Amounts Reflected In Corporate Debtor's Records Can't Be Rejected Even If No Formal Claims Are Filed Before Resolution Professional: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Justice Shri V.G. Bisht and Shri Prabhat Kumar (Member Technical) has held that amounts reflected in the books of the Corporate Debtor cannot be rejected even if no formal claims are filed by the Creditors. This Application has been filed on 03.04.2024 by Union of India Through its Secretary, Department of Telecommunication (DOT/Applicant) under Section 60(5) of Insolvency and Bankruptcy Code, 2016 in the Corporate Insolvency Resolution Process (CIRP) of Reliance Communications Limited (Corporate Debtor) for admission of its claim. The Applicant submitted that due to involvement of various wings and absence of Standard Operating Procedure (SOP), the delay in filing the claims occurred. To prevent such delays, the Department has framed SOP for filing the claims in the insolvency proceedings on time. The Applicant had issued several demand notices to the corporate debtor and some of them were also challenged before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT). It was further submitted that the claims of the Respondent were likely recorded in the corporate debtor's accounts and the RP was aware of them. Therefore, the claims of the Applicant cannot be rejected as the delay was committed due to unavoidable circumstances and was not intentional. The Tribunal observed that proviso to Regulation 12 of the CIRP Regulations permits the filing of claims up to the later of the issuance of the Resolution Plan request or 90 days from the date of insolvency commencement. Both the periods came to be expired in 2019 that is before the approval of the Resolution Plan by the Committee of Creditors (CoC). Since the CIRP is to be conducted in a time bound manner, delay beyond this period cannot be condoned. It further observed that the RP has admitted the amounts to the tune of Rs. 452.03 crores towards CAF and Rs. 7.41 crores towards EMR penalty as contingent liabilities in the books of the corporate debtor and the Resolution Plan has still not been approved. The Applicant contended that the amount reflected in the corporate debtor's accounts must be admitted even if formal claims were not filed. The Tribunal while agreeing with the submission of the Applicant held that the amount reflected in the corporate debtor's account as of the insolvency commencement date should have been admitted by the RP. Accordingly, the RP was directed to admit the amounts shown in the books as contingent liabilities. However, as far as the other claims are concerned, they cannot be allowed to be admitted as claims of the creditors stand frozen after the approval of the Resolution Plan by the CoC. Therefore, the present application was partly allowed. Case Title:Union of India Through its Secretary, Department of Telecommunication V/s Anish Niranjan Nanavaty Case Number: IA 1726 of 2024 Judgment Date: 01/07/2025 Click Here To Read/Download The Order

Amounts Reflected In Corporate Debtor's Records Can't Be Rejected Even If No Formal Claims Are Filed Before Resolution Professional: NCLT Mumbai

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Amounts Reflected In Corporate Debtor's Records Can't Be Rejected Even If No Formal Claims Are Filed Before Resolution Professional: NCLT Mumbai

Mohd Malik Chauhan

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