Resolution Professional Cannot Suo Moto Reject Claims Once They Have Been Admitted: NCLT Mumbai

The NCLT, Mumbai Bench, comprising Ms. Lakshmi Gurung (Member-Judicial) and Sh. Hariharan Neelakanta Iyer (Member-Technical), has ruled that once the claim of the creditor has been admitted by the resolution professional, it cannot on its own reject it later. The applicant advanced a loan of Rs. 212 Cr. to the corporate debtor, secured by the corporate guarantee and the mortgage deed. The CIRP of the corporate debtor was admitted, and claims were invited. The applicant submitted its claim based on corporate guarantee. The resolution professional initially admitted the claim, but subsequently the claim was rejected, citing the reason that the uninvoked corporate guarantee could not result in a mature claim. While rejecting the claim, the professional relied on the ruling of Ghanashyam Mishra and Sons Private Limited versus Edelweiss Asset Reconstruction Company Limited [(2021) 9 SCC 657] and IDBI Trusteeship Services Limited vs. Abhinav Mukherji & Ors. [2022 SCC OnLine NCLAT 267]. Contention of the Parties The applicant contended that the corporate debtor had waived its right to require prior invocation of guarantee. It contended that in Ghanashyam Mishra (supra) and IDBI Trusteeship (supra), the principal borrower had committed default; however, the lender therein did not invoke the corporate guarantee, whereas in the present case, the applicant did not get an opportunity to invoke the guarantee prior to the initiation of CIRP, as there was no default by the borrower. It further argued that once the resolution professional has admitted the claim, it has no authority to reject the same afterwards, be it for any reason. The applicant also made the alternative prayer for exclusion of assets so mortgaged in its favor from CIRP for the enforcement of the mortgaged rights. Per contra, the respondent argued that the IBC doesn't prohibit rejection of a claim after admission if the same is in contravention with any provisions of the law. And, it relied on sections 14(1)(c) and 238 to argue for disallowing the exclusion of mortgaged assets from CIRP. Observations of the Tribunal The tribunal observed that the role of the resolution professional is administrative and not adjudicatory. Thus, once it had admitted the claims of the creditor, it could not subsequently reject that suo moto in the name of re-verification. Further, the bench observed that in China Development Bank Versus Doha Bank Q.P.S.C. [2024 SCC OnLine 3829, the Hon'ble Supreme Court didn't give any concrete findings, and no legal principle was laid down in that case on either admission or rejection of claims based on uninvoked guarantees. Further, the bench discussed the rulings of China Development Bank (supra), in which the Apex Court comprehensively discussed the scope and nature of the guarantee as well as the admissibility of the uninvoked guarantee. In the said judgment, it was ruled that the claim can be admitted even on the basis of an uninvoked guarantee. Accordingly, the bench ruled that the claim based upon uninvoked is admissible. With the above observations, the application was disposed of. Case Name: L & T Finance Limited v. Divyesh Desai Case No.: I.A. 4404 of 2024 In C.P. No. (IB) 560/MB/C-III/2022 For Appellant: Adv. Shyam Kapadia a/w Adv. Jyotika Raichandani, Adv. Shruti Mania, Adv. Kashmita Belwalkar i/b Solomon and Co. For Respondent: Mr. Pulkit Sharma a/w Adv. Neel Mehta, Adv. Rishab Chandra i/b Vaish Associates Order Date: 10.09.2025 Click Here To Read/Download The Order

Resolution Professional Cannot Suo Moto Reject Claims Once They Have Been Admitted: NCLT Mumbai

Mohd.Rehan Ali

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Mohd.Rehan Ali

Resolution Professional Cannot Suo Moto Reject Claims Once They Have Been Admitted: NCLT Mumbai

Mohd.Rehan Ali

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