TaxTMI 
TaxTMI 
2026 (9) TMI 203
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....(National Company Law Tribunal, New Delhi (Principal Bench)) in I.A. No. 5287 of 2022 in C.P. (IB) No. 652 (PB)/2019, whereby the application filed by the Appellant under Section 60(5) of the Code was dismissed. The appellant has challenged the decision of Mr. Amit Aggarwal, Resolution Professional of Celebration City Projects Private Limited /Respondent of unilaterally deleting its already admitted claim from the List of Creditors during the Corporate Insolvency Resolution Process ("CIRP") of Celebration City Projects Private Limited ("Corporate Debtor"). 2. The Appellant alleges that such deletion was carried out at the instance of a related party-financial creditor, without following the procedure prescribed under the Code and without obtaining prior permission of the Adjudicating Authority. Aggrieved by the dismissal of its application and contending that the Respondent acted beyond the scope of the statutory powers vested in a Resolution Professional, the Appellant has preferred the present appeal seeking restoration of its admitted claim and other consequential reliefs. FACTS OF THE CASE 3. Brief facts of the case necessary to decide this Appeal are as under: ....
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....ties from the Appellant. The Appellant also relies upon the ledger account maintained between AEZ and the Corporate Debtor, which records receipt of the monies from AEZ by the Corporate Debtor and the subsequent credit of the said amount in favour of the Appellant through journal entries, thereby evidencing that the funds originally advanced by the Appellant had ultimately reached the Corporate Debtor for allotment of commercial space in the RED Mall project. v. Despite expiry of the contractual period of ten years and notwithstanding receipt of the occupancy/completion certificate for the project, the Corporate Debtor allegedly failed to hand over possession of the allotted 50,000 square feet of commercial space to the Appellant. vi. Thereafter, the Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on 21.03.2022 pursuant to admission of an application under Section 9 of the Code by the Adjudicating Authority, and Mr. Amit Aggarwal was appointed as the Interim Resolution Professional, who subsequently continued as the Resolution Professional. Following the public announcement inviting claims, the Appellant, on 08.04.2022, submitted ....
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.... its admitted claim, the Appellant, on 30.10.2022, instituted I.A. No. 5287 of 2022 under Section 60(5) of the Insolvency and Bankruptcy Code before the Learned NCLT, seeking restoration of its claim in the List of Creditors and reconstitution of the Committee of Creditors. During the proceedings, the appellant learnt that the Resolution Professional had also filed a separate application under Section 66 of the Code alleging that the Appellant's transaction was fraudulent. xiii. Ultimately, the Adjudicating Authority, by the Impugned Order dated 08.10.2025, dismissed the Appellant's application, holding that the Resolution Professional was justified in rejecting the claim and further observing that the Appellant's claim already stood adjudicated by an Arbitral Award dated 28.12.2015 passed in proceedings against AEZ and, therefore, a fresh claim against the Corporate Debtor in the CIRP was not maintainable. xiv. Being aggrieved by the dismissal of its application; the refusal to restore its admitted claim; and the alleged failure of the Learned NCLT to examine the legality of the Resolution Professional's actions, the Appellant has preferred the pr....
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....022, whereby the Appellant's already admitted claim stood extinguished and the Appellant was consequently removed from the CoC. It was argued that such unilateral action compelled the Appellant to approach the Ld. NCLT by filing the present Application challenging the illegal exclusion. 7. The Ld. Counsel further submitted that the factum of disbursal of funds and receipt thereof by the Corporate Debtor has never been disputed by any party. The principal basis adopted by the Learned NCLT for dismissing the Application was that the Appellant had already obtained an arbitral award against a third party and, therefore, could not seek recovery of the same amount in the Corporate Insolvency Resolution Process. According to the Ld. Counsel, this reasoning proceeds on a complete misconception of law since the arbitral proceedings were directed against a different entity and not against the Corporate Debtor. The existence of another proceeding for recovery of the debt cannot extinguish or erase the independent liability owed by the Corporate Debtor. 8. The Ld. Counsel submitted that the present Appeal essentially raises three issues for consideration. Firstly, whether the disburs....
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.... whatsoever to demonstrate that this amount was ever returned to the Appellant. The documentary trail, therefore, conclusively establishes the financial debt owed by the Corporate Debtor. 11. The Ld. Counsel further submitted that the Appellant's case stands fortified by the affidavit dated 18.09.2020 filed before the Hon'ble Delhi High Court during enforcement proceedings arising out of the Arbitral Award dated 28.12.2015. In the said affidavit, the authorised signatory of AEZ expressly admitted that AEZ had received Rs. 13.60 crore from the Appellant and that out of the said amount Rs. 9.77 crore had been invested for booking commercial space in the Corporate Debtor's project in the name of the Appellant. This categorical admission by AEZ independently corroborates the Appellant's claim and leaves no room for dispute regarding the movement and utilisation of funds. 12. The Ld. Counsel also relied upon the decision of this Appellate Tribunal in Rajeev Kumar Jain v. Uno Minda Limited, Company Appeal (AT) (Ins.) No. 947 of 2022, to contend that there is no legal requirement under the IBC that the financial creditor must directly transfer funds into the account ....
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....upon receiving satisfaction, whether wholly or partially, from any other proceeding. Consequently, the apprehension of double enrichment, which weighed with the Ld. NCLT, is wholly misplaced and contrary to the law declared by the Supreme Court. 16. The Ld. Counsel submitted that the Respondent acted wholly without jurisdiction in reviewing and rejecting the Appellant's already admitted claim. Reliance was placed upon the judgment of this Appellate Tribunal in Rajnish Jain v. Manoj Kumar Singh & Ors., Company Appeal (AT) (Ins.) No. 519 of 2020, wherein it has been categorically held that a Resolution Professional does not possess adjudicatory powers and cannot undertake a review of an already admitted claim. This settled legal position has also been reiterated by the Chennai Bench of this Tribunal in Byju Raveendran v. Aditya Birla Finance Limited & Ors., Company Appeal (AT) (CH) (Ins.) No. 120 of 2025. Accordingly, once the Appellant's claim had been admitted, the Respondent lacked the jurisdiction to reconsider or reject the same on his own accord. 17. It was further argued that the Respondent's conduct in unilaterally reviewing the admitted claim and thereafter....
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....eged liability is sought to be established primarily through internal records generated by these very entities. 21. He submitted that Mr. M.P. Somani served as Director of the Corporate Debtor from 30.09.2008 to 10.01.2018 while simultaneously holding the office of Director in the Appellant company from 28.02.2009 onwards. Likewise, Mr. Sanjay Kackar remained Director of the Corporate Debtor from 01.06.2009 to 09.10.2017 and was also a Director of the Appellant from 22.12.2008 onwards. The Adjudicating Authority has specifically recorded this commonality of directors and management in the Impugned Order, and the Appellant has not disputed the said finding. The undisputed existence of common directors clearly establishes that the entities were functioning under common control during the period when the alleged transaction is stated to have taken place. 22. The Ld. Counsel further submits that the Inter Corporate Memos dated 04.10.2010, exchanged between AEZ Infratech Private Limited and the Appellant, as well as the alleged Memorandum of Understanding dated 07.10.2010, themselves disclose a common registered office address, further demonstrating the close nexus between these e....
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....llant's claim against the Corporate Debtor is contrary to its own pleadings. 26. He submitted that the Appellant has attempted to overcome this fundamental defect by relying upon certain ledger entries to contend that an amount of Rs. 9.77 Crores stood transferred to the Corporate Debtor on 30.11.2010. However, the said ledger entries merely record internal journal adjustments between related group entities and do not establish any actual transfer of funds by the Appellant to the Corporate Debtor. No contemporaneous banking records, cheque details, RTGS transactions, bank statements or any other documentary evidence evidencing actual movement of funds have been produced. Mere accounting entries, in the absence of proof of actual disbursement, cannot create a legally enforceable financial debt under the Code. 27. It is further submitted that the very ledger relied upon by the Appellant demonstrates that the alleged amount of Rs. 9.77 Crores was subsequently reversed on 01.04.2017 in favour of ADTV Communications Private Limited (formerly AEZ Infratech Private Limited). This reversal completely demolishes the Appellant's case, as it clearly establishes that the entries ....
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....efund. Such complete inaction for several years is wholly inconsistent with the conduct of a genuine allottee asserting contractual rights. 32. The prolonged silence of the Appellant clearly establishes that the alleged MoU was never treated by the parties as a binding or enforceable agreement. The Adjudicating Authority, therefore, rightly held that the Appellant failed to establish any legally enforceable liability arising out of the alleged transaction. 33. The Ld. Counsel respectfully submits that the Appellant's own conduct completely belies its present contention that the Corporate Debtor owed it a financial debt. It is an admitted position that the Appellant had invoked arbitration proceedings as early as 2013 in the matter titled M/s Somani Worsted Limited & Ors. v. AEZ Infratech Private Limited & Ors. However, significantly, the Corporate Debtor was never impleaded as a party to the said proceedings. The Memo of Parties forming part of the Arbitral Award clearly demonstrates that the Appellant consciously elected to proceed only against AEZ Infratech Private Limited and other parties, without asserting any claim whatsoever against the Corporate Debtor. Had the Ap....
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....nd the existence of a legally enforceable liability. Consequently, the principles laid down in the said judgment have no application to the facts of the present case. 37. Ld. Counsel submits that the Resolution Professional has acted strictly in accordance with the duties cast upon him under the Insolvency and Bankruptcy Code and the CIRP Regulations. This Appellate Tribunal, in Mr. Umesh Kumar v. Mr. Narendra Kumar Sharma, Company Appeal (AT) (Ins.) No. 100 of 2024, has categorically held that a Resolution Professional is not expected to mechanically or automatically admit every claim filed before him. Rather, the Resolution Professional is under a statutory obligation to scrutinise, verify and seek substantiation of claims before admitting them, so as to ensure that only genuine claims form part of the insolvency resolution process. The Respondent, therefore, rightly exercised due diligence by seeking clarifications and supporting documents from the Appellant before arriving at a decision regarding the admissibility of its claim. 38. In view of the aforesaid facts and circumstances, the Ld. Counsel respectfully submits that the Appellant has failed to establish the existenc....
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....edings thereunder. 42. We have considered the rival submissions and examined the material placed on record. 43. The primary question here is whether the Appellant has been able to establish the existence of an independent financial debt against the Corporate Debtor. Unless such debt is proved, the challenge to the RP's review of the claim becomes only incidental. A claim can continue in the insolvency process only if it is supported by reliable material establishing a legally enforceable debt. 44. At the outset, the relationship between the parties assumes significance. The record shows that the Appellant, AEZ Infratech Private Limited ("AEZ") and the Corporate Debtor were closely connected entities under common management and control during the relevant period. Mr. M.P. Somani remained a Director of the Corporate Debtor from 30.09.2008 to 10.01.2018 and was also a Director of the Appellant from 28.02.2009 onwards. Likewise, Mr. Sanjay Kackar served as Director in both the Corporate Debtor and the Appellant. The Inter-Corporate Memos dated 04.10.2010 and the Memorandum of Understanding dated 07.10.2010 also disclose the same registered address. The record further shows....
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....al amount of approximately Rs. 15 Crores and execution of a detailed agreement thereafter. Admittedly, neither such payment was made nor was any Builder Buyer Agreement, Agreement to Sell or any other definitive agreement ever executed. The Memorandum of Understanding, therefore, never matured into a concluded commercial arrangement capable of creating an enforceable financial debt. 49. The subsequent conduct of the Appellant also does not support its case. The Occupancy Certificate in respect of the project was obtained on 25.05.2016 and the Appellant was admittedly aware of the same. Despite this, it neither sought execution of any Builder Buyer Agreement nor initiated proceedings against the Corporate Debtor seeking possession of the alleged commercial space, specific performance or refund. Instead, the Appellant invoked arbitration only against AEZ Infratech Private Limited. The Corporate Debtor was never made a party to those proceedings. The arbitral award dated 28.12.2015 was passed against AEZ and included the principal amount arising from the very same transaction. Even today, execution proceedings continue against AEZ. This conduct clearly indicates that the Appel....
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....to interfere with the said finding of RP. 54. As held by this Appellate Tribunal in Mr. Umesh Kumar v. Mr. Narendra Kumar Sharma, Company Appeal (AT) (Ins.) No. 100 of 2024, the RP is expected to exercise due diligence while examining claims and is not required to merely rubber stamp them. In the present case, the RP undertook further verification, called for documents and, upon finding that the foundational requirements of a financial debt were not established, rightly rejected the claim. We find no procedural illegality in the exercise so undertaken. 55. The Appellant has relied upon the judgment of the Hon'ble Supreme Court in ICICI Bank Limited v. Era Infrastructure (India) Limited, 2026 INSC 201, to contend that the possibility of double recovery is adequately addressed under the CIRP Regulations. However, the said judgment does not assist the Appellant. The issue in the present case is not whether the Appellant can pursue multiple remedies or whether there is a possibility of double recovery. The real issue is whether the Appellant has established an independent financial debt against the Corporate Debtor. Since the Appellant has failed to establish such debt, the princ....