NCLT Dismisses Belated Claims by Ex-Employees in Indo Global CIRP Case

Tribunal Upholds Timeliness Mandate of Insolvency Process, Denies Ex-Employees' Claims Post-Resolution Plan Approval

In a significant ruling, the National Company Law Tribunal (NCLT) Mumbai Bench has dismissed applications filed by six former employees of Indo Global Soft Solutions and Technologies Pvt. Ltd. The ex-employees sought to admit their delayed claims related to salary dues and other benefits in the ongoing Corporate Insolvency Resolution Process (CIRP) of the company. The tribunal, emphasizing the time-bound nature of the Insolvency and Bankruptcy Code (IBC), ruled these claims as unmaintainable under the law.

The case involved claims submitted by the ex-employees after the Committee of Creditors (CoC) had twice approved a resolution plan. The applicants argued that they were unaware of the CIRP timelines and only learned of their rights when the company's HR representative contacted the Resolution Professional (RP) in October 2023. The RP, however, rejected the claims citing their delayed submission.

Represented by Senior Advocate Chetan Kapadia, the RP contended that the applications were motivated attempts by the ex-promoters to obstruct the insolvency resolution process. The NCLT, presided over by Members Shri. Anil Raj Chellan and Shri. K. R. Saji Kumar, found the claims unjustifiable, noting that the public announcement of the CIRP constituted deemed knowledge for all stakeholders, including ex-employees.

The tribunal referred to the Supreme Court's observations in the case of RPS Infrastructure Ltd. v. Mukul Kumar, highlighting that the process cannot be extended endlessly by allowing belated claims. The judgment underscores the IBC's strict timelines to ensure the efficiency of the insolvency process.

With this ruling, the NCLT reinforced the importance of adhering to statutory deadlines in insolvency proceedings, dismissing the applications as lacking merit. This decision serves as a reminder to all stakeholders, particularly commercial parties, to vigilantly assert their rights within the prescribed timeframes.

Bottom Line:

Insolvency and Bankruptcy Code - Belated claims submitted by ex-employees after the approval of resolution plan by CoC twice are not maintainable under the law.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 60(5), 15, 30(6); Regulations 6, 9, 12, 13(1B)

Mr. Nitin Vasant Adate v. Mr. Ravi Sethia, (NCLT)(Mumbai) : Law Finder Doc Id # 2814804