Claims are an essential concept in the IBC system. A “claim” refers to both the entitlement to payment and the right to seek a remedy, as specified in Section 3(6) of the Insolvency and Bankruptcy Code (IBC), 2016. The right to payment underlines the claim.
It is crucial to note that a claim only exists when there is a legitimate entitlement to receive payment. In the absence of a valid right to receive payment, there is no recognized claim. Under the code, any creditor (operational or financial), employees, workmen, or home Buyers can make the claim.
To successfully receive your dues from the debtors, it is crucial to know the detailed process of claim filing under the IBC and file the claim correctly.
Process of Claim Filing Under IBC
Filing a claim under the IBC is a strategic approach that requires the creditors to adhere to the following steps:
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Confirmation of the Debtor’s Insolvency
In the first place, it should be ensured that subject to the provisions of the IBC, the debtor undergoes the insolvency resolution/ personal insolvency /liquidation. In most cases, this happens due to non-payment of creditors, resulting in a financial breakdown.
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Appoint a Legal Professional
Take the assistance of a legal expert or insolvency professional to help you with the claim filing process. They can guide you through legal and procedural requirements and ensure your claim is filed promptly and accurately.
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Complete Claim Form
The Insolvency and Bankruptcy Board of India (IBBI) stipulates that you should attain the claim form. The typical format will normally include particulars on your claim, such as the basis for the claim, what is owed, support documents, and contact and KYC information.
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Supporting Paperwork
Bring together all the documents, including contracts, invoices, or agreements, that are necessary to justify your claim. Make sure you carry a copy of the documents to submit along with your claim.
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Validating the Information and Documents Provided Along with the Claim(s)
Go through and analyse the information provided in the claim form properly. Double-check everything for accuracy and completeness to avoid any problems throughout the process.
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Deposit the Claim
Put forward the completed claim form for submission along with other relevant documentation to the RP/ IRP/Liquidator, etc., in charge of the case. Ensure that you meet the specified deadlines for claim submission, if any.
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Acknowledgement
Upon submitting your claim, the IRP, RP, liquidator, etc., is expected to provide you with an acknowledgement. This acknowledgement functions as confirmation that your claim has been successfully registered.
Punishment for False Claims
If a creditor or debtor provides false information in any material particulars to the resolution
professional, he shall be punished with imprisonment for a term up to one year, with a fine up to five lakh rupees, or with both.
If a creditor knowingly commits to supporting a repayment plan while accepting any form of payment, property, or security from the debtor, they may face the consequences. The penalty could include imprisonment for a duration of up to two years or a fine reaching up to three times the value of the money, property, or security received. In instances where the precise amount is indeterminable, the total fine imposed should not surpass five lakh rupees.
Conclusion
The process of claim filing under the IBC can be challenging and time-consuming. MSME Samadhan simplifies the process by offering a sophisticated platform to register the claim online. It offers a quick approach to dealing with the negotiation process, which is also done by legal means.
This makes it easier for MSMEs to participate in the insolvency resolution process and recover their dues. The portal also assists and supports MSMEs throughout the claim filing procedure.