Time-barred claims by Creditors in IBC Proceedings should not to be considered

Pooja Mehra Vs Victory Ace Social Welfare Society (NCLAT Delhi)

Conclusion: NCLAT’s decision underscores the significance of compliance with time limits prescribed under the IBC and  there being no minimum payment prescribed for the class of creditors i.e. homebuyers under the IBC, the payment of NIL to them was well within the commercial discretion of the CoC.. The judgment served as a reminder of the balance between creditor rights and procedural expediency within the insolvency framework.

Held: Appellant challenged the dismissal of her application seeking condonation of delay in filing her claim under the IBC. The dispute revolved around the submission of a belated claim after the approval of the Resolution Plan by the Committee of Creditors (CoC). She contended that the delay was unintentional and sought inclusion as a Financial Creditor. Appellant’s investment in Victory Ace Social Welfare Society, coupled with alleged defaults by the Corporate Debtor, formed the crux of her claim. She argued for the restoration of her rights, emphasizing the failure of the Resolution Professional to accept or reject her claim within the stipulated period. On the contrary, the Resolution Professional asserted that appellant’s claim lacked substantiation and was time-barred. The CoC’s approval of the Resolution Plan was highlighted as a crucial milestone, underscoring the need for adherence to statutory timelines. It was held that the CoC and the Resolution Applicant had considered and dealt with those Homebuyers who have not submitted claims, and decided not to entertain their claims belatedly, owing to the peculiar facts of the present case, more specifically the claims from Homebuyers-Second Sale who had been adjusted against unclaimed/unsold flats. The CoC has, thus, exercised its commercial wisdom of not entertaining belated claims from homebuyers in the present case, which was non-justiciable. The above exercise of commercial wisdom by the CoC, besides being non-justiciable, was also in compliance with the provisions of the IBC, which did not provide for any ‘minimum payment’ to Homebuyers in a CIRP. The provisions of Section 30(2) read with Section 53(1) of IBC also did not come to the aid of the Appellants. Thus, there being no minimum payment prescribed for the class of creditors i.e. homebuyers under the IBC, the payment of NIL to them was well within the commercial discretion of the CoC.

FULL TEXT OF THE NCLAT JUDGMENT/ORDER

The Instant Appeal is preferred by the Appellant Ms. Pooja Mehra, who is aggrieved by the order dated 11.08.2023 whereby National Company Law Tribunal, New Delhi Bench-III (hereinafter referred to “The Adjudicating Authority”) had dismissed the I.A. (IBC) No.3462/2021 in C.P. (IB) No. 1771/ND/2018, which is an application filed by the Appellant seeking to condone delay in filing the claim and to direct Respondent No.1 i.e. Resolution Professional Mr. Nilesh Sharma to admit the claim of the Appellant’s in the category of “Financial Creditor”.

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