NCLAT rules secured creditor barred from claiming hypothecated assets after failing to file claim within 30 days under Regulation 21A of IBC.
NCLAT Rejects Tata Capital’s Late Claim Under IBC Section 52
The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal by Tata Capital Limited, holding that a secured creditor’s failure to submit its claim within the 30-day deadline under Regulation 21A of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, results in a complete bar to asserting rights over hypothecated assets.
The creditor had missed the deadline for filing its claim during the CIRP against an NBFC. NCLAT reaffirmed that timelines under IBC are directory only when they benefit the debtor, but become strict when creditor rights affect the resolution ecosystem.
"Time-bound processes are the cornerstone of IBC’s efficacy. Delay defeats the purpose of timely resolution,"the tribunal observed, citing Innoventive Industries case law.
This decision underscores the importance of strict compliance by financial creditors in CIRP timelines. Practitioners must ensure claims, especially those involving security enforcement, are filed promptly with the Interim Resolution Professional to preserve entitlements under the waterfall mechanism.
Citations
- Insolvency and Bankruptcy Code, 2016, Section 52
- Regulation 21A, IBBI Rules
