Intervention Application U/S 60(5) Of IBC Can't Be Entertained Beyond Limitation Period Of Three Years: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member) has held that Intervention Application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be entertained beyond the limitation period of 3 years. The present appeal has been filed by the Corporate Person through its Liquidator against an order passed by National Company Law Tribunal (NCLT) by which it allowed the Respondent to intervene in an application under section 59(7) of the Insolvency and Bankruptcy Code, 2016 (IBC). The Appellant submitted that since the application for intervention was filed on 28.08.2019, therefore, it was beyond the period of three years and as such it could not have been taken into consideration for passing the impugned order. It was further submitted that the Respondent sent an e-mail stating that it was in the process of filing the claim based on an invoice dated 28.05.2019. However, no claim was filed before the Liquidator nor the Tribunal. The claim based on the invoice was filed through an intervention application which was time barred even if the period is counted from the date of invoice. It was further submitted that once the voluntary liquidation process is completed by the Liquidator and a dissolution application under section 59(7) of the IBC is filed, no further claims or interventions application can be entertained as the Tribunal has no adjudicatory role at this stage akin to resolution or liquidation process under Part II of the IBC. Per contra, the Respondent submitted that the Tribunal has only allowed the intervention but the matter is yet to be decided on merits once the pleadings are complete.The claim filed by the Respondent before the liquidator is a legitimate claim and a valid claim deserves recognition. The Tribunal noted that Regulations which came into force on 31.03.2017 prescribes a procedure for voluntary dissolution. Once the corporate affairs of the corporate person are completely wound up and assets are also liquidated, an application under section 59(7) of the IBC for dissolution can be filed. When the dissolution application was pending, the Respondent filed an intervention application which was dismissed as time barred. On Appeal, the NCLAT sets aside the order of the Adjudicating Authority and directed it to reconsider the claim of the Respondent based on email date 18.07.2016 The Liquidator under Regulation 14 of the Liquidation Regulations, 2016 invited claims which were to be submitted by 07.03.2018. The Respondent failed to submit the claim within the stipulated time despite having an invoice. Earlier, the Respondent had also issued two demand notices under section 8 of the IBC which were replied to by the corporate person. However no application under section 9 of the IBC was filed. It further observed that the Liquidation process completed the entire process and remitted the amount to stakeholders. Thereafter, the Liquidator also filed the dissolution application. Although the same the Respondent sent an email stating to file the claim. However, no claim was filed but an intervention application was later filed. It concluded that even if the limitation period of 3 years is calculated from 18.07.2016 raising the claim by way of invoice, it expired on 17.07.2019. However, the Respondent had filed an Intervention Application beyond the limitation period. Therefore, the Adjudicating Authority committed an error in entertaining the intervention application as it was clearly time barred. Accordingly, the present appeal was allowed and the impugned order was set aside. Case Title: Nextgen Procon Pvt. Ltd. (Through Its Liquidator Rajesh Panayanthatta) Versus M.R.A Associates Pvt. Ltd. Case Number:Comp. App. (AT) (Ins) No. 1894 of 2024 Judgment Date: 16/07/2025 For Appellant : Mr. Arpit Dwivedi, Advocate. For Respondents: Mr. Saurabh Kalia & S. Shishir, Advocates. Click Here To Read/Download The Order

Intervention Application U/S 60(5) Of IBC Can't Be Entertained Beyond Limitation Period Of Three Years: NCLAT

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Intervention Application U/S 60(5) Of IBC Can't Be Entertained Beyond Limitation Period Of Three Years: NCLAT

Mohd Malik Chauhan

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