NCLT directs reclassification of NTPC's claim for fair assessment

The appeal by NTPC Limited against the rejection of its claim by the Liquidator was partially allowed by the National Company Law Tribunal (NCLT), Kolkata Bench. The NCLT directed the Liquidator to classify NTPC Limited's claim as an "other creditor" instead of an "Operational Creditor" and to reprocess the claim, ensuring the best estimate of the claim amount is determined in accordance with regulations. The Liquidator was instructed to comply with the Tribunal's directions and provide the necessary benefit to NTPC Limited.

---

---

Issues Involved:
1. Rejection of NTPC Limited's claim by the Liquidator.
2. Classification of NTPC Limited’s claim under the category of "other creditor".
3. Liquidator's duty to verify and estimate the claim amount.

Issue-wise Detailed Analysis:

1. Rejection of NTPC Limited's claim by the Liquidator:
The Appellant, NTPC Limited, filed an appeal against the order dated 2nd February 2021 by the National Company Law Tribunal (NCLT), Kolkata Bench, which partially rejected their appeal under Section 42 of the Insolvency and Bankruptcy Code, 2016 (I&B Code). NTPC Limited had awarded two contracts to the Corporate Debtor in 2006, which were terminated in 2015 due to non-performance. NTPC Limited then filed a proof of claim as an "other creditor" during the Corporate Insolvency Resolution Process (CIRP) and later during the liquidation process. The Liquidator rejected the claim via an email on 4th September 2019, stating that the claim was disputed by the Corporate Debtor and was not reflected in their books.

2. Classification of NTPC Limited’s claim under the category of "other creditor":
The NCLT observed that the Liquidator erred in not classifying NTPC Limited's claim under the category of "other creditors". The claim did not arise out of the supply of goods or services by NTPC Limited but rather by the Corporate Debtor. Therefore, NTPC Limited could not be classified as an "Operational Creditor". The Liquidator should have classified NTPC Limited as an "other creditor" in terms of Regulation 20 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. The Tribunal partly allowed the appeal to this extent.

3. Liquidator's duty to verify and estimate the claim amount:
The Tribunal highlighted that the Liquidator has the power and duty to call for additional evidence or clarification from the claimant to substantiate the claim. Regulation 25 of the Liquidation Process Regulations requires the Liquidator to make the best estimate of the claim amount if it is not precise. The Tribunal found that the Liquidator failed to perform this duty, especially considering the Adjudicator's award, which had already rejected the Corporate Debtor's counterclaim and required the exact amount of NTPC Limited's claim to be worked out. The Tribunal directed the Liquidator to reprocess NTPC Limited's claim as an "other creditor" and arrive at the best estimate of the claim amount, thereby quashing the Liquidator's communication dated 4th September 2019.

Conclusion:
The appeal was disposed of with directions for the Liquidator to take necessary steps to process NTPC Limited's claim appropriately, ensuring compliance with the relevant regulations and providing the required benefit to NTPC Limited.

---