Approved Resolution Plan Cannot Be Reopened For Belatedly Agitated Claims: NCLAT

The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson), Barun Mitra (Member (Technical) and Arun Baroka (Member (Technical), dismissed a set of four appeals filed under Section 61 of Insolvency and Bankruptcy Code 2016 stating that the appellants had failed to exercise due diligence on protecting their rights with the prescribed timelines. Brief Facts The case involves the adjudication of four appeals filed by multiple appellants, primarily home buyers, who had invested in a real estate project named “Earth Iconic” developed by Earth Infrastructure Ltd. (EIL). The appellants had paid a substantial amount towards the purchase of units in the project. However, due to financial distress, EIL underwent a Corporate Insolvency Resolution Process (CIRP). Subsequently, Celestial Estate Pt. Ltd (CEPL) also entered CIRP. The Resolution professional (RP) of CEPL had issued public notices inviting claims in April, 2019. The appellants did not file their claims within this period and only became aware of the CIRP proceedings in December 2023, by which time the resolution plan had already been approved by the Committee of Creditors (CoC) and by the Adjudicating Authority in March 2021. The appellants argued that they were unaware of the insolvency proceedings and that the RP had also not taken proper measures to send personalized notifications to them despite their name s being rectified in the records of the Corporate Debtor. The Appellants also quoted the judgement of NCLAT in Puneet Kaur Vs KV Developers Ltd. in CA(AT)(Ins) No. 390 of 2022, stating that it has been clearly held that claim of home-buyers who could not file their claims but whose claims are reflected in the record of the Corporate Debtor ought to be included in the Information Memorandum. They also stated that the Successful Resolution Applicant (SRA) cannot be unfair to the Appellants only because their claims are not reflecting in the Information Memorandum of the Corporate Debtor. The Tribunal ruled against the appellants and hence the following appeals. NCLAT Judgement The National Company Law Appellate Tribunal (NCLAT) in its judgement dismissed all the four appeals filed by the appellants stating that the appellants had filed their claims after an inordinate delay of several years even though the corporate insolvency resolution process had already commenced. The tribunal in its judgement stated: “To expect belated claims to be accepted by the SRA and that too after such a massive delay of 1700 days from the last date for filing of claims would tantamount to subjecting the SRA to the uncertainty of undecided claims.” The court also dismissed the opinion of the appellants by citing the Puneet Kaur judgement wherein they stated that the appellants are required to prepare proper information memorandum after considering the books of the corporate debtor. The court stated that the facts of the judgement are completely different and that in the following case the parties were 1 year late in filing the claims and the resolution plan was not been approved by the adjudicating authority. The court cited the judgement of Ghanshyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited (2021) 9 SCC 657 stating that once resolution plan is approved by the Adjudicating Authority, the claims as provided in the resolution plan shall stand frozen and all claims which are not part of the resolution plan shall stand extinguished. The court also cited the judgement of M/s RP Infrastructure Ltd. vs Mukul Kumar & Anr. in Civil Appeal No. 5590 of 2021 stating that even after the resolution plan is approved by the CoC and is pending before the Adjudicating Authority, new claims cannot be imposed upon the resolution applicant. In conclusion, the NCLAT found no problem in the decision of the Adjudicating Authority stating that the appellants had failed to exercise due diligence on protecting their rights with the prescribed timelines and the appeals were dismissed accordingly. Case Title: Shri Krishan V. H.S Oberoi Buildtech Private Ltd. Case Number: Company Appeal (AT) (Insolvency) No. 128 of 2025 Tribunal: National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi For Appellants: Mr. Ketan Madan and Mr. Dhananjay Jain, Advocates. Coram: Justice Ashok Bhushan (Chairperson), Barun Mitra (Member (Technical) and Arun Baroka (Member (Technical), Date of Judgement: 07.03.2025 Read/Download Order Here

Approved Resolution Plan Cannot Be Reopened For Belatedly Agitated Claims: NCLAT

Pratham Kapoor

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