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TaxTMI 
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2026 (5) TMI 1526
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....rti Foodtech Ltd., who is Respondent No.3 herein, was dismissed. 2. The Appeal has been preferred against the said impugned order primarily on the ground that despite the operational debt claim of the Appellant being admittedly above the statutory threshold prescribed under Section 24(3)(c) of the Insolvency and Bankruptcy Code, 2016,(hereinafter referred to as 'Code'), the Resolution Professional of the Corporate Debtor Mr. Manoj Kumar Mishra/ Respondent No.2, allegedly failed to issue notice of the Committee of Creditors meetings to the Appellant during the Corporate Insolvency Resolution Process. The Appellant has further alleged that although it had filed their claim in Form B during the CIRP, the same was subsequently treated as a "contingent claim" on the basis of an alleged counterclaim raised by Respondent No.2/RP, resulting in complete denial of any payment to the Appellant under the Resolution Plan submitted by the Successful Resolution Applicant-Mr. Jitendra Bhandari/ Respondent No.1. The Appellant has also challenged the CIRP process on the ground that machinery and equipment belonging to the Appellant and merely leased to Respondent No.3/Corporate Debtor were unlawf....
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.... served to Respondent No. 3 as specified in the clause R of the above agreement and no mandatory written notice prior of 180 days as per clause N was given to Corporate Debtor. (v) Subsequently, Sandhya Dinesh Sancheti & Ors. (Financial Creditors) of the M/s Trimurti Foodtech Pvt. Ltd. (Corporate Debtor) initiated insolvency proceedings under the Code against the Respondent No.3/Corporate Debtor. The Corporate Debtor was admitted in Corporate Insolvency Resolution Process (CIRP), vide order dated 11.08.2021 passed by the Adjudicating Authority in CP (IB) No.1139 (MB) of 2020 the Respondent No.2 was appointed as Resolution Professional (RP). (vi) Pursuant to public announcement made during the CIRP, the Appellant submitted its claim as Operational Creditor before the RP in Form-B on 13.09.2021. The Appellant claimed an amount of Rs. 6,81,21,070/- as payable by the Corporate Debtor and submitted supporting documents in relation thereto. The RP vide e-mail dated 02.12.2021 informed the Appellant that the claim was not tallying with books of account of the Corporate Debtor and the claim was under verification. (vii) Respondent No.2/RP issued a legal notice da....
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....(AT)(Ins.) No.829 of 2023 before this Appellate Tribunal. However, during pendency of the proceedings, the Hon'ble Supreme Court in "Greater Noida Industrial Development Authority vs. Prabhjit Singh Soni & Anr." clarified the legal position regarding recall jurisdiction of the NCLT. In light of the said development and availability of alternative remedy, the Appellant sought liberty to withdraw the appeal and pursue recall proceedings before the NCLT. The said liberty was granted by this Tribunal by order dated 09.05.2024. (xi) Thereafter, the Appellant filed I.A. No.4588 of 2024 before the Adjudicating Authority seeking recall of the order dated 31.03.2023 approving the Resolution Plan. In the reply affidavit filed by Respondent No.2/RP, several additional stands were taken. It was contended that as per the books of accounts and audit reports of the Corporate Debtor, the Appellant was actually a debtor of the Corporate Debtor and that an amount of approximately Rs. 55.68 Crores was receivable from the Appellant. The RP also relied upon an alleged letter dated 12.03.2016 purportedly written by the erstwhile Managing Director of the Corporate Debtor demanding approximately ....
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.... It is submitted that the complete silence maintained by the Corporate Debtor over several years clearly establishes that the termination of the Contract had attained finality and stood accepted by all concerned. 7. Ld. Counsel submits that even otherwise, the original tenure of the Contract itself expired on 30.09.2019. Thus, by the time CIRP commenced against the Corporate Debtor on 11.08.2021, not only had the Contract already been terminated nearly four years earlier, but even the maximum contractual tenure had long expired. It is submitted that after expiry of the tenure, no fresh agreement was executed between the parties and no renewal document was ever brought into existence. Therefore, there remained no surviving contractual relationship capable of being revived, continued or renewed by the Resolution Professional. 8. He submits that in the course of CIRP, the Appellant submitted its claim amounting to approximately Rs. 6.81 Crores on 10.09.2021. Thereafter, on 10.01.2022, the list of claims uploaded by the Resolution Professional reflected that all claims, including the claim of the Appellant, were under verification. Subsequently, the Information Memorandum dated 2....
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....that the Sixth Meeting of the Committee of Creditors held on 20.04.2022 included an agenda item relating to the steps taken by the Resolution Professional for issuance of legal notice to the Appellant. However, the agenda notes and explanatory material placed before the CoC were deliberately vague and cryptic. It is submitted that the Resolution Professional suppressed crucial facts from the Committee of Creditors, namely, the earlier termination of the Contract and expiry of the contractual tenure on 30.09.2019. The Resolution Professional also failed to disclose before the CoC that the alleged action proposed against the Appellant was founded entirely upon his own unilateral assumptions regarding continuation and automatic renewal of the Contract. 13. It is the submission of Ld. Counsel that the copy of the legal notice dated 12.04.2022 itself was not placed before the Committee of Creditors and neither were the relevant extracts or contemplated actions disclosed. Consequently, the CoC was never placed in a position to appreciate the illegality and arbitrariness of the action being taken by the Resolution Professional against the Appellant. It is submitted that such concealmen....
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....lution Plan and was instead reflected as "contingent". 17. Ld. Counsel submits that Section 24(3)(c) of the Code casts a mandatory obligation upon the Resolution Professional to issue notice of every meeting of the Committee of Creditors to operational creditors whose aggregate dues exceed the prescribed threshold. It is submitted that the admitted claim of the Appellant by itself crossed the statutory threshold and therefore the Appellant was legally entitled to notice of CoC meetings. However, by artificially converting the admitted claim into a "contingent" claim through the device of an unadjudicated counter claim, the Resolution Professional sought to evade the rigours of Section 24(3)(c) and illegally deprived the Appellant of participation rights in the CoC meetings. 18. He submits that the mandate of Section 24(3)(c) is inviolable and mandatory in nature. He places reliance upon "ANG Industries Ltd. Vs Shah Brothers Ispat Pvt Ltd. & Anr." and "Bhushan Shringarpure & Ors Vs. B.K Mishra & Ors." wherein this Appellate Tribunal held that compliance with Section 24(3)(c) is mandatory and incumbent upon the Resolution Professional. It is submitted that once the Appellant st....
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....ary, illegal and contrary to settled legal principles. Reliance is placed upon CSA Corporation Private Limited vs. Mr. Rajiv Bhatnagar, Associate Builders vs. Delhi Development Authority and M/S Embassy Property Developments Pvt. Ltd. Vs State of Karnataka. It is submitted that the Hon'ble Supreme Court in Embassy Property Developments has clearly held that the purpose of moratorium is merely to preserve status quo and not to create new rights. In the present case, the Resolution Professional has attempted to create entirely new rights and liabilities after commencement of CIRP. 23. Ld. Counsel submits that the Resolution Plan approved by the Ld. Adjudicating Authority was obtained by suppression of material facts and by playing fraud upon the Committee of Creditors as well as the Court. The Resolution Professional deliberately concealed the fact of termination of the Contract, expiry of its tenure, absence of any crystallized counter claim, and the actual status of the Appellant's admitted claim. The selective circulation of the amended Information Memorandum only to the Successful Resolution Applicant further establishes collusion and manipulation of the CIRP process. 24. L....
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....the Corporate Debtor's counter-claim against the Appellant. It is submitted that because of the subsisting disputes and counter-claims, the alleged claim of the Appellant could never have been treated as an admitted operational debt. The existence of such disputes fully justified the treatment of the Appellant's claim as contingent in nature during the CIRP. 28. The Ld. Counsel submits that by order dated 11.08.2021, the Ld. Adjudicating Authority admitted the Corporate Debtor into CIRP under Section 7 of the Code and appointed Respondent No.2 as the IRP, who was later confirmed as the RP. During the CIRP process, the RP examined the claims filed by various stakeholders, including the Appellant. Upon verification, the RP informed the Appellant on 02.12.2021 that its claim did not reconcile with the books and records of the Corporate Debtor. This communication itself clearly demonstrated that the claim was under verification and had not been admitted as a crystallized debt. 29. He submits that on 16.02.2022, the RP circulated Version-1 of the Information Memorandum to the Successful Resolution Applicant/Respondent No.1, wherein the admitted amount against the Appellant's ....
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....tion either before the RP, before the CoC, or before the Adjudicating Authority during the CIRP period. Such prolonged silence and inaction clearly amount to acquiescence and acceptance of the contingent status recorded against the Appellant's claim. 34. It is further submitted that on 17.04.2022, the RP issued notice convening the 6th CoC meeting for the specific purpose of amending the Information Memorandum so as to incorporate the Corporate Debtor's counter-claim against the Appellant and to formally record the contingent classification of the Appellant's claim. Thereafter, on 20.04.2022, the 6th CoC meeting approved the proposed amendment to the Information Memorandum with the requisite majority. The decision was thus taken transparently and strictly in accordance with the commercial wisdom of the CoC. 35. The Ld. Counsel further submits that on 27.04.2022, the RP circulated Version-2 of the amended Information Memorandum to the CoC members. It is submitted that on the same date, the Hon'ble Tribunal passed an order in I.A. (IBC) No. 1055 of 2022 filed by another claimant, namely Ajit Kad, whereby delay in filing claim was condoned and liberty was granted to the RP to fu....
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.... as the treatment accorded to such claim under the plan. Consequently, the allegation of suppression of the Appellant's claim before the Adjudicating Authority is entirely false and contrary to record. 40. It is further submitted that the RP subsequently issued a letter confirming that the Appellant's claim had been recognized in the approved Resolution Plan as a contingent operational creditor claim pending crystallization through arbitration proceedings. The said communication conclusively establishes that the status of the Appellant's claim was always transparent, known, and duly recorded in the CIRP records. Hence, the allegation that the Resolution Applicant or RP concealed any material fact is completely baseless. 41. The Ld. Counsel submits that on 19.08.2023, Respondent No.1/SRA initiated Arbitration Application No. 18 of 2023 before the Hon'ble Bombay High Court, Aurangabad Bench under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, thereby activating the contractual remedy available between the parties. This clearly establishes that the disputes were always intended to be resolved independently through arbitration and not within the framework of th....
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.... after considering all the above facts, documents, contemporaneous records, and the conduct of the parties, the Adjudicating Authority rightly dismissed I.A. (IBC) No. 4588 of 2024 by order dated 16.09.2025. The Ld. Adjudicating Authority correctly appreciated that the Appellant never held the status of an admitted operational creditor, that the Appellant's claim was consistently treated as contingent, and that the Appellant never challenged such classification during the CIRP process. 47. Ld. Counsel submits that the present Company Appeal (AT) (INS) No. 1872 of 2025 is nothing but a belated attempt to reopen a concluded and successfully implemented resolution process despite the Appellant having accepted its recorded position throughout the CIRP proceedings. The Appeal is devoid of merit, contrary to the factual record, and liable to be dismissed with costs. ANALYSIS AND FINDINGS 48. The principal issue which arises for consideration in the present Appeal is whether the Adjudicating Authority was justified in rejecting I.A. No. 4588 of 2024 seeking recall of the order dated 31.03.2023 approving the Resolution Plan, and whether the Appellant has been able to establish any....
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.... and expiry. The Appellant has also alleged that an unadjudicated and uncrystallized counter-claim of the Corporate Debtor was illegally used to render its admitted claim contingent and thereby deprive it of its rights during CIRP. It is further contended that material facts regarding termination of the contract and the basis of the alleged counter-claim were not properly disclosed before the CoC and that the Resolution Plan was approved on a fundamentally erroneous basis. 52. Per contra, the Respondents submit that the Appellant never acquired the status of an admitted Operational Creditor during CIRP because its claim was disputed and remained contingent on account of substantial counter-claims raised by the Corporate Debtor. According to the Respondents, the contractual disputes between the parties existed much prior to commencement of CIRP and notices had already been issued by the Corporate Debtor claiming damages and losses from the Appellant. It is their case that the Resolution Professional was justified in treating the Appellant's claim as contingent in view of the reciprocal claims and disputes between the parties. The Respondents further contend that the Appellant was....
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....cation process is completed. Best Regards Team-IRP-Trimurti Foodtech Pvt. Ltd." 55. The material placed on record shows that the said claim was never finally admitted as an undisputed operational debt payable to the Appellant. The record further shows that serious disputes and counter-claims existed between the parties arising from the same contractual arrangement. 56. We note that the Appellant has placed reliance on the legal notice dated 12.04.2022 issued by the Resolution Professional in regard to its claim being already admitted by the RP. According to the Appellant, paragraph 13 of the said notice clearly admitted its claim. However, on a complete reading of the notice, it becomes clear that the Resolution Professional simultaneously recorded the Corporate Debtor's counter-claim of approximately Rs. 55 Crores and specifically stated that the Appellant's claim was being treated as contingent in view of the reciprocal liabilities and disputes between the parties. 57. In our considered view, the Appellant cannot rely upon one isolated portion of the communication while ignoring the overall context in which the notice was issued. The Resolution Professional neve....
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....omatic renewal of the agreement also does not persuade us. Questions regarding validity of termination, continuation of the contract, interpretation of renewal clauses, and entitlement to damages are matters arising out of disputed contractual rights requiring adjudication in appropriate proceedings. In fact, the record itself shows that arbitration proceedings were also contemplated between the parties. 62. The Resolution Professional, while verifying claims during CIRP, was not expected to conclusively adjudicate complicated contractual disputes in the manner of a civil court or arbitral tribunal. His role was limited to determining whether the claim was undisputed and payable or whether it was contingent and disputed in nature. In the facts of the present case, where substantial reciprocal claims existed between the parties, treatment of the Appellant's claim as contingent cannot be termed arbitrary or illegal. 63. The Appellant has also argued that an unadjudicated counter-claim could not have been used to render its claim contingent. While it is true that claims for damages ordinarily require adjudication before they crystallize, the same does not mean that the Resolutio....
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...., therefore, they were held entitled to notice under Section 24(3)(c) of the Code. In the present case, however, the Appellant's claim was never treated as an admitted operational debt. The Resolution Professional had consistently treated the claim as contingent because substantial counter-claims and contractual disputes were already existing between the parties arising out of the same agreement. The Appellant was informed about such contingent classification during CIRP itself, yet no challenge was made at that stage before the Adjudicating Authority. Therefore, the factual foundation necessary for invoking Section 24(3)(c), namely existence of an admitted operational debt, was itself absent in the present matter. Consequently, the ratio of the aforesaid judgments does not apply to the facts of the present case. 68. The Appellant has further cited the judgement of Hon'ble Supreme Court in "Hardesh Ores Pvt. Ltd. Vs. M/s Hede and Company, (2007) 5 SCC 614". In the Hardesh (Supra) the issue related to renewal of leasehold rights in immovable property and the requirement of execution of a fresh document for renewal of lease. In the present case, the Resolution Professional was not....
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....ent of damages by an Arbitral Tribunal. In the present case, the Resolution Professional was not adjudicating damages or determining final liabilities between the parties. He was only examining the nature of claims placed before him during CIRP. No arbitral determination or judicial adjudication was undertaken by the Resolution Professional. Therefore, the ratio laid down in Associate Builders (supra) do not apply to the present case. 71. Lastly the Appellant places reliance upon the judgeemt of Hon'ble Supreme court in M/s Embassy Property Developments Pvt. Ltd. Vs. State of Karnataka, (2019) 17 SCC 653. The aforesaid judgment deals with issues concerning mining lease approvals and exercise of statutory powers by government authorities during moratorium. In the present case, no new right was created by the Resolution Professional during CIRP. The Resolution Professional merely examined the existing contractual relationship and reciprocal claims between the parties while determining the status of the Appellant's claim. No fresh contractual right or ownership right was created in favour of the Corporate Debtor. The issue here is limited to treatment of the Appellant's claim as co....