National Company Law Appellate Tribunal, New Delhi: In an appeal against the order rejecting application seeking admission of a claim filed after the prescribed timeline, a 3-member bench comprising of Ashok Bhushan,* J., Barun Mitra (Technical Member) and Arun Baroka (Technical Member), upheld the Adjudicating Authority’s decision to reject the belated claim, citing RPS Infrastructure Ltd. v. Mukul Kumar, 2023 SCC OnLine SC 1147, as the claim was filed after 14 months post-Plan approval and more than 750 days after the deadline for submitting claims.
In the instant matter the Adjudicating Authority admitted an Application under Section 9 of the IBC against respondent on 17-12-2019. The Interim Resolution Professional (IRP) of the Corporate Debtor invited claims until 31-12-2019 and the Committee of Creditors (CoC) approved the Resolution Plan on 16-01-2021. Later, the Three C Green Developers (P) Ltd. was admitted in Section 7 proceedings with the appellant appointed as Resolution Professional (RP).
The appellant filed a claim on behalf of Three C Green Developers (P) Ltd. on 06.04.2022, which was not admitted. The appellant then filed an application seeking various reliefs, including the admission of the claim, a stay on the resolution plan, and an independent expert inquiry. The Adjudicating Authority initially rejected the application, and the appellant filed an appeal, which was allowed, and the matter was remanded to the Adjudicating Authority. The Adjudicating Authority, after remand, rejected the application, citing a delay in filing the claim vide order dated 12-09-2023. Aggrieved by the impugned order, the appellant preferred the present appeal challenging the same.
The appellant argued that the Ex-Management and Directors of Three C Green Developers (P) Ltd. deliberately omitted to file their claims during the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor and the appellant, as the RP, was authorized by the CoC to file the claim on their behalf. The appellant claimed that the Ex-Management’s actions amounted to fraud and could render the approval of the Resolution Plan by the CoC invalid. The appellant asserted that the assets and receivables of the Corporate Debtor were charged and registered with the Registrar of Companies (ROC). The IRP of the Corporate Debtor should have included the claim in the Information Memorandum.
The respondents contended that the appellant’s claim was highly belated and filed after the CoC had approved the Resolution Plan, making it inadmissible.
NCLAT’s Assessment and Decision
The NCLAT found that the appellant’s claim was filed more than 14 months after the CoC had approved the Resolution Plan and more than 750 days after the deadline for submitting claims. The NCLAT noted that no claims or protests were lodged during the entire CIRP process by the Company. The NCLAT also noted that both Three C Green Developers (P) Ltd. and Corporate Debtor had common management.
The NCLAT upheld the Adjudicating Authority’s decision, citing RPS Infrastructure Ltd. (Supra) and the principle that allowing claims after CoC approval could lead to an endless process. The Supreme Court opined that “The mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process. This would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon.”
The NCLAT rejected the appellant’s argument invoking Section 17 of the Limitation Act, 1963 as the alleged fraud was attributed to the Ex-Management of Three C Green Developers (P) Ltd., not the Corporate Debtor.
The NCLAT found no merit in the appeal and dismissed it, without awarding costs.
[Gyan Chandra Misra v. Three C Universal Developers (P) Ltd., Company Appeal (AT) (Insolvency) No.1316 of 2023, order dated 17-10-2023]
*Judgment by Justice Ashok Bhushan
Advocates who appeared in this case :
Mr. Gaurav Mitra, Roy Choudhary, Ms. Mrinal Harsh Vardhan, Counsel for the Appellant
Mr. Abhishek Anand, Mr. Mohak Sharma, Mr. Shikhar Tiwari, Mr. Parveen Kaur Kapoor, Mr. Rahul Singhal, Counsel for the Respondent