Pranav B Prem

The National Company Law Tribunal (NCLT), Allahabad Bench, comprising Praveen Gupta (Member-Judicial) and Ashish Verma (Member-Technical), has held that unlike CIRP proceedings, there is no enabling provision under the liquidation process regulations permitting acceptance of belated claims. The bench dismissed an application filed by Electric Distribution Division-I, Madhyanchal Vidyut Vitran Nigam Limited, seeking condonation of a 45-day delay in filing an appeal against the rejection of its claim by the liquidator of Shree Bhawani Paper Mills Limited.

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The applicant had initially filed its claim on 17.12.2021, nearly 134 days beyond the last date for submission of claims, which was 05.08.2021. The liquidator rejected the claim on 21.12.2021, treating it as barred by limitation. Under Section 42 of the Insolvency and Bankruptcy Code (IBC), 2016, the applicant was entitled to challenge this rejection before the Adjudicating Authority within 14 days. However, even after taking into account the benefit of the Supreme Court’s suo motu extension of limitation in In Re: Cognizance for Extension of Limitation, Suo Motu Writ Petition (Civil) No. 3 of 2020, the applicant was required to file the appeal by 30.05.2022. Instead, it filed the application only on 13.07.2022, i.e., 45 days beyond the extended period, and a separate condonation application was filed even later on 04.09.2022.

The applicant argued that the delay was due to administrative steps, including obtaining approvals from the Deputy Law Officer, appointment of counsel, preparation of the draft, and notarization issues. It also referred to the difficulties caused by the COVID-19 pandemic and the consequent extensions of limitation granted by the Supreme Court. The applicant contended that the delay was bona fide, unintentional, and without malafide.

The liquidator opposed the plea, contending that Section 42 of the IBC prescribes a strict 14-day period with no power to condone delay. Reliance was placed on judicial precedents including National Spot Exchange Ltd. v. Anil Kohli, RP for Dunar Foods Ltd., where the Supreme Court held that courts and tribunals cannot carve out exceptions to limitation periods fixed by statute, even in cases of hardship. The liquidator also cited UCO Bank v. Nicco Corporation Ltd. (In Liquidation), where the NCLT, Kolkata Bench, held that unlike CIRP proceedings, there is no enabling provision under liquidation regulations to accept belated claims. The respondent further argued that “sufficient cause” could not be stretched to cover administrative inefficiencies or government delays, relying on State of West Bengal v. Howrah Municipality.

After hearing both sides, the tribunal noted that the legislative scheme under the IBC is built on strict timelines, particularly in liquidation proceedings where the entire process must be completed within one year. It observed that the applicant’s claim was already delayed by 134 days at the filing stage, and even after rejection, the appeal was filed 45 days beyond the maximum extended period permitted by the Supreme Court’s suo motu orders. The subsequent filing of a condonation application two months after the appeal further demonstrated lack of due diligence.

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The bench concluded that there was no jurisdiction to condone the delay beyond 30.05.2022. It emphasized that “speed is the essence” of the IBC framework and permitting belated claims would defeat the purpose of timely liquidation. The tribunal also noted that since the assets of the corporate debtor had already been auctioned and proceeds distributed to stakeholders, there was no scope for accommodating fresh claims. Accordingly, the NCLT dismissed the application for condonation of delay, and consequently, the appeal itself stood dismissed as barred by limitation.

Appearance

For the Applicant: Sh. Shivendra Bahadur, CGSC  

For Res./Liquidator: Sh. Abhishek Anand with Sh. Krishna Sharma 

Cause Title: Electric Distribution Division-I V. Mrs. Anju Agarwal

Case No: IA No. 229/2022 & IA No.273/2022 IN CP (IB) No.110/ALD/2017

Coram: Praveen Gupta (Member-Judicial), Ashish Verma (Member-Technical)