Belated insolvency creditor claim filed after CIRP deadline-appeal became infructuous once resolution plan approved and claims extinguished

The dominant issue was whether an appeal against rejection of a belated claim could yield effective relief after approval of the resolution plan. The NCLAT held that, since the claim was filed after the prescribed date and was never admitted in the CIRP, it was not part of the approved plan; upon plan approval, all such claims stand extinguished. Distinguishing an earlier NCLAT decision where the appellant did not seek alteration of the plan payout and only pressed a set-off claim, the Tribunal followed precedent holding that post-approval challenges to rejection of claims become infructuous. Consequently, no relief could be granted and the appeal was dismissed as infructuous.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, after approval of the resolution plan, an appeal challenging rejection of a belatedly filed claim (not admitted during CIRP and not forming part of the resolution plan) can still yield any effective relief, or must be dismissed as infructuous.

(ii) Whether the authorities relied upon by the appellant warranted interference despite plan approval, on the footing that the appeal could be pursued even after approval of the resolution plan.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Effect of approval of resolution plan on a claim not admitted in CIRP and not included in the plan; maintainability/effectiveness of appeal

Legal framework (as discussed/applied by the Court): The Court proceeded on the principle that upon approval of a resolution plan, claims not forming part of the plan stand extinguished, and proceedings seeking recognition/enforcement of such claims cannot result in any relief once the plan is approved.

Interpretation and reasoning: The Court noted undisputed facts: claims were invited with a last date; the appellant filed its claim with inordinate delay; the claim was never accepted during CIRP; and the resolution plan had been approved. Since the appellant's claim was not admitted and therefore not part of the approved plan, the Court accepted the respondent's contention that no relief could be granted in an appeal confined to challenging rejection of the belated claim, particularly when the plan approval was not itself challenged.

Conclusions: Once the resolution plan was approved, and the appellant's claim was not part of it, the appeal could not result in any effective relief and was therefore dismissed as infructuous.

Issue (ii): Applicability of prior tribunal decisions relied upon by the appellant to avoid dismissal as infructuous

Legal framework (as discussed/applied by the Court): The Court compared the factual and decisional basis of the cited tribunal decisions with the present case to determine whether they supported continuation of the appeal post plan approval.

Interpretation and reasoning: The Court held that the decision relied upon by the appellant concerning set-off did not assist because it turned on a limited dispute (set-off/quantification) that did not affect plan approval or payout and, in that case, the plan approval order itself was under challenge; in contrast, here the claim was never accepted and was not part of the plan. The other relied-upon decision was found inapplicable because it involved remand on consent of both the RP and the resolution applicant for reconsideration, unlike the present circumstances. The Court instead applied a tribunal precedent directly dealing with an appeal against rejection of a claim after plan approval, where such appeal was held to be infructuous because non-plan claims stand extinguished on approval.

Conclusions: The appellant's cited authorities were distinguished on facts and did not support granting relief after plan approval; the Court followed the principle that post-approval, non-plan claims cannot be resurrected through such an appeal, leading to dismissal as infructuous.

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