NCLAT upholds rejection of delayed claim applications filed 1.5 years after Resolution Plan approval

The NCLAT dismissed appeals challenging rejection of claims by Resolution Professional. The CoC approved the Resolution Plan on 13.08.2021, but appellants filed applications seeking claim admission in February 2023, over 1.5 years later. The Adjudicating Authority correctly rejected the delayed applications without sufficient justification. The Resolution Plan was subsequently approved by the Adjudicating Authority on 23.06.2023 and remained unchallenged. The NCLAT found no grounds to interfere with the rejection order, emphasizing that approval of the Resolution Plan by CoC does not entitle parties to file significantly delayed claim applications.

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Issues Involved:
1. Whether the claims filed by the Appellants were substantiated with sufficient documents.
2. Whether the delay in filing the claims after the approval of the Resolution Plan was justified.
3. Whether the claims qualify as financial debt under the Insolvency and Bankruptcy Code, 2016.

Summary of Judgment:

Issue 1: Sufficiency of Documents to Substantiate Claims
The Appellants, D.S. Kulkarni & Associates and D.S. Kulkarni & Company, filed claims in Form CA and Form F. The Resolution Professional (RP) requested additional documents to substantiate these claims, which were not provided despite multiple reminders. The RP rejected the claims due to insufficient documentation. The Tribunal noted that the Appellants only submitted a Memorandum of Understanding (MoU) and Ledger extracts, which were deemed inadequate to prove financial debt.

Issue 2: Delay in Filing Claims
The claims were initially filed on 09.10.2019, but the Appellants failed to provide the necessary supporting documents until much later. The Resolution Plan was approved by the Committee of Creditors (CoC) on 13.08.2021, and the Appellants filed IA Nos. 721 and 722 of 2023 in February 2023, more than one and a half years after the Plan's approval. The Tribunal found the delay unjustified and rejected the applications on this basis.

Issue 3: Qualification as Financial Debt
The Tribunal examined the MoUs submitted by the Appellants. The MoU dated 01.01.2011 indicated that the transactions were for purchasing or jointly developing properties, not for financial debt as defined under Section 5(8) of the Insolvency and Bankruptcy Code, 2016. Similarly, the MoU dated 13.04.2013 referred to the purchase of units in a township, which does not qualify as financial debt. The Tribunal concluded that the RP correctly rejected the claims based on the documents provided.

Conclusion
The Tribunal upheld the RP's decision to reject the claims due to insufficient documentation and unjustified delay. The MoUs and Ledger extracts submitted did not qualify as evidence of financial debt. Consequently, the appeals were dismissed, and no grounds were found to interfere with the Adjudicating Authority's order dated 31.03.2023.

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