Authority: National Company Law Tribunal, Kolkata Bench, Court-II

Order Date: 22 June 2026

Case Overview

The West Bengal Industrial Development Corporation Limited (WBIDC) filed an application under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016, seeking condonation of 195 days delay in lodging its claim of Rs 115,00,20,747.11 against Shree Mahalaxmi Corporation Private Limited (Corporate Debtor) during liquidation proceedings.

WBIDC had sanctioned a term loan facility of Rs 18,00,00,000 (Eighteen Crores) to the Corporate Debtor on 26 June 2009 for establishing a Rolling Mill with 90,000 MTPA TMT Bars capacity. A Term Loan Agreement was executed on 23 February 2011, secured by a first charge via hypothecation over all movable assets of the Corporate Debtor's Domjur unit, ranking pari passu with State Bank of India's term loan facilities.

The Corporate Debtor defaulted on repayments, leading WBIDC to issue several demand notices. Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor on 23 February 2024 by NCLT Kolkata. WBIDC submitted its claim to the Resolution Professional on 21 September 2024, but it was rejected as the claim submission period had expired. The tribunal ordered liquidation of the Corporate Debtor on 20 June 2025.

WBIDC attributed the delay in submitting the claim to the liquidator to medical complications (slip disc and associated ailments) suffered by its Advocate-on-Record, Mr. Saubhik Chowdhury, which caused the matter to escape his attention. The applicant finally submitted its claim to the liquidator via email on 20 February 2026 but received no response.

The tribunal noted that despite the Resolution Professional's email on 23 September 2024 explicitly informing WBIDC about the pending liquidation application and advising them to submit claims to the liquidator, WBIDC failed to take timely action. The bench observed that WBIDC adopted a "negligent and lackadaisical approach" and could have engaged another advocate to meet the timelines under IBC 2016.

Final Outcome

The NCLT allowed the application (I.A. (IB) No. 528/KB/2026) and directed the liquidator to consider WBIDC's claim on merits. This relief was granted solely because the distribution of liquidation proceeds had not yet commenced, and admitting the claim would not impede the liquidation process. The order explicitly states that this should not be treated as a precedent for cases where distribution has already begun or where admitting belated claims would prejudice other stakeholders. If admitted, WBIDC's inclusion in the Stakeholders' Consultation Committee will operate prospectively without affecting previous decisions.

Topics: Insolvency Claim Admission, Liquidation Process, Debt Recovery