The NCLAT dismissed an appeal holding that a claim based on liability determined after liquidation initiation cannot be admitted outside the prescribed timeline. The date of crystallisation of liability does not override the IBC's claim submission deadlines.
NCLAT Rejects Late Claim in Liquidation: Crystallisation Date Not Determinative
The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal challenging the rejection of a claim filed beyond the stipulated period in a liquidation process. The tribunal ruled that a claim arising from a liability determined only after the initiation of liquidation cannot be admitted merely because the liability crystallised later.
The NCLAT emphasized that Section 53(1)(a) of the Insolvency and Bankruptcy Code (IBC) mandates strict adherence to timelines for submitting claims during liquidation. It observed that
"the date of crystallisation of a liability does not override the statutory requirement to file claims within the advertised deadline", reinforcing procedural finality in liquidation estates.
This decision clarifies that even if a debt becomes quantifiable only post-liquidation commencement, creditors must file provisional claims or seek timely extensions. Practitioners must ensure proactive engagement in liquidation processes to protect client interests, particularly in cases involving contingent or deferred liabilities.