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NCLAT holds RP can revisit admitted claim if fails to establish debt
NCLAT upholds RP's power to re-examine claims, dismisses Somani Worsted's appeal for lack of .
The , , has affirmed that a (RP) is not bound by an initial admission of a claim and can revisit it during subsequent if the material on record fails to establish an . A three-member bench comprising Justice N. Seshasayee (Judicial Member), Arun Baroka, and Indevar Pandey (Technical Members) dismissed an appeal by challenging the deletion of its already admitted claim from the list of creditors of (Corporate Debtor).
The Dispute: A Claim Built on Internal Adjustments
The dispute traces back to a executed in , under which Somani Worsted paid ₹13.60 crore to for booking commercial space. When AEZ could not secure land, it proposed transferring part of the amount—₹9.77 crore—to Celebration City Projects for a project called 'RED Mall.' A fresh MoU between Somani Worsted and the Corporate Debtor acknowledged receipt of this amount and provisionally allotted 50,000 sq. ft. of commercial space.
After the Corporate Debtor was admitted into the in , Somani Worsted submitted a claim of ₹18.72 crore as a in the class of real estate allottees. The RP initially admitted the claim and included Somani Worsted in the , where it exercised voting rights.
However, a related party ——raised objections. The RP then sought further documents from Somani Worsted. After reviewing the material, the RP concluded the transaction was "suspicious and doubtful" and removed Somani Worsted's name from the list of creditors. Aggrieved, Somani Worsted approached the , which upheld the RP's decision, leading to the present appeal.
Arguments: vs. Finality
Somani Worsted argued that once a claim is admitted, the RP lacks jurisdiction to review or reject it without obtaining leave from the Adjudicating Authority. It relied on the NCLAT's decisions in and to assert that the RP does not have . It also contended that the MoU, balance sheets, and ledger entries conclusively proved the and that the against AEZ did not bar a separate claim against the Corporate Debtor.
The RP , on the other hand, submitted that the claim was only and remained subject to . He argued that Somani Worsted had failed to produce any banking records showing direct payment to the Corporate Debtor. The ledger entries were merely internal adjustments among related entities under common management, and the MoU never matured into a concluded agreement. Moreover, Somani Worsted had itself treated AEZ as the debtor by initiating arbitration only against it and obtaining an award for the same transaction.
Legal Analysis: No Independent Debt, No Claim
The NCLAT closely examined the relationship between the entities. It noted that M.P. Somani and Sanjay Kackar served as directors of both the Appellant and the Corporate Debtor, and AEZ held significant shareholding in both. While common management does not invalidate a transaction, it warrants stricter scrutiny of internal records.
The Tribunal found that Somani Worsted had not produced any bank statement, RTGS advice, or payment instruction showing actual funds transfer to the Corporate Debtor. The ledger entries relied upon were reversed in , indicating they were mere . The MoU of was a preliminary document that lacked essential terms and contemplated a future agreement—which was never executed.
Crucially, Somani Worsted's conduct contradicted its claim of an independent debt. Despite knowing that an
was obtained in
, it never sought possession or refund from the Corporate Debtor. Instead, it pursued arbitration only against AEZ and continues
against that entity.
"This conduct clearly indicates that the Appellant itself treated AEZ as the entity liable under the transaction,"
the bench observed.
Key Observations
"Once the RP, during the process of , found that the Appellant had failed to establish an against the Corporate Debtor, he was justified in revisiting the earlier admission of the claim. The RP is required to verify the genuineness of every claim on the basis of the material available on record and cannot mechanically continue an incorrect admission."
"Mere or , in the absence of any corresponding , cannot by themselves establish a under the Code."
"Having pursued and obtained an award against AEZ, the Appellant cannot now seek to treat the same transaction as giving rise to an against the Corporate Debtor without establishing a separate legal obligation on its part."
The Tribunal distinguished the precedents cited by Somani Worsted, noting that the RP in this case was not adjudicating rights but performing his statutory duty of under . It also referred to its earlier ruling in , which held that the RP must exercise and is not required to .
Decision: Appeal Dismissed
The NCLAT concluded that Somani Worsted had failed to establish an against the Corporate Debtor. The RP's decision to delete the claim was upheld, and the appeal was dismissed with no order as to costs. The ruling reinforces the RP's authority to conduct thorough even after initial admission, preventing the CIRP from being burdened with unsubstantiated claims.
