NCLAT Upholds Rejection Of Homebuyer's Claim Filed 4 Days Before CoC Vote On Resolution Plan For Developer

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday upheld the rejection of a homebuyer's claim filed four days before a Committee of Creditors (CoC) meeting to vote on resolution plan, noting that under the CIRP Regulations, belated claims can be admitted only if they are submitted up to seven days before such meetings.

A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed, "When we look at the above CIRP Regulations, it is amply clear that the RP can accept claims only up to seven days before the date on which the CoC is to approve the resolution plan. It is an admitted fact that the Appellant had not submitted their claims seven days before the CoC meeting to approve the resolution plan. The Adjudicating Authority had therefore not committed any error in the given facts and circumstances in not acceding to the request of the Appellant for admission of their claims."

The matter arose from an appeal filed by homebuyer Suman Chopra against an order of the Chandigarh bench of the National Company Law Tribunal (NCLT) rejecting her application seeking admission of a claim of Rs 10.30 lakh in the corporate insolvency resolution process (CIRP) of Chandigarh Overseas Pvt Ltd.

The corporate debtor was admitted into CIRP on February 27, 2023, and a public announcement inviting claims from creditors was issued on July 7, 2023.

Chopra submitted her claim on March 15, 2024, four days before the CoC meeting scheduled on March 19, 2024, to vote on the resolution plan. The resolution professional, Arvind Kumar, declined to admit the claim, citing Regulations 13(1B) and 13(1C) of the CIRP Regulations, which allow verification and collation of belated claims only if they are filed up to seven days before the CoC meeting.

Chopra then filed an application before the NCLT seeking condonation of delay and admission of her claim of Rs 10,30,258. The tribunal dismissed the application, prompting the present appeal.

Chopra told the appellate tribunal that the liability underlying her claim was already reflected in the corporate debtor's records and therefore could not be rejected solely on procedural grounds. She also argued that the resolution professional had not complied with Regulation 6A of the CIRP Regulations, which requires individual communications to be sent to creditors whose details are available in the company's books of accounts.

In support of her case, she relied on earlier NCLAT rulings such as Rahul Jain v. Nilesh Sharma and Sonia Kapoor v. Arunava Sikdar, where the tribunal had directed that belated claims be incorporated into resolution plans.

The resolution professional took a different view. According to the RP, the claim had been filed 245 days after the public announcement inviting claims and was therefore hit by Regulations 13(1B) and 13(1C) of the CIRP Regulations.

It was further submitted that entertaining such claims would derail the resolution process, particularly when the resolution plan had already been approved by the CoC with more than 99% vote share.

The NCLAT noted that there was a delay of 245 days from the date of the public announcement and held that the appellant could not justify ignorance of the timelines, since the public announcement constituted deemed knowledge to creditors.

The bench observed, “Thus, prima facie this is a case where the Appellant for no justifiable and plausible reasons had dropped their guard of being vigilant in pursuing their claims within time-lines.”

The tribunal held that Regulation 13(1B) allows the resolution professional to verify and collate belated claims only if they are filed up to seven days before the CoC meeting for voting on the resolution plan. Since Chopra had filed her claim four days before the meeting, the resolution professional was justified in not admitting it.

The tribunal also found the precedents cited by Chopra to be inapplicable to the present case. Those decisions, it noted, dealt with belated claims filed before Regulations 13(1B) and 13(1C) were introduced in September 2023, whereas Chopra's claim was submitted after those provisions had come into force.

In these circumstances, the appellate tribunal said it found no error in the NCLT's refusal to admit the delayed claim and dismissed the appeal.