Laws, Courts & Judgments.

NCLT Dismisses Ex-Employees' Belated Claims, Upholds Sanctity of CIRP Timelines

Mumbai: The National Company Law Tribunal (NCLT), Mumbai Bench, has dismissed applications from six former employees of ‘Indo Global Soft Solutions and Technologies Pvt. Ltd’, reinforcing the strict, time-bound nature of the Insolvency and Bankruptcy Code (IBC). The bench, comprising Shri Anil Raj Chellan (Member, Technical) and Shri K. R. Saji Kumar (Member, Judicial), ruled that claims filed 18 months after the deadline and after the Committee of Creditors (CoC) had already approved a resolution plan cannot be entertained.

The Tribunal held that allowing such delayed claims would be contrary to the mandate of the IBC and would "put a spoke in the wheels" of the Corporate Insolvency Resolution Process (CIRP).

Case Background

The case involved six ex-employees of Indo Global Soft Solutions, the Corporate Debtor, who sought directions against the Resolution Professional (RP), Mr. Ravi Sethia, to admit their claims for unpaid salary, provident fund, and other dues totaling over Rs. 37 lakhs.

The CIRP for the company commenced on April 12, 2022, with the public announcement inviting claims made on April 22, 2022. The last date for submitting claims was May 4, 2022. However, the employees submitted their claims through the company's HR representative only on October 25, 2023, long after the deadline had passed and after the CoC had already approved a resolution plan on August 30, 2023.

Arguments Presented

Applicants' Contentions: The former employees argued that they were small-time employees, unaware of the legal intricacies of the CIRP. They cited financial hardship and illness as reasons for the delay. They contended that their claims were unfairly rejected by the erstwhile RP and that they had even raised a grievance with the Indian Institute of Insolvency Professionals of ICAI (IIIPI).

Resolution Professional's Contentions: The RP, represented by Senior Counsel, countered that the applications were frivolous and potentially motivated by the company's ex-promoters to obstruct and delay the CIRP. It was argued that the resolution plan had already been approved by the CoC and was reserved for final orders by the NCLT. Admitting new claims at this late stage would derail the entire process.

Tribunal's Analysis and Precedent

The NCLT meticulously analyzed the timeline of events and found the delay in filing claims to be substantial and unjustifiable. The claims were submitted not only after the first resolution plan was approved by the CoC but also after a second plan was approved (on July 21, 2025) and reserved for final orders by the Tribunal.

The bench firmly rejected the applicants' plea of ignorance, stating: > "The Applicants who are capable of raising the issue of rejection of claims, escalated with a professional body like IIIP of ICAI cannot be regarded as ignorant of the CIRP of the CD and of the timelines for submission of claims with the RP. It is hard to accept that after public announcement was made by the IRP, these employees and workmen were unaware of their right to submit claims."

The Tribunal heavily relied on the Supreme Court's judgment in ** RPS Infrastructure Ltd. Vs. Mukul Kumar and Anr. (2023)**, which established that a public announcement constitutes deemed knowledge for all stakeholders. Quoting the apex court, the NCLT highlighted that the CIRP cannot be an "endless process" where the plan goes "back and forth."

Final Decision and Implications

Finding the applications devoid of merit, the NCLT dismissed them, stating that stakeholders must be vigilant in asserting their rights within the IBC's prescribed timeframe.

The judgment serves as a critical reminder of the sanctity of deadlines in the insolvency process. It clarifies that once a resolution plan is approved by the CoC, the process moves to a final stage, and belated attempts to introduce new claims will not be entertained, ensuring certainty and finality in corporate resolutions.