NCLT Allahabad Dismisses Application Seeking Condonation of Delay in Filing Claim

NCLT Allahabad Dismisses Application Seeking Condonation of Delay in Filing Claim

Introduction

The NCLT Allahabad Bench has ruled that there is no provision under the liquidation process regulations to accept belated claims. The bench, comprising Praveen Gupta (Member-Judicial) and Ashish Verma (Member-Technical), dismissed an application seeking condonation of delay in filing a claim.

Factual Background

The liquidator rejected the appellant's claim, which was filed beyond the statutory limit. The appellant filed an appeal challenging the rejection and sought condonation of delay of 45 days in filing the application.

• Procedural Background
• Filing of Claim: The appellant filed its claim before the liquidator, which was rejected.
• Appeal: The appellant filed an appeal challenging the rejection of its claim.
• Application for Condonation of Delay: The appellant filed an application seeking condonation of delay of 45 days in filing the appeal.

Issues

1.  Condonation of Delay: Whether the NCLT has the power to condone the delay in filing an application challenging the rejection of a claim.
2.  Belated Claims: Whether there is any provision under the liquidation process regulations permitting acceptance of belated claims.

Contentions of the Parties

Appellant's Contention: The delay in filing was due to administrative procedures and inadvertent errors, such as delayed notarization and internal approval.

Reasoning and Analysis

The NCLT's decision is based on a strict interpretation of the statutory provisions governing liquidation proceedings. The bench of Praveen Gupta (Member-Judicial) and Ashish Verma (Member-Technical) emphasized that the appellant's failure to file the claim within the statutory limit cannot be condoned in the absence of any enabling provision under the Liquidation Process Regulations. The bench's reliance on previous decisions underscores the importance of adhering to procedural timelines in insolvency proceedings.

The NCLT's decision also highlights the distinction between CIRP proceedings and liquidation proceedings. Unlike CIRP proceedings, where there is some flexibility in accepting claims, liquidation proceedings are governed by strict timelines. The tribunal's decision reinforces the principle that these timelines must be strictly adhered to, and courts will not lightly condone delays without sufficient cause.

Decision

The NCLT dismissed the application, holding that:

• The delay beyond 45 days cannot be condoned.
• The appellant failed to exercise due diligence in filing the application.

Implications

The NCLT's decision highlights the importance of timely filing of claims in liquidation proceedings and the limited scope for condonation of delay.

In this case the applicant was represented by Mr. Shivendra Bahadur, Advocate. Meanwhile the respondent was represented by Mr. Abhishek Anand with Mr. Krishna Sharma, Advocates.