2025 (7) TMI 1083 - AT - IBC

NCLAT sets aside tribunal order allowing creditor's time-barred intervention application filed after limitation period

The NCLAT set aside a tribunal order that entertained a creditor's intervention application filed after the limitation period. The corporate debtor ... Validity of fresh claim after Completion of all proceedings for Liquidation of Corporate Debtor - Section 59 of IBC - claim barred by time limitation or not - Voluntary liquidation of corporate persons - HELD THAT:- It is needless to mention that limitation for an application which is not prescribed in the limitation act would fall within the purview of Article 137 of the Act which prescribe a period of three years. There is no dispute that the Liquidator invited the claims in terms of Regulation 14 by making publication in two newspapers on 07.02.2018. The last date for submission of claim was 07.03.2018. The Respondent was supposed to file the claim, if any, on the basis of the invoice dated 18.09.2015 up to 07.03.2018 but no such claim was filed - It is also pertinent to mention that the Respondent earlier had issued twice notice under Section 8 of the code raising the same claim and the last notice was issued in that regard was on 30.05.2017 which was duly replied by the Corporate Person but no proceedings were initiated by the Respondent under Section 9 of the code. The Appellant / Liquidator completed the proceedings in terms of provisions of Section 59 r/w Regulations and not only remitted the entire balance amount of the liquidation proceedings to the accounts of the stakeholders on 10.04.2019 but also closed the liquidation bank account on 04.05.2019, thereafter, he prepared his final report on 10.05.2019 and informed the RoC and IBBI accordingly on 23.05.2019 and on 28.05.2019 filed the application under Section 59(7) of the Code before the Tribunal for seeking an order of dissolution of the corporate person. The Respondent alleged to have sent an email on 28.05.2019 and mentioned that it is in the process of filing the proof of claim but no claim was filed by the respondent before the liquidator nor proof of claim was filed to the Tribunal rather the application for intervention for the purpose of raising the claim was filed for the first time on 28.08.2019 bearing CA No. 672 of 2019. Thus, if the limitation is counted from 18.09.2015 when the invoice was raised it would expire on 18.09.2018 and if it is to be counted from 18.07.2016 even then the same expired on 17.07.2019 whereas the application bearing CA No. 672 of 2019 raising the claim by way of invoice was filed on 28.08.2019 precisely after the expiry of period of limitation of three years. Therefore, the Tribunal has committed an error in entertaining the application for intervention filed by the Respondent despite the fact that it was beyond the period of limitation of three years. The impugned order is set aside - appeal allowed. ISSUES: Whether an application for intervention filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) after completion of voluntary liquidation proceedings and filing of dissolution application under Section 59(7) is maintainable.Whether the claim raised by a respondent based on an invoice dated 18.09.2015 is barred by limitation under Article 137 of the Limitation Act, 1963.Whether acknowledgment of debt by email dated 18.07.2016 extends the period of limitation for filing the claim.Whether a claim not filed before the liquidator within the stipulated time during voluntary liquidation can be entertained post completion of liquidation proceedings and after filing of final report and dissolution application.Whether the Tribunal erred in allowing intervention application beyond the prescribed limitation period and after liquidation process was concluded. RULINGS / HOLDINGS: The application for intervention under Section 60(5) filed after completion of voluntary liquidation proceedings and filing of dissolution application under Section 59(7) is not maintainable as the statutory framework does not contemplate any adjudicatory role for the Tribunal at this stage.The claim based on the invoice dated 18.09.2015 is 'hopelessly time barred' under Article 137 of the Limitation Act, 1963, as the application was filed on 28.08.2019, beyond the three-year limitation period.The acknowledgment of debt by email dated 18.07.2016 extends the limitation period only up to 17.07.2019, which is still prior to the filing date of the intervention application, thus not saving the claim from being time barred.The respondent's failure to file any claim before the liquidator within the last date fixed (07.03.2018) and absence of proof of claim before the Tribunal precludes the claim from being entertained after liquidation completion.The Tribunal erred in entertaining the intervention application filed beyond the period of limitation and after the liquidation process was concluded, undermining the finality and sanctity of the voluntary liquidation regime. RATIONALE: The Court applied the provisions of Chapter V of the Insolvency and Bankruptcy Code, 2016, specifically Sections 59 and 60, and the IBBI (Voluntary Liquidation) Regulations, 2017, which prescribe the procedure for voluntary liquidation and dissolution of corporate persons.Article 137 of the Limitation Act, 1963, prescribing a three-year limitation period for claims not otherwise specified, was held applicable to the intervention application under Section 60(5) of the Code.The Court emphasized the procedural requirement that claims must be submitted within the timeline fixed by the liquidator during the liquidation process, and no claims can be entertained post completion of liquidation and filing of the final report and dissolution application.The decision underscores the importance of finality and time-bound resolution in voluntary liquidation, preventing reopening of claims after the liquidation process is concluded.No dissent or doctrinal shift was noted; the judgment reaffirmed established principles regarding limitation and procedural finality in insolvency proceedings.