A belated KPIDFE claim cannot be rejected at the threshold on disputed proof of depositor status.

The appellants claimed to have deposited a total of ₹8,00,000 with M/s. Harsha Entertainment in 2017.

After the establishment defaulted, its properties were attached under the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (KPIDFE Act), and a public notice invited claims by 26 May 2026.

The appellants said they learned of the notice shortly before the deadline and could not timely gather their records; they filed their claim on 4 July 2026, approximately 35 days late.

The Special Court dismissed their application under Section 11(2), finding insufficient evidence that they were depositors, including the absence of a deposit certificate, bond, or agreement.

The appellants challenged that dismissal under Section 16 of the Act.

Whether the Special Court was justified in dismissing the appellants’ Section 11(2) application for permission to submit a belated claim on the ground that they had not established their status as depositors.

Whether the belated claim should be accepted, leaving the merits of the alleged deposit to be determined in the subsequent proceedings.

Section 2(3) of the KPIDFE Act defines a “Depositor” as “a person who has made deposits with [a] Financial Establishment”.

The Court considered the appellants’ request under Section 11(2) to submit a belated claim and exercised appellate jurisdiction under Section 16.

It held that the question whether a claimant made a qualifying deposit should be examined on the merits after the claim is admitted, rather than used as a threshold reason to reject an application for acceptance of a belated claim.

No precedent was cited.

The Court noted that the claim was filed approximately 35 days after the stated deadline and that the appellants attributed the delay to their lack of knowledge of the notice and difficulty retrieving old records.

It considered that the appellants had produced notarised bank statements relating to the alleged deposits and found that the sustainability of the deposit claim was a matter for determination by the Competent Authority on the merits.

Accordingly, the Special Court had erred by dismissing the application at the threshold based on the absence of deposit certificates or bonds, rather than accepting the belated claim and allowing the proceedings to continue.

The appellants’ Section 11(2) application was allowed, and their belated claim was to be accepted for proceedings in accordance with law.

The Court expressly left the merits of the claim open.