Late by Three Days: NCLAT Upholds Rejection of Homebuyer’s Claim Filed Just Before CoC Vote on Resolution Plan
Late by Three Days: NCLAT Upholds Rejection of Homebuyer’s Claim Filed Just Before CoC Vote on Resolution Plan
Introduction
The National Company Law Appellate Tribunal (NCLAT) has upheld the rejection of a homebuyer’s claim filed shortly before a Committee of Creditors (CoC) meeting to vote on a resolution plan, holding that belated claims can be admitted only if submitted at least seven days prior to such meetings under the CIRP Regulations. A Bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed that the Resolution Professional (RP) is empowered to verify and collate delayed claims only within the statutory timelines prescribed under the Insolvency and Bankruptcy Board of India (CIRP) Regulations.
Factual Background
The appeal was filed by homebuyer Suman Chopra against the rejection of her claim in the Corporate Insolvency Resolution Process (CIRP) of Chandigarh Overseas Pvt Ltd.
The corporate debtor was admitted into CIRP on February 27, 2023. Subsequently, a public announcement inviting claims from creditors was issued on July 7, 2023. Chopra submitted a claim of ₹10.30 lakh on March 15, 2024, which was four days before the scheduled meeting of the Committee of Creditors on March 19, 2024 to vote on the resolution plan.
Procedural Background
The Resolution Professional declined to admit the claim on the ground that it was filed in violation of Regulations 13(1B) and 13(1C) of the CIRP Regulations, which permit admission of belated claims only if they are submitted up to seven days prior to the CoC meeting scheduled to vote on the resolution plan. Chopra subsequently approached the National Company Law Tribunal seeking condonation of delay and admission of her claim. The NCLT dismissed her application, following which she filed the present appeal before the NCLAT.
Issues
1. Whether a claim filed four days before a CoC meeting to vote on a resolution plan can be admitted under the CIRP Regulations.
2. Whether the Resolution Professional was justified in rejecting the belated claim filed by the homebuyer.
3. Whether earlier NCLAT decisions permitting admission of delayed claims were applicable to the present case.
Contentions of the Parties
The appellant argued that the liability underlying her claim was already reflected in the corporate debtor’s records and therefore should not have been rejected merely on procedural grounds. She also contended that the Resolution Professional had failed to comply with Regulation 6A of the CIRP Regulations, which requires individual communication to be sent to creditors whose details are available in the corporate debtor’s books of account.
In support of her arguments, she relied on earlier decisions of the NCLAT, including Rahul Jain v. Nilesh Sharma and Sonia Kapoor v. Arunava Sikdar, where the tribunal had permitted belated claims to be included in resolution plans.
The Resolution Professional submitted that the claim had been filed 245 days after the public announcement inviting claims and was therefore barred by Regulations 13(1B) and 13(1C). It was further argued that entertaining such claims at a late stage would disrupt the insolvency resolution process, particularly when the resolution plan had already been approved by the CoC with more than 99% voting share.
Reasoning and Analysis
The NCLAT observed that there was a delay of 245 days between the public announcement inviting claims and the filing of the appellant’s claim. The tribunal held that the public announcement constituted deemed notice to creditors and that the appellant could not justify the delay on the ground of lack of knowledge. The Bench further held that Regulation 13(1B) clearly permits verification and collation of belated claims only if they are submitted up to seven days before the CoC meeting scheduled for approval of the resolution plan. Since the appellant had filed the claim only four days before the meeting, the Resolution Professional was justified in refusing to admit it.
The tribunal also distinguished the precedents relied upon by the appellant, noting that those cases involved claims filed before the introduction of Regulations 13(1B) and 13(1C) in September 2023. As the appellant’s claim had been filed after these amendments came into force, those decisions were not applicable. The Bench concluded that the appellant had failed to demonstrate any plausible or justifiable reason for not filing the claim within the prescribed timelines.
Decision
The NCLAT dismissed the appeal and upheld the order of the NCLT rejecting the homebuyer’s belated claim in the CIRP of Chandigarh Overseas Pvt Ltd.
In this case the appellant was represented by Advocate Isha Virmani. Meanwhile the respondent was represented by Advocate Atul V Sood.
