Claim Filed During Liquidation Must Be Dealt With U/S 53 Of IBC, NCLT Can't Direct RP To Make Payment Directly: NCLAT Delhi

The National Company Law Appellate Tribunal held that a claim filed during liquidation must be dealt with as per the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016, and the NCLT cannot direct a Liquidator to make payment to any claimant directly. Justice Ashok Bhushan and Arun Baroka said: “We are of the view that when stakeholder filed a claim in the CIRP and in the liquidation, the claim is entitled to be dealt with as per Section 53 of the IBC. The Adjudicating Authority could not have issued any direction to make any payment to any stakeholder, dehors, the distribution as contemplated by the IBC. We, thus, are of the view that direction of the Adjudicating Authority for payment of Rs.2.01 crores to Atul Paper Pvt. Ltd., cannot be sustained.” Background Facts: The Appellant, Atul Paper Pvt. Ltd., entered into an agreement to purchase a commercial unit for from the Corporate Debtor, RG Infra Build Pvt. Ltd. The Appellant paid Rs 2.01 crores and possession of the unit was also handed over but no sale deed was executed in favour. Insolvency Proceedings against the Corporate Debtor commenced on 25.09.2019, on an application filed by M/s Ved Contracts Pvt. Ltd. The Appellant filed a claim of Rs 2.51 crores before the Resolution Professional, which was rejected. When the Resolution Professional got to know that the appellant was in possession of the unit, he filed an application seeking a direction for the appellant to vacate the premises. On 16.03.2023, the NCLT ordered the initiation of liquidation proceedings. The NCLT directed the appellant to vacate the unit but ordered the Liquidator to refund ₹2.01 crores if the unit was sold. Thereafter, the appellant filed a claim of Rs 2.51 crores before the Liquidator, which was rejected by the Liquidator on the grounds of delay. Aggrieved by the vacation order and rejection of the claim, the appellant filed an appeal challenging the order to vacate the unit. The Liquidator challenged the direction to refund ₹2.01 crores, arguing that any payment must follow the IBC priority waterfall. Case Title: Atul Paper Pvt. Ltd. V/s Rakesh Kumar Jain, Liquidator for RG Infra Build Pvt. Ltd. Case Number: Company Appeal (AT) (Insolvency) Nos. 1100 & 1101 of 2024 Judgment Date: 17/07/2025 Appellant: Mr. Kumar Anurag Singh, Mr. Zain A. Khan, Mr. Vijay Mathur, Advocates. Respondent: Mr. Mohit Nandwani, Advocate Click Here To Read Order

Claim Filed During Liquidation Must Be Dealt With U/S 53 Of IBC, NCLT Can't Direct RP To Make Payment Directly: NCLAT Delhi

Mehak Aggarwal

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