The National Company Law Appellate Tribunal ruled that a claim based on liability determined after liquidation initiation cannot be admitted outside the statutory timeline. The decision reinforces strict compliance with IBC claim filing deadlines.
NCLAT Rejects Delayed Claim in Insolvency Matter
The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal challenging the rejection of a claim filed in a liquidation process, holding that the date of crystallisation of liability does not override the mandatory timeline under the Insolvency and Bankruptcy Code (IBC).
The tribunal observed that even if a liability becomes definite or quantifiable after the initiation of liquidation, the claimant must still conform to the cutoff dates prescribed under Regulation 37 of the Insolvency and Liquidation Regulations, 2016.
"A claim founded on a liability determined post-liquidation initiation cannot be admitted out of timeline,"the bench ruled, reinforcing the statutory scheme of finality in insolvency proceedings.
This ruling underscores the importance of timely claim submission for legal practitioners. It clarifies that procedural timelines under IBC are not subject to equitable exceptions based on when a liability becomes enforceable, thereby promoting finality and efficiency in liquidation processes.