NCLAT dismissed the appeal, ruling that belated claims filed after the CIRP timelines were non-admissible once the resolution plan had been approved under the IBC.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench led by Justice Ashok Bhushan (Chairperson) and Technical Member Mr. Barun Mitra reviewed an appeal and held that claims not submitted within the prescribed timelines during the Corporate Insolvency Resolution Process (CIRP), as mandated under the Insolvency and Bankruptcy Code (IBC) and CIRP Regulations, cannot be entertained after the resolution plan’s approval, as doing so would contravene the finality and time-bound objectives of the CIRP, in line with Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited and Others, REEDLAW 2021 SC 04534.
The National Company Law Appellate Tribunal (NCLAT) adjudicated an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC), challenging the approval of the resolution plan for the Corporate Debtor by the National Company Law Tribunal (NCLT), Ahmedabad Bench-II, on 13.03.2023. The appeal was filed by the Commissioner of Income Tax, who contended that their claim of ₹10.14 crore, arising from tax assessments, was improperly excluded from the resolution plan. The Corporate Insolvency Resolution Process (CIRP) commenced on 28.01.2022, and the appellant, despite being notified, submitted their claim belatedly on 13.05.2022, after the Committee of Creditors (CoC) had approved the resolution plan on 15.10.2022. The Resolution Professional (RP) rejected the claim for non-compliance with CIRP timelines and inadequate documentation.
The appellant argued that their claim was submitted before the resolution plan’s approval and alleged that the RP violated principles of natural justice by not intimating the rejection. They relied on the Supreme Court’s decision in State Tax Officer (1) v. Rainbow Papers Limited, REEDLAW 2022 SC 09519 to assert that government dues constitute secured claims. The respondents countered, emphasizing the appellant's failure to substantiate the claim within the prescribed period and their inaction during CIRP proceedings, including the NCLT hearings on 02.02.2023 and 21.02.2023. They cited the Supreme Court’s ruling in Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited and Others, REEDLAW 2021 SC 04534, which upheld the binding nature of approved resolution plans and extinguished claims not admitted during CIRP.
The Tribunal examined whether the appellant demonstrated due diligence and whether sufficient grounds existed to admit a belated claim post-approval of the resolution plan. It found that the RP adhered to statutory requirements under Sections 13 and 15 of the IBC and CIRP Regulations 6, 7, 10, and 12 by making timely public announcements and inviting claims within the prescribed 90-day period. The appellant’s belated claim was submitted after the CoC had approved the plan and without sufficient documentation, despite the RP’s request for additional details under Regulation 10. The RP also updated the list of creditors multiple times, providing deemed notice of claim rejection, and the appellant neither raised objections during CIRP nor contested the resolution plan’s approval.
Relying on established jurisprudence, including Ghanashyam Mishra and Sons Private Limited v. Edelweiss Asset Reconstruction Company Limited and Others, REEDLAW 2021 SC 04534 and Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Others, REEDLAW 2019 SC 11505, the NCLAT emphasized that resolution applicants are entitled to a “clean slate” and that entertaining belated claims post-plan approval would undermine the CIRP’s objectives of finality and timeliness. It held that the resolution plan, sanctioned under Section 31 of the IBC, was binding on all stakeholders, including statutory authorities, and found no contravention of statutory obligations by the RP. Consequently, the appeal was dismissed, affirming the resolution plan's approval and the CIRP’s adherence to statutory and procedural requirements.
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