IBC proceedings are time bound; belated claim by creditor cannot be considered: NCLAT

The National Company Law Appellate Tribunal at New Delhi recently held that a belated claim by a creditor cannot be entertained by the Resolution Professional (RP) as the insolvency proceedings under the Insolvency Bankruptcy Code (IBC) are time bound. [Pooja Mehra v. Nilesh Sharma & Ors.].A coram of Chairperson Ashok Bhushan and technical member Arun Baroka observed in an April 19 order that a person who sleeps over their rights should not be given the indulgence of condonation of delay.“The appellant was sleeping over his rights. A person who sleeps over his rights ought not be given any indulgence. Close to 3 years had passed since the commencement of Corporate Insolvency Resolution Proceedings (CIRP) of Dream Procon Pvt Ltd and the applicant never showed any interest with respect to the flat purchased by him. The proceedings under IBC are time bound and the belated claim of the applicant cannot be considered and is liable to be rejected,” the NCLAT held..The applicant, Pooja Mehra, a home buyer invested a sum of ₹50 lakh in a project in Noida. The project was being developed by Dream Procon Pvt Ltd.Dream Procon failed to handover possession of the buildings and also failed to refund the money. Insolvency proceedings were then initiated and the developer was admitted to insolvency.A Resolution Professional was appointed and called for claims from creditors.Mehra submitted a claim before the Committee of Creditors (CoC) after a delay of 552 days after approval of resolution plan by the CoC. The resolution plan was pending consideration before NCLT Delhi. However, the RP failed to accept or reject the claim within 7 days.Mehra then approached NCLT Delhi seeking directions to the CoC to accept her belated claim despite approval of resolution plan. However, NCLT rejected her application prompting her to move NCLAT..The NCLAT observed that if any creditor fails to file their claim within the stipulated period of 90 days, it could still file within an extended period which the RP would consider if it is genuine. However, with the extended period also having lapsed, the RP was not empowered to accept such claims.“In the present case, the resolution plan has already been approved by the CoC in May 2021 and therefore the above observations assume even greater significance. It is submitted that acceptance of any claim at this stage will entirely upset the approved resolution plan and push the corporate debtor into liquidation,” the tribunal said..Advocates Vaibhav Mahajan and Harshita Aggarwal appeared for Mehra.Advocates Varsha Banerjee and Mahima Ahuja appeared for RP.Advocates Parth Bhatia, Prithu Garg and Shivam Singh appeared for Successful Resolution Applicant (SRA)[Read order]