Disputed recovery claims need independent adjudication; insolvency jurisdiction cannot be used to decide contested debtor liability.

Section 60(5)(b) of the Insolvency and Bankruptcy Code does not confer jurisdiction on the Adjudicating Authority to decide disputed recovery claims that require evidence and independent factual determination. Where sundry debtors contest liability, the liquidator cannot use summary insolvency proceedings to obtain a recovery determination that would bypass ordinary civil adjudication. Such claims must be pursued through the appropriate legal forum, and the NCLT's role remains confined to matters with a direct insolvency nexus. The application for recovery was therefore held not maintainable before the Adjudicating Authority.

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Issues: Whether the Adjudicating Authority had jurisdiction under Section 60(5)(b) of the Insolvency and Bankruptcy Code, 2016 to entertain a liquidator's application for recovery of amounts allegedly due from sundry debtors, where the liability was disputed and adjudication would require evidence.

Analysis: The dispute raised by the sundry debtors was not a mere accounting exercise and involved contested questions as to whether any amount was actually payable. Such claims could not be resolved in summary insolvency proceedings under Section 60(5)(b), as that would effectively bypass ordinary judicial processes. The statutory scheme of the Code contemplates the liquidator taking control of assets and pursuing appropriate legal proceedings for recovery where necessary, but not obtaining a recovery determination on disputed facts without trial-like adjudication. The scope of Section 60(5) is confined to matters having the requisite nexus with insolvency and does not permit the NCLT to short-circuit independent civil adjudication for disputed monetary claims.

Conclusion: The application for recovery was not maintainable before the Adjudicating Authority under Section 60(5)(b); the finding that such recovery must be pursued through appropriate legal proceedings was upheld.

Ratio Decidendi: Section 60(5)(b) does not confer jurisdiction on the NCLT to adjudicate disputed recovery claims requiring evidence and independent factual determination, and such claims must be pursued through the appropriate legal forum.

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