Timely Claims Vital in Insolvency Cases: NCLAT Upholds Rejection of Belated Claim

The NCLAT upheld the NCLT's decision to reject a belatedly filed claim in insolvency proceedings due to the disposal of the subject matter and creation of third party rights. Emphasizing the importance of timely claims under the IBC for efficient resolution, the court dismissed the appellant's plea for condonation of delay. The appeal was disposed of, reinforcing the necessity of adhering to the time-bound nature of insolvency proceedings to achieve the objectives of the Insolvency and Bankruptcy Code, 2016.

---

---

Issues involved: Late filing of claim in insolvency proceedings, rejection of claim by Liquidator and NCLT, creation of third party rights due to disposal of subject matter.

The judgment deals with the issue of the appellant filing a claim belatedly in insolvency proceedings. The appellant filed the claim on 02.03.2022, 85 days after the last filing date of 05.12.2021. The Liquidator refused to accept the late claim, leading the appellant to approach the NCLT. The NCLT rejected the application, noting that the subject matter had been disposed of and third party rights had been created, advising the appellant to seek other remedies under the law.

The NCLT's decision was upheld by the NCLAT, affirming that due to the disposal of the subject matter and creation of third party rights, the appellant should pursue other available legal remedies. The court emphasized the importance of timely claims in insolvency proceedings under the IBC to ensure a time-bound resolution of corporate insolvency. It was concluded that condoning delays in the absence of specific provisions would only prolong the insolvency process.

Therefore, the contention of the appellant's counsel for condonation of the delay and acceptance of the claim was not accepted. The civil appeal was disposed of, and any pending applications were also deemed disposed of. The judgment highlights the significance of timely claims in insolvency proceedings to adhere to the objectives of the Insolvency and Bankruptcy Code, 2016.

---