Belated Claims Post-Resolution Plan Approval Not Maintainable: NCLAT Reiterates Finality of CIRP Under IBC

NCLAT held that belated claims filed after the approval of the resolution plan are not maintainable, reiterating the finality of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, while adjudicating multiple company appeals, held that once a resolution plan is approved by the Adjudicating Authority under Section 31 of the Insolvency and Bankruptcy Code (IBC), all claims not forming part of the approved plan stand extinguished and cannot be subsequently entertained—particularly when filed after an inordinate delay—as doing so would undermine the finality and time-bound framework of the Corporate Insolvency Resolution Process (CIRP).

In the present matter, four appeals were filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 by homebuyers against a common order dated 24.10.2024 passed by the Adjudicating Authority (NCLT, New Delhi-III) in a set of interlocutory applications arising out of CP(IB) No. 1768(ND)/2018. The appellants challenged the rejection of their belated claims by the Successful Resolution Applicant (SRA), H.S. Oberoi Buildtech Private Limited, which were not entertained as they were filed well after the approval of the resolution plan.

The appellant-homebuyers had booked units in the project “Earth Iconic” being developed by Earth Infrastructure Ltd. (EIL), later taken over by Celestial Estate Pvt. Ltd. (CEPL) during the Corporate Insolvency Resolution Process. While CIRP was initiated against EIL in June 2018 and against CEPL in March 2019, the appellant claimed to have discovered the ongoing proceedings only in November 2023 and subsequently filed their claims in December 2023. However, the claims were made nearly four years and eight months after the last date for submission of claims and more than two years and nine months after the resolution plan had already been approved by the Adjudicating Authority.

The appellants argued that the Resolution Professional (RP) failed to comply with Regulation 6A of the IBBI Regulations, 2016, by not issuing individual communication despite their details being available in the Corporate Debtor’s CRM system. They contended that this failure excluded their claims from the Information Memorandum and prejudiced their rights under the resolution plan. The appellants further relied on the Puneet Kaur v. K V Developers Private Limited and Others, REEDLAW 2022 NCLAT Del 06501 decision to assert that even belated claims, if reflected in the corporate debtor’s records, should have been included.

The NCLAT, however, found that the delay in filing the claims was gross and unjustifiable. The Tribunal noted that the RP had complied with publication requirements and invited claims as early as March 2019. The resolution plan was submitted in November 2019, approved by the CoC that same month, and subsequently approved by the Adjudicating Authority in March 2021. Given that the claim was filed in December 2023, the Tribunal concluded that the RP could not be faulted for the non-inclusion of the claim in the Information Memorandum.

It was further observed that the resolution plan itself contained specific clauses (6.5 and 6.13(iv)(c)) allowing late claims to be considered within a defined period of 12 months with additional charges. The appellants had filed their claims well beyond this grace period, rendering them ineligible. The Tribunal emphasised that entertaining such delayed claims would expose the resolution applicant to undue uncertainty and compromise the finality and sanctity of the CIRP, which under the IBC, must be a time-bound process.

Referring to the Supreme Court’s decisions in Ghanashyam Mishra and Sons private Limited Through The Authorised Signatory v. Edelweiss Asset Reconstruction Company Limited Through The Director and Others, REEDLAW 2021 SC 04534 and RPS Infrastructure Limited v. Mukul Kumar and Another, REEDLAW 2023 SC 09527, the NCLAT reaffirmed the settled legal position that once a resolution plan is approved by the Adjudicating Authority, all claims not forming part of the plan stand extinguished and no fresh proceedings can be initiated in respect of such claims.

In view of the above, the Tribunal concluded that there was no error in the impugned order passed by the Adjudicating Authority in refusing to entertain the appellants’ belated claims. The appeals, being devoid of merit, were accordingly dismissed with no order as to costs.

Mr. Ketan Madan and Mr. Dhananjay Jain, Advocates, represented the appellants.

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