By August Attorneys LLP
Introduction
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) has clarified the treatment of belated claims filed after the approval of a Resolution Plan. The Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Technical Members Mr. Barun Mitra and Mr. Arun Baroka, held that such claims are entitled to only a 50% refund under Clause 18.4(xi) of the Resolution Plan. This decision underscores the binding nature of an approved Resolution Plan and the strict compliance required from all stakeholders.
Case Background
The Appellant approached the NCLAT challenging an order passed by the Adjudicating Authority (NCLT, New Delhi) dated 26.07.2023, which dismissed IA No. 5579 of 2021. The IA sought directions to compel the Successful Resolution Applicant (SRA) to consider the Appellant’s claim, allegedly filed on 11.01.2019, and to execute the Conveyance Deed for an apartment in the “IREO RISE” project.
The Appellant had booked both an apartment and a plot under different IREO projects in 2010. While a substantial portion of the consideration amount for the apartment was paid, possession was never delivered. Following the initiation of CIRP proceedings on 17.10.2018, a consumer complaint previously filed by the Appellant was dismissed. Although the Appellant submitted a timely claim for the plot, the apartment-related claim was only filed through email on 07.02.2020, much after the Resolution Plan had been approved by the CoC on 23.08.2019 and later by the Adjudicating Authority on 01.06.2021.
Tribunal’s Findings
The Appellant claimed that the apartment-related claim was initially submitted physically on 11.01.2019 by the father of Appellant No. 2 at the Mohali project office. However, the RP denied receipt of such a claim and clarified that no staff were deployed at the Mohali office. The RP only acknowledged the claim submitted via email on 07.02.2020 and included the Appellant in the List of Financial Creditors dated 30.04.2020.
The Appellant argued that their claim, having been admitted and notified to the SRA, should be governed by Clause 18.4(xv) of the Resolution Plan and not by Clause 18.4(xi), which deals with belated or unverified claims. The RP and SRA, however, contended that the Appellant’s claim fell squarely under Clause 18.4(xi) and accordingly entitled them to only a 50% refund of the principal amount.
The Tribunal rejected the Appellant’s assertion that a claim had been submitted on 11.01.2019, finding no credible evidence to support this. It held that the only valid and acknowledged claim was filed on 07.02.2020, well after the Plan’s approval date of 04.09.2019. The objective of Clause 18.4(xi) was noted to be the protection of even those allottees who had not filed timely claims, allowing their claims to be dealt with at the SRA’s discretion within six months post-approval.
Conclusion
The Tribunal concluded that the Appellant’s belated claim rightly fell within Clause 18.4(xi), and the Adjudicating Authority had committed no error in directing adherence to this provision. The Appellant was held entitled to a refund of ₹28,78,342/-, representing 50% of the principal amount. The appeal was accordingly dismissed without any order as to costs.
This ruling reaffirms the principle that once a Resolution Plan is approved, it binds all stakeholders and must be strictly complied with. Belated claims, unless supported by contemporaneous evidence, will be governed by the specific provisions dealing with such claims, ensuring a fair and orderly resolution process.
Disclaimer
As per the rules of the Bar Council of India, this blog is intended for informational purposes only and does not constitute legal advice. August Attorneys LLP does not intend to solicit clients through this blog. For specific legal advice, please consult a qualified legal professional.