Insolvency claim rejected where MOUs and supporting papers were unreliable and failed to prove a legally enforceable debt.

A claim in CIRP may be rejected where the supporting documents are unreliable, forged, or unsupported by satisfactory proof of the alleged debt. The appellant's reliance on MOUs, allotment letters, cheques, and asserted consultancy or liaisoning arrangements did not establish a legally sustainable claim, because no credible agreement, invoices, or service tax payment were proved and the corporate debtor's records supported only payment of Rs. 30 lakhs. The appellate tribunal therefore found no basis to interfere with the reduction of the claim and upheld rejection of the higher claim amount.

---

---

Issues: Whether interference was warranted with the rejection of the appellant's claim, based on the alleged consultancy and liaisoning arrangements, allotment letters, MOUs and cheques, and whether the documents relied upon by the appellant established a legally sustainable debt.

Analysis: The appeal arose from rejection of the appellant's application challenging reduction of his claim in CIRP from Rs. 5.20 crores to Rs. 30 lakhs. The claim was founded on MOUs, allotment letters, cheques and asserted consultancy and liaisoning services. The Tribunal found that there was no reliable material showing any agreement for consultancy or liaisoning services, no satisfactory proof of the invoices or service tax payment, and no basis to accept the claim amount as arising from the documents produced. The record of the corporate debtor supported only payment of Rs. 30 lakhs. The Tribunal also treated the MOUs and allied documents as appearing forged or fraudulent and held that such documents could not form the basis of the claimed debt.

Conclusion: The appellant failed to establish a credible claim beyond Rs. 30 lakhs, and the rejection of the application was upheld.

Ratio Decidendi: A claim in insolvency proceedings can be rejected where the supporting documents are found to be unreliable or forged and the claimant fails to produce satisfactory evidence establishing the debt alleged.

---