcy Code, 2016 for enforcing Section 15 thereof read with Regulation 6 of CIRP Regulations 2016, which states that "Submission of false or misleading proofs of claim shall attract penalties".The petition filed by Advocate Dr. Arun Mohan states that the Code does not provide any corresponding provision for enforcing the penalties on the errant creditors.The Division Bench of Chief Justice DN Patel and Justice Jyoti Singh has issued notices to Insolvency & Bankruptcy Board of India and the Ministry of Corporate Affairs, seeking their response. The matter is now listed for hearing on March 28. The petitioner is an an Insolvency Professional who made the public announcement for inviting the claims from the creditors of a Corporate Debtor. Subsequently, he found that one of the creditors had impersonated herself as an employee/ consultant of the debtor and filed a false and misleading claim for Rs 2.80 lacs.Resultantly, the petitioner, under the authority of Committee of Creditors, claims to have issued issued demand notice to such creditor, however, no response was received thereof. Instead, it is further averred, that the allegedly errant creditor lodged a false complaint filed against the petitioner.In this background the plea alleges,"That such creditor, deliberately and intentionally filed the false and misleading claim with the petitioner, knowingly well that filing of false and misleading proof of claims under section 15 of IBC, 2016 and Regulation 6 of CIRP Regulations shall attract penalties but there is no such provision of penalties to enforce the provisions of Section 15 of IBC, 2016 and Regulation 6 in CIRP Regulations." Thus, the plea seeks a declaration that Section 15 of IBC and Regulation 6 of 2016 Regulations is non-est, being not enforceable.It is urged that the Respondents be directed to make regulations under IBC, consistent to enforce the provisions of Section 15 r/w Regulation 6, for punishing such creditors for filing the false and misleading claim.Case Title: Dr. Arun Mohan Bansal v. Insolvency & Bankruptcy Board of India through Chairperson & Ors.

No Provision To Punish Creditors Filing False Claims Under IBC: Delhi High Court Issues Notice To IBBI, MCA

Suhavi Arya

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