How to file claim under IBC: practical steps including forms and proof of claim
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Under the Insolvency and Bankruptcy Code, 2016 (IBC), timely and accurate claim filing in the corporate insolvency resolution process (CIRP) and liquidation is critical, as claims must be submitted with the timeline submitted in the public announcement or up to 90 days from the insolvency commencement date, whichever is later, to be considered by the resolution professional (RP). Delayed, incorrect, or unsupported claims risk rejection without condonation, as the Adjudicating Authority lacks inherent power to accept claims after the resolution plan approval, and the process is strictly time-bound. The blog aims to simplify how to file claim under IBC the process by outlining clear steps for government departments, including monitoring public announcements, computing dues, collating proof of claim, and submitting the correct form, with supporting documents to ensure successful recovery.
What Is a Claim Under the IBC?
“Claim” under Section 3(6) of the IBC means a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured, or unsecured; or right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured. In CIRP, claims determine the voting share and formation of the Committee of Creditors (CoC) for the resolution plan, with the goal of keeping the company as a going concern. In liquidation, claims are used to establish a creditor’s right to receive a proportional share of the proceeds from the sale of assets, following the strict order of priority detailed in the waterfall mechanism.
Who Can File a Claim Under IBC?
Claims can be filed by:
- Financial creditors, operational creditors, workmen, employees, government authorities.
- Authorized representatives and assignees.
- Secured and unsecured creditors.
When Should a Claim Be Filed?
A claim must be filed within the timeline specified in the public announcement made by the interim resolution professional (IRP) or the liquidator, which is typically 90 days from the insolvency commencement date or by the date of issue of the Request for Resolution Plans (RFRP), whichever is later, as per the 2023 amendments to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). Statutory timelines are strictly enforced, and claims submitted after the prescribed period are fundamental to its efficiency and finality. Late filings are typically barred, and even if a claim is belatedly verified, it may not be considered in the resolution plan, with courts emphasizing that a successful resolution applicant cannot be burdened with unresolved claims after plan approval.
Claim Forms Prescribed Under IBC
- Form B: Form B is for operational creditors, such as vendors or suppliers, to submit claims for goods or services provided to a corporate debtor. Supporting documents like unpaid invoices, purchase orders, contracts, and proofs of delivery should be attached to substantiate the claim. Common mistakes in filing this form include failing to provide complete documentation or incorrect calculation of the total amount owed.
- Form C: This form is used by financial creditors, such as banks and financial institutions, to submit claims based on financial debts, including principal, interest, and any other charges due. Supporting documentation includes executed loan agreements, sanction letters, balance confirmation statements, and records, providing clear proof of default. Accurate interest computation is crucial, as is clearly proving that the debtor has defaulted on their obligations.
- Form D: Form D is used by workment and employees to claim unpaid wages, salaries, statutory, and other employment-related dues from a corporate debtor. This form must be supported by relevant employment records such as appointment letters, salary slips, and bank statements showing proof of non-payment.
- Form E: This form is used when an authorised representative is appointed to file claims collectively on behalf of multiple creditors in specific categories like homebuyers or debenture holders. It facilitates the consolidation of claims and requires the representative to provide a complete list of all creditors represented, along with supporting documents for each individual claim.
- Form F: Form F is a residual form used by any creditor who does not fit into the previous forms, often including government authorities, and statutory bodies. This form is used for claims such as tax liabilities, goods and services tax dues, provident fund contributions, and other regulatory claims not arising from standard operational or financial debt.
Proof Required for Filing a Claim
- Proof for filing a claim is mandatory, but the specific form of proof can be flexible, with various documents accepted as valid evidence.
- Documentary evidence is crucial and preferred over mere assertions, as it provides verifiable and objective support for the claim.
- Acceptable proof includes certifiable entries in bankers books, court or tribunal orders, records from information utilities (IUs), financial contracts, and documents showing notice of non-payment.
Proof of Debt
- Contracts, invoices, loan documents, bank statements.
- Utility of IU records.
Proof of Default
- Bank account statements, NPA classification, acknowledgment of debt.
- Limitations of mere ledger entries.
Step-by-Step Process to File a Claim Under IBC
- Identifying the correct form based on the creditor category.
- Collecting and organising supporting documents, such as invoices, contracts, proof of default, etc.
- Filling claim amount, interest, and security details, including the date of creation and estimated value.
- Submitting the completed claim to IR, RP, or liquidator, via email or physical mode.
- Proof of submission must be retained, such as acknowledgement receipt issued by the IRP, RP, or liquidator, which serves as evidence that the claim has been received and is being processed.
Verification and Admission of Claims
- The IRP and RP are required under section 18 and 25 of the IBC to receive and collate all claims submitted by creditors following a public announcement, and to maintain an updated list of claims.
- While Regulation 13 of the CIRP Regulations mandates IRP or RP to verify claims, neither sections 18 nor 25 expressly grants them the power to admit, partially admit or reject claims.
- The IRP or RP may, in practice, verify claims and determine the amount admitted, but such actions are considered administrative rather than adjudicatory, and the final determination of claims lies with the Adjudicating Authority.
- The admitted claim amounts are communicated to creditors through the updated list maintained by the IRP or RP, which is used in the preparation of the information memorandum and for the formulation of resolution plans.
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Common Reasons for Rejection or Reduction of Claims
The common reasons for rejection or reduction of claims are:
- Lack of proof or improper documentation
- Time-barred claims.
- Incorrect classification as financial or operational debt.
Rights of Creditors After Filing a Claim
- Financial creditors have voting rights in the CoC, proportional to their claim value, and their claims are considered during the resolution process.
- Creditors can challenge the rejection, incorrect acceptance, or categorisation of their claims before the National Company Law Tribunal (NCLT), as the CoC and RP lack authority to arbitrarily reclassify creditors.
- Dissenting financial creditors are entitled to at least the amount they would receive under section 53 of the IBC, while operational creditors are paid after secured creditors but before equity holders in liquidation.
Practical Tips for Successful Claim Filing
- File the claim as early as possible to meet statutory deadlines and allow time for revisions if new evidence emerges or initial assessments require correction.
- Attach clear, indexed, and well-organisation documents such as receipts, contracts, and supporting records to substantiate your claim and expedite processing.
- Track all communications with the RP or liquidator by maintaining a detailed log of dates, times, names, and discussion points to ensure transparency and accountability.
- For complex claims involving disputed amounts, missing documentation, or legal challenges, consider seeking professional assistance from a licensed public adjuster, attorney, or claims management service.
Key Judicial Principles on Claim Filing
The clean slate principle, established under section 31(1) of the IBC, ensures that all claims not included in an approved resolution plan are extinguished, providing the resolution applicant with a fresh start free from historical liabilities. Courts have consistently upheld this principle, emphasising that post-resolution revival of claims undermines the finality and predictability essential for economic revival. The doctrine was reinforced in landmark judgements such as Ghanashyam Mishra & Sons v. Edelweiss Asset Reconstruction Co. Ltd. and Ruchi Soya Industries Ltd v. Union of India, which affirmed that non-participating creditors forfeit their rights to assert claims after resolution. However, the Madras High Court in M/s Empee Distilleries Ltd v. TANGEDCO introduced a notable exception, holding that undisclosed statutory dues – especially those under litigation – may not be extinguished if there was concealment or failure to disclose by the RP, thereby limiting the clean slate in cases of procedural lapses. This exception highlights the limits of RP discretion; while the RP must diligently collect all relevant information under section 13, 15, and 18 of the IBC, failure to disclose known liabilities can result in the continuation of claims, even post-resolution.
Conclusion
Claim filing is the foundation of creditor rights under IBC. Timely submission, supported by accurate documentation and adherence to the specified forms is mandatory to ensure claims are considered. The IRP, RP, or liquidator is statutorily obligated to verify claims based on submitted proofs and maintain an updated list, ensuring transparency and fairness. Proper and accurate filing not only safeguards a creditor’s right to be heard but also maximises recovery potential by securing a place in the CoC and enabling voting on resolution plans.
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