2026 (2) TMI 538 - AT - IBC

Contingent contractual rights dependent on removal of encumbrances and RP claim verification; rejection of uncrystallised claim affirmed

Contingent contractual rights that remain dependent on removal of encumbrances do not crystallise into enforceable claims unless the condition (removal of ... Enforceability of contingent contractual rights dependent on removal of encumbrances - Validity and enforceability of a corporate guarantee/ acknowledgment as contractually binding instrument - principle that an assignee cannot acquire greater rights than the assignor - verification of creditor claims by the Resolution Professional under IBBI regulations - acceptance or rejection of claims and updating of the Information Memorandum by the RP - Whether the impugned order of the Adjudicating Authority affirming the decision of the RP to reject the claim filed by the Appellant suffers from any infirmity. - HELD THAT:- While we are of the view that disputes involving authenticity and genuineness of contractual documents do not fall strictly within the remit of the RP, given the fact that Regulations 10, 12 and 13 of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations,2016 enjoins upon the RP to verify claims submitted by creditors, there was nothing unusual on the part of the RP to take notice that there existed grounds for doubting the authenticity and bonafide of the documents basis which claims were raised. Be that as it may, we do not wish to comment on this aspect since records placed before us do not carry proof as to whether the RP had sought further clarifications from the concerned on this aspect while considering the claims of the Appellant to determine their authenticity and accuracy. Mere existence of documents like the Collaboration-cum-Redevelopment Agreement, Assignment Agreement or the Letter of Guarantee in itself cannot substantiate the claims of the Appellant when the claims were contingent and dependent on removal of encumbrances of the subject property by the Corporate Debtor. We do not find any material on record to substantiate the fact that the encumbrances had been removed and that the title deed of the subject property deposited with the Union Bank of India had been returned to the Corporate Debtor. Further in the present facts of the case when the Appellant has admitted that the Corporate Debtor had not yet fulfilled its obligations to cure the encumbrances over the subject property, though it had expressly undertaken to do so, we have no reasons to disagree with the Respondent-RP that there was no enforceable right enjoyed by RS International or their assignee over the subject property and hence the claim staked by the Appellant lacked foundational basis. It therefore, follows as a logical corollary that the rights of the Appellant still remaining nebulous, amorphous and indeterminate, such contingent rights did not acquire the character of a crystallised and enforceable right, basis which any claim could have been accepted by the RP. Additionally, we also find that Adjudicating Authority has taken cognisance of the fact that the RP while deciding on the acceptance had noticed that the CIRP of the Corporate Debtor was initiated by the Adjudicating Authority vide order dated 15.04.2021 but the Applicant had filed their claim belatedly almost after four years and that too by asserting their contingent rights over an encumbered subject property. Thus, we do not find any error on the part of the RP to not have updated the Information Memorandum in respect of the subject property or in rejecting the claim of the Appellant and for the Adjudicating Authority to have upheld these decisions of the RP in the impugned order. In result we do not find any merit in the Appeal. The Appeal is dismissed. Issues: Whether the Adjudicating Authority erred in affirming the Resolution Professional's rejection of the Appellant's claim in the CIRP of the Corporate Debtor.Analysis: The impugned decision was examined with reference to the Collaboration cum Redevelopment Agreement, the Assignment Agreement and the letter of 31.03.2021 relied upon as a corporate guarantee. The Collaboration cum Redevelopment Agreement expressly made rights in the subject property contingent upon removal of bank encumbrances and return of title deeds; those conditions remained unfulfilled. The Assignment transferred only rights that the assignor actually possessed, and since the redeveloped units never materialised no vested rights passed to the assignee. The letter dated 31.03.2021 is an unstamped, unilateral communication not executed with the mutual consent of all relevant parties and lacking formal attributes of a binding guarantee; it therefore could not independently crystallise a monetary claim. The Resolution Professional's duty to verify claims under the IBBI Regulations justified scrutiny of authenticity and existence of enforceable obligations, and the Adjudicating Authority correctly upheld the RP's rejection in light of the contingent, indeterminate nature of the asserted rights and the absence of material showing encumbrances had been removed.Conclusion: The Adjudicating Authority did not err in affirming the Resolution Professional's rejection of the Appellant's claim; the appeal is dismissed.