NCLAT Reaffirms Section 59 Timelines; Rejects Delayed Intervention in Voluntary Liquidation
- REEDLAW
- Jul 20
- 3 min read
The NCLAT reaffirmed the strict timelines under Section 59 of the IBC and rejected the delayed intervention application filed during the voluntary liquidation process.
On 16 July 2025, the National Company Law Appellate Tribunal (NCLAT), New Delhi Bench comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member), while adjudicating a company appeal, held that a claim raised after the conclusion of the voluntary liquidation process under Section 59 of the IBC is not maintainable if filed beyond the three-year limitation period prescribed under Article 137 of the Limitation Act, 1963—even if based on an alleged acknowledgment of debt. The NCLAT emphasised that allowing such delayed intervention would undermine the objective of a time-bound voluntary liquidation framework.
The National Company Law Appellate Tribunal (NCLAT) allowed the appeal filed by the liquidator of the Corporate Person, M/s Nextgen Procon Pvt. Ltd., and set aside the impugned order of the Adjudicating Authority dated 06.08.2024. The Adjudicating Authority had erroneously allowed an intervention application filed by M/s MRA Associates India Pvt. Ltd. under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, despite the clear lapse of limitation for raising a claim during voluntary liquidation proceedings under Section 59(7) of the Code.
The Corporate Person had entered into a service agreement with the Respondent on 10.02.2013, which was prematurely terminated after 18 months, despite the stipulated 30-month term. The Respondent, who had failed to deploy resources at the project site in April 2015, raised a final invoice on 18.09.2015 for Rs. 49,32,917/-, which was duly disputed by the Corporate Person on multiple grounds, including non-performance and adjustment of mobilization advance. After issuing statutory notices and receiving rebuttals, the Respondent failed to initiate proceedings under Section 9 of the Code and also did not submit any claim when the Appellant invited creditor claims through public notice on 07.02.2018, fixing 07.03.2018 as the last date.
The liquidator proceeded with the voluntary liquidation process in compliance with the IBBI (Voluntary Liquidation Process) Regulations, 2017, and upon distribution of the liquidation proceeds and closure of accounts, submitted the final report to the RoC and IBBI on 23.05.2019. An application for dissolution was filed under Section 59(7) on 28.05.2019. The Respondent, instead of filing a proper claim or proof before the liquidator or Tribunal, sent an email alleging dues based on the 2015 invoice and subsequently filed an intervention application on 28.08.2019.
Though the Adjudicating Authority had earlier dismissed the intervention application on grounds of limitation, the same was remanded by the NCLAT on 18.11.2022 with directions to consider the effect of an email dated 18.07.2016 allegedly acknowledging liability. On reconsideration, however, the Tribunal wrongly allowed the application despite the clear bar of limitation under Article 137 of the Limitation Act, 1963. The NCLAT held that even if limitation were computed from the said email dated 18.07.2016, the period expired on 17.07.2019, whereas the application was filed on 28.08.2019.
The NCLAT emphasised that once the voluntary liquidation process was concluded and the dissolution application was filed, belated claims could not be entertained. It observed that permitting such intervention at the final stage would undermine the finality and sanctity of the time-bound framework under the Code. Accordingly, the Tribunal found the impugned order unsustainable and allowed the appeal, thereby rejecting the Respondent’s belated claim and intervention application as time-barred.
Mr. Arpit Dwivedi, Advocate, represented the Appellant.
Mr. Saurabh Kalia and S. Shishir, Advocates, appeared for the Respondent.
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