Time-Barred CIRP Claims Cannot Be Revived After Final Rejection: NCLAT Affirms Limited Scope of Remand
- REEDLAW
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REEDLAW Legal News Network reports: In a pivotal ruling, the Appellate Tribunal reaffirmed that once a belated CIRP claim has attained finality across multiple judicial stages, it cannot be revived merely because a resolution plan is remanded for limited reconsideration. The Tribunal clarified that CIRP timelines remain rigid and non-negotiable, and a remand operates strictly within the scope defined, without reopening extinguished rights or reactivating claims earlier rejected on limitation grounds.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson)Â and Mr. Barun Mitra (Technical Member), while adjudicating a batch of two Company Appeals, held that rejection of a delayed claim that had already reached finality before the NCLT, NCLAT and the Supreme Court could not be revisited on account of the subsequent remand of the resolution plan for limited reconsideration. It was observed that CIRP timelines are mandatory, and the remand order did not revive extinguished rights. The Tribunal further held that amendments to Regulation 13(1B), being prospective, created no fresh entitlement to resurrect or refile a time-barred claim.
The appeals had been filed by the Appellant challenging the order dated 22 January 2025 of the Adjudicating Authority, which dismissed two interlocutory applications in an ongoing insolvency matter involving a real estate project. The Appellant had purchased 50 flats in 2012 but received possession of only nine units in 2018. CIRP against the Corporate Debtor commenced on 20 August 2019, and Form A, inviting claims, was published. The RP collated claims and proceeded with the issuance of Form G, culminating in approval of a resolution plan by the CoC on 4 March 2020.
The Appellant submitted its claim belatedly on 16 June 2020, which the RP rejected as time-barred. Attempts to secure condonation of delay and admission of the rejected claim were dismissed twice by the Adjudicating Authority, and both rounds of challenges before the NCLAT and the Supreme Court also failed. Although the Supreme Court granted liberty to pursue “any remedy available in law, subsequent applications filed by the Appellant again resulted in rejection, thereby confirming the finality of the earlier orders.
In the interim, the Supreme Court declared a statutory authority connected to the project as a secured creditor in a separate matter. Consequently, on 5 March 2024, the Adjudicating Authority remitted the already-approved resolution plan back to the CoC only for reconsideration of the statutory authority’s treatment. Treating this limited remand as a fresh cause of action, the Appellant sought amendment of its earlier application to revive its long-rejected claim. The Appellant contended that earlier orders would not operate as res judicata because the 2020 plan had been remanded, and further argued that amendments to Regulation 13 of the CIRP Regulations enabled consideration of delayed claims.
The SRA and the RP opposed the appeals, submitting that the Appellant’s belated claim had attained finality through multiple rounds of adjudication before the NCLT, NCLAT, and Supreme Court. They asserted that the remand of the plan was extremely narrow—confined to incorporating the statutory authority’s status as a secured creditor—and did not reopen the CIRP or revive extinguished rights. It was also argued that Regulation 13(1B), inserted in 2023, was prospective and inapplicable to a CIRP initiated in 2019 with a resolution plan approved in 2020.
After considering the submissions and the lengthy litigation history, the Tribunal held that the Appellant’s claim had already been rejected twice, with the rejection upheld through multiple appellate levels. The remand of the plan on 5 March 2024 had no bearing on the finality of earlier orders and did not create any new right to file or revive a claim. The Tribunal found the Appellant’s reliance on Regulation 13(1B) misplaced, reiterating that it could not apply retrospectively to an insolvency process that had substantially concluded years earlier.
The Tribunal further held that none of the subsequent developments altered the legal or factual landscape, nor did they dilute the finality of the earlier judicial findings. Reliance on jurisprudence relating to subsequent events, moulding of relief, or amendment of pleadings was considered irrelevant to the CIRP framework, which operated in rem and adhered to strict statutory timelines. Principles of res judicata and constructive res judicata were found fully applicable, as the Appellant’s attempt to revive its time-barred claim directly re-agitated issues settled repeatedly in prior rounds of litigation.
In conclusion, the Tribunal affirmed that the Adjudicating Authority had acted correctly in dismissing the Appellant’s amendment application and the attempt to relitigate an extinguished claim. The appeals were therefore dismissed as devoid of merit.
Mr. Ramji Srinivasan Sr. Advocate with Mr. Anirban Bhattacharya, Mr. Rajeev Chowdhary, Ms. Priyanka Bhatt, Ms. Shefali Munde and Mr. Arjun Bhatia, Advocates, represented the Appellant.
Mr. Sunil Fernandes, Sr. Advocate with Ms. Anuja Pethia, Mr. Noor Shergill, Mr. Rishabh Govilla, Mr. Rishabh Nigam, Ms. Kshirja Agarwal and Ms. Muskan Surana, Advocates, appeared for the SRA.
Mr. Harsh Taneja, Ms. Manvi Jain, Mr. Anuj Maheshwari and Ms. Parul, Advocates, appeared for the RP.
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