NCLT Mumbai Refuses 18-Month-Late Employee Claims, Reaffirms Strict CIRP Timelines

NCLT Mumbai Refuses 18-Month-Late Employee Claims, Reaffirms Strict CIRP Timelines

Introduction

The National Company Law Tribunal (NCLT) Mumbai has reiterated that stakeholders in a corporate insolvency resolution process (CIRP) must act within statutory timelines. The tribunal dismissed six applications filed by former employees of Indo Global Soft Solutions and Technologies Pvt. Ltd., holding that claims submitted 18 months after the deadline cannot be entertained under the Insolvency and Bankruptcy Code (IBC).

Factual background

CIRP against Indo Global commenced on April 12, 2022. A public announcement on April 22, 2022 set May 4, 2022 as the last date for filing claims. The company’s HR representative forwarded the employees’ claims only on October 25, 2023 more than 18 months later and after the Committee of Creditors (CoC) had approved the first resolution plan on August 30, 2023. By the time the employees approached the tribunal between August and September 2025, the CoC had already approved a second resolution plan on July 21, 2025 and the plan approval application had been reserved for orders on August 25, 2025.

Procedural background

The employees sought admission of unpaid salary, PF, TDS, professional tax and final settlement dues. The Resolution Professional opposed the applications, arguing that:

• The claims were filed extremely late,
• They were unsupported by required documentation,
• Portions related to periods after cessation of employment, and
• The applications appeared intended to derail the nearly concluded CIRP.

Issues for determination

1. Whether employee claims filed 18 months after the statutory deadline can be entertained during CIRP.

2. Whether ignorance of the CIRP or alleged financial distress constitutes sufficient cause for condoning such delay.

3. Whether the tribunal may intervene when the resolution plan has already undergone approval twice by the CoC and is at the stage of final orders.

Contentions of the parties

Applicants’ submissions: They were small-time workers unaware of insolvency procedures.

Their inability to approach earlier stemmed from health and financial distress. Their claims arose from employment obligations that survived the CIRP timeline.

Respondent’s submissions: The applicants were aware of the CIRP, evidenced by the HR representative escalating matters to the professional body ICAI. Claims lacked proper documentation and partly related to post-employment periods. Allowing such belated claims would obstruct the finalisation of the resolution plan and undermine the IBC’s time-bound framework. The GST Department had already filed its claim, further indicating that statutory bodies monitor defaults independently of private creditors.

Reasoning and analysis

The Bench of Judicial Member K R Saji Kumar and Technical Member Anil Raj Chellan held that public announcement of CIRP constitutes deemed notice to all stakeholders, relying on RPS Infrastructure Ltd. v. Mukul Kumar (2023). It found that the employees were not ignorant, as their HR department had already engaged with insolvency bodies. Allowing claims after 18 months would violate the IBC’s insistence on strict timelines and risk making CIRP “an endless process,” opening the floodgates for similar delayed claims and destabilising the process, especially after the CoC had approved two plans and the matter was already reserved for orders. The tribunal also observed that the applications appeared to be an attempt to obstruct the near-complete resolution process.

Implications

The decision reinforces that the IBC’s timeline is mandatory, not discretionary. Stakeholders, especially employees and operational creditors must stay vigilant and monitor public announcements. The decision strengthens certainty in CIRP by preventing late-stage disruptions and ensures that resolution plans cannot be derailed by belated claims. It also reiterates that the insolvency framework prioritises procedural discipline, predictability, and expediency.

In this case the applicants were represented by Mr. Darshan Naik, Ms.Reshma Shirke, and Mr. Prabodh Sanade. Meanwhile the respondent was represented by Senior Advocate Chetan Kapadia and Advocates Rohan Agarwal, Shivani Sinha, Anugya and Meera for Resolution Professional; Advocates Nausher Kohli, Ashish Parwani, and Gitika Makhija for SRA.