A home buyer who missed a deadline forfeited her claim of ₹50 lakh

A home buyer who missed a deadline forfeited her claim of ₹50 lakh

The NCLAT's ruling emphasizes how important it is for creditors taking part in IBC procedures to respond promptly.

The panel said that the purpose of IBC procedures is to be time-bound.

The National Company Law Appellate Tribunal (NCLAT) has upheld the stringent deadlines associated with insolvency procedures under the Insolvency and Bankruptcy Code (IBC) in a recent ruling. The tribunal's decision to reject a creditor's late claim emphasizes how crucial it is to follow the IBC framework's deadlines.

Pooja Mehra v. Nilesh Sharma & Ors. concerned a Noida housing project investor who had made a ₹50 lakh investment in a house. Insolvency procedures were started when the developer, Dream Procon Pvt Ltd, failed to make payments. The homebuyer, Mehra, filed her claim 552 days after the Committee of Creditors (CoC) had authorized a settlement plan, which is a substantial delay.

NCLAT: No Favoritism Towards Individuals Who "Slumber on Their Rights"

The NCLAT panel, which included technical member Arun Baroka and chairperson Ashok Bhushan, emphasized in its decision that the appellant was neglecting his rights. One should not accommodate someone who violates their rights."

The panel went on to say that accepting claims beyond the deadline would compromise the timeliness of IBC procedures. They pointed out that while there are restrictions on these extensions, creditors do have some flexibility to submit claims beyond the original date.

Consequences for Resolution Plans and Creditors

The NCLAT's ruling emphasizes how important it is for creditors taking part in IBC procedures to respond promptly. Claims that are not submitted within the allotted time constraints may be excluded from the settlement process. Furthermore, the decision emphasizes how important it is to preserve the integrity of authorized resolution plans.