NCLAT reaffirmed that claims arising after the liquidation commencement date are inadmissible under the IBC framework.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench led by Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Technical Member) reviewed an appeal and observed that under the IBC and Liquidation Process Regulations, only claims existing as of the liquidation commencement date are admissible, and any subsequent claims, including those arising from arbitral awards, are barred unless they qualify under Regulation 28 concerning future debts. The NCLAT Bench noted that the statutory framework mandates the freezing of liabilities on the liquidation commencement date, leaving no scope for post-liquidation claims.
The NCLAT addressed an appeal challenging the NCLT’s dismissal of CA No. 24/ND/2023, which contested the Liquidator’s decision rejecting the appellant’s claim. The dispute originated from agreements between the appellant’s group companies and the Corporate Debtor, SBS Transpole Logistics Pvt. Ltd., involving an MoU and a Shareholders’ Agreement. Arbitration was initiated in 2019, followed by the Corporate Debtor’s admission into insolvency on 04.09.2019, with liquidation ordered on 16.12.2020. A public announcement invited claims by 15.01.2021, setting the liquidation commencement date as the cut-off for claim submissions.
During liquidation, the arbitration at the SIAC concluded with an award on 22.12.2022, dismissing the claims but awarding ₹9.52 crore in favour of the appellant. A correction to the award was issued on 06.03.2023, and the appellant filed a claim in Form-G on 27.03.2023, which the Liquidator rejected. The Liquidator reasoned that the claim did not exist on the liquidation commencement date and was filed beyond the statutory deadline. The NCLT upheld the rejection, prompting the appeal before the NCLAT.
The appellant argued that it was impossible to submit the claim earlier since the arbitration award was issued only in December 2022. It contended that the Liquidator’s participation in the arbitration validated the costs as a legitimate claim. The appellant also cited other NCLT decisions allowing post-liquidation claims, attempting to establish that such claims could be entertained. However, the Liquidator maintained that, under Regulations 12 and 16 of the IBBI Liquidation Process Regulations, claims must be frozen as of the liquidation commencement date, barring any subsequent claims unless they qualify under Regulation 28.
After examining the submissions, the NCLAT upheld the NCLT’s order, affirming that claims must exist on the liquidation commencement date. The tribunal emphasized that the IBC framework requires liabilities to be frozen as of that date, rejecting the argument that post-liquidation claims are admissible. The NCLAT distinguished the judgments cited by the appellant, noting that those cases either addressed different factual scenarios or did not consider the relevant regulations. The appeal was dismissed, reaffirming the principle that claims arising after the liquidation commencement date are inadmissible, with no order as to costs.
Mr. Gautam Narayan, Ms. Asmita Singh and Mr. Tushar Nair, Advocates represented the Appellant.
Mr. I.P.S. Oberoi, Mr. R.K. Srivastava and Mr. Himrit Singh Wadhwa, Advocates appeared for Respondent.
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