NCLAT upholds rejection of delayed claim submission citing SC precedent preventing endless insolvency processes

The NCLAT dismissed an appeal where the appellant sought to submit a claim after the deadline. The Adjudicating Authority had rejected the request citing delay. The NCLAT upheld this decision, referencing SC precedent in RPS Infrastructure Ltd that prevents endless CIRP processes through repeated plan modifications. The tribunal noted that allowing late claims would reopen issues and encourage similar delayed submissions from other parties, making the insolvency process indefinite. The appeal was found to lack merit and was dismissed.

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Issues involved:
The appeal against the order dismissing the application for setting aside the email/order of the Resolution Professional under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 for allowing the submission of a claim after a delay.

Summary:
1. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the Appellant, IDBI Bank Ltd., failed to submit their claim within the prescribed time. Despite a delay of 502 days, the Appellant submitted the claim, which was rejected by the Resolution Professional (RP). The Adjudicating Authority dismissed the Appellant's application to set aside the rejection on the grounds of delay.

2. The order dismissing the initial application was not challenged further. Following a Supreme Court decision allowing the Committee of Creditors (CoC) to proceed based on fresh Expressions of Interest (EoIs), the Appellant sent an email to the RP requesting the admission of its claim, citing the Supreme Court's decision as a basis for the late submission.

3. The Appellant's counsel argued that the fresh claim was made due to the Supreme Court's decision, while the Respondent's counsel contended that the Appellant cannot pursue the same claim again after it was rejected for delay by the Adjudicating Authority and cited a relevant Supreme Court case.

4. The Appellate Tribunal considered the arguments and the law laid down by the Supreme Court in a similar case. The Tribunal noted that the delay in the Appellant's claim submission was substantial and that the Insolvency and Bankruptcy Code is a time-bound process. Referring to the Supreme Court's findings, the Tribunal concluded that reopening the issue would lead to an endless process and dismissed the appeal.

5. No other significant points were raised by the parties, and the Tribunal found no merit in the appeal, ultimately dismissing it without any order as to costs.

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