Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Online)(NCLT) 6842

NATIONAL COMPANY LAW TRIBUNAL
Sunil Kumar Aggarwal, Judicial Member, Radhakrishna Sreepada, Technical Member
Mahendra Kumar Singhi – Appellant
Versus
G. Murali Gonugunta – Respondent
I.A. 568/BB/2023 in C.P. (IB) No. 30/BB/2021

Advocates:
For the Appellants/Petitioners: Satish Rai
For the Respondents: T Sangamithra

Rental claims for corporate premises during CIRP are inadmissible if not disclosed in the claimant's Income Tax Returns, and unilateral expenditures by creditors without prior approval from the Resolution Professional or Committee of Creditors do not qualify as recoverable CIRP costs.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 14(2), 53, 60(5) - CIRP Regulations - Regulation 31 - Income Tax Act, 1961 - Section 22, 23 - Operational creditor claim - Rental dues and utility charges - Lack of disclosure in Income Tax Returns - Effect on credibility - Held, non-disclosure of rental income in ITRs as per statutory requirements undermines the claim of a genuine lease arrangement - Unilateral expenditure by creditor without RP or CoC approval does not qualify as CIRP costs - (Paras 6.1, 6.2, 6.3)

(B) Corporate Insolvency Resolution Process - Claims verification - Role of RP - Need for consistency - Court cautioned against contradictory submissions by Resolution Professional across concurrent proceedings - (Para 6.7)

Facts of the case:
Applicant, a former director and owner, claimed rental dues and utility expenses from the Corporate Debtor during the CIRP period. The claim was rejected by the IRP/CoC citing lack of supporting evidence and unauthorized nature of expenditure. Applicant approached the Tribunal seeking directions for payment of arrears and ongoing charges.

Findings of Court:
Court observed that the Applicant failed to declare purported rental income in his ITRs, casting doubt on the lease's authenticity. Rental claims were dismissed. Electricity and security claims could only be considered as CIRP costs if verifiable and subsequently ratified by the CoC.

Issues: Whether the Applicant’s claims for rental and utility dues are maintainable as operational debts or CIRP costs notwithstanding the lack of prior approval and absence of statutory tax disclosures.

Ratio Decidendi: Rental claims unsupported by mandatory income tax disclosures are not credible; furthermore, payments made unilaterally without prior approval from the Resolution Professional or Committee of Creditors do not constitute valid CIRP costs.

Result: Application dismissed except for limited verification of electricity and security expenses.

Table of Content
1. overview of the background and the specific reliefs sought by the applicant. (Para 1 , 2)
2. summary of rival contentions regarding lease validity and claim eligibility. (Para 3 , 4 , 5)
3. court analyses the necessity of itr disclosures and the requirements for cirp cost approval. (Para 6)

ORDER

1. Heard the Ld. Counsel for the parties.

2. IA 568/2023 is disposed of vide separate order.

3. It has been informed by the Ld. Counsel appearing for the Indian Bank that they are going to file an impleadment application in I.A No.833/2025.

4. Hard copy awaited in I.A No.952 of 2025.

5. Hard copy of IA 904/2025 listed in Supplementary List -1, is also awaited till next date.

6. List all the other I.As on 02.12.2025.

-Sd- -Sd-

RADHAKRISHNA SREEPADA

MEMBER (TECHNICAL)

SUNIL KUMAR AGGARWAL

MEMBER (JUDICIAL)

IN THE NATIONAL COMPANY LAW TRIBUNAL, BENGALURU

(Exercising powers of Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016)

(Through Physical Hearing / VC Mode (Hybrid))

I.A. 568/BB/2023

C.P. (IB) No. 30/BB/2021

Under Section 60 (5) of the IBC, 2016

read with Rule 11 of the NCLT Rules, 2016

IN THE MATTER OF:

MR. MAHENDRA KUMAR SINGHI

Residing at Mannat, 1st Floor, 2/1A,

Nanjappa Road, Shanthinagar,

Bangalore -560 027 …Applicant

VERSUS

MR. G. MURALI GONUGUNTА

Interim Resolution Professional

M/s. Singhi Buildtech Private Limited

Flat No.1209, 11th Floor, Vasavi MPM Grand,

Yellareddy Guda Road, Opp.South India Shopping Mall,

Ameerpet, Hyderabad-500038 Telangana …Respondents

Last date of hearing: 16.10.2025

Order Delivered on: 03.11.2025

Coram:

1. Shri Sunil Kumar Aggarwal, Hon’ble Member (Judicial)

2. Shri Radhakrishna Sreepada, Hon’ble Member (Technical)

O R D E R

1. The Application has been filed for the following reliefs:

(a) Direct the Respondent to make payment of Rs. 26,03,714.40/- towards rental dues, electricity charges and security charges of the Corporate Debtor for the period 22nd November 2022 to 31 May 2023;

(b) Direct the Respondent to make a payment towards rental dues and security charges of the Corporate Debtor from 1ª April 2023 until the Leased Premises is delivered to the Applicant, details of which will be produced by the Applicant,

(c) Pass such other or further orders as may be deemed just and fit under the circumstances of the case, in the interest of justice and equity.

2. Brief facts germane to the application are as follows:

a) The Applicant, Mr. Mahendra Kumar Singhi, is the sole and absolute owner of a warehouse and office measuring approximately 15,150 sq. ft. and 1,600 sq. ft. respectively, located in Shoolagiri, Hosur, Krishnagiri District, Tamil Nadu, and acquired through a registered sale deed in 2010.

b) These premises were continuously leased to the Corporate Debtor, M/s Singhi Buildtech Private Limited, for use in trading iron and steel and manufacturing operations. The lease was last renewed on 01.04.2022 for a period of 11 months, stipulating a monthly rent of Rs.3,25,000/- and separate escalation as well as charges for electricity and security.

c) In 2021, the Corporate Debtor, facing severe financial distress, initiated proceedings under Section 10 of the Insolvency and Bankruptcy Code, 2016(IBC). The NCLT admitted the case and commenced the Corporate Insolvency Resolution Process (CIRP) on 22.11.2022, appointing the Respondent as the Interim Resolution Professional (IRP).

d) During the ongoing CIRP, the Applicant continued to personally pay utility charges including electricity and security expenses on behalf of the Corporate Debtor, acting in good faith to protect the assets stored on the premises, despite having no legal obligation to do so.

e) After public announcement by the IRP, the Applicant submitted a claim as an operational creditor in Form B, evidencing his demands with supporting documentation: lease deed, utility payment statements, emails, and correspondence notifying the IRP and the Committee of Creditors (C

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2025 Supreme(Online)(NCLT) 6842

NATIONAL COMPANY LAW TRIBUNALSunil Kumar Aggarwal, Judicial Member, Radhakrishna Sreepada, Technical MemberMahendra Kumar Singhi – AppellantVersusG. Murali Gonugunta – RespondentI.A. 568/BB/2023 in C.P. (IB) No. 30/BB/2021

Rental claims for corporate premises during CIRP are inadmissible if not disclosed in the claimant's Income Tax Returns, and unilateral expenditures by creditors without prior approval from the Resolution Professional or Committee of Creditors do not qualify as recoverable CIRP costs.

NATIONAL COMPANY LAW TRIBUNAL
Sunil Kumar Aggarwal, Judicial Member, Radhakrishna Sreepada, Technical Member
Mahendra Kumar Singhi – Appellant
Versus
G. Murali Gonugunta – Respondent
I.A. 568/BB/2023 in C.P. (IB) No. 30/BB/2021