Property Alloted In Lieu Of Consultancy Fees Constitutes Financial Debt: NCLT Mumbai
The National Company Law Tribunal, Mumbai Bench, Court-V, comprising Sh. Sushil Mahadeorao Kochey (Member- Judicial) and Sh. Charanjeet Singh Gulati (Member- Technical), has held that a property allotted in lieu of consultancy fees can be considered as a financial debt. The application was filed requesting to issue a direction to the Resolution Professional to admit the claim filed...
The National Company Law Tribunal, Mumbai Bench, Court-V, comprising Sh. Sushil Mahadeorao Kochey (Member- Judicial) and Sh. Charanjeet Singh Gulati (Member- Technical), has held that a property allotted in lieu of consultancy fees can be considered as a financial debt.
The application was filed requesting to issue a direction to the Resolution Professional to admit the claim filed by the applicant in the class of financial creditor.
The applicant claimed that it provided income-tax consultancy services to the company for which certain amount was due. In response, the board of directors of the corporate debtor proposed to settle the outstanding amount by transferring ownership of a commercial shop belonging to the company. Hence, a sale deed was executed in favour of applicant.
The Corporate Insolvency Resolution Process (CIRP) was initiated against the corporate debtor, and an Interim Resolution Professional (IRP) was appointed. The applicant submitted its claim, and the IRP admitted the claim. However, after the respondent took over as the Resolution Professional, the applicant received an email informing that the claim had been rejected.
Contention of the Respondent
The respondent submitted that the resolution by the board of directors is defective in nature. It also highlighted that the resolution was signed by the director, who was not authorised to act as the chairman.
It also submitted that the dues were the consideration for the consultancy services. Therefore, the applicant cannot be considered as a financial creditor under the IBC.
The applicant will come under the classification of operational creditor as per section 5(21) read with Regulation 7 of the CIRP Regulations. Referring to the ruling of Umesh Kumar v. Narendra Kumar Sharma Company, the RP submitted that he has performed his duty by re-verifying the claim of the applicant.
Observations of the Adjudicating Authority
The tribunal observed that it is not in dispute that the applicant has rendered its services to the corporate debtor and dues were settled by transferring him, the ownership of a commercial shop belonging to the company.
The bench further observed that the amount due would be regarded as payment made to the corporate debtor towards the allotment of a commercial unit. Thus, the applicant qualifies as an allottee and, thereby, attains the status of a financial creditor.
Furthermore, the bench discussed that the contention of the respondent that the resolution was defective in nature is a matter of investigation. However, the respondent didn't approach any authority to take any action against it.
The bench lastly referred to the ruling of Mr. Rajnish Jain vs. Manoj Kumar Singh (RP) and Ors and held that if a claim has been admitted or rejected, the resolution professional cannot re-verify it without the approval of the adjudicating authority.
The bench quashed the rejection of the claim and directed the RP to admit the claim of the applicant as a financial creditor.
Case Name: Positive Rays Events Private Limited vs Sheltrex Karjat Private Limited
Case Number: IA/942/2024 in C.P. (IB)/3126(MB)2019
Bench: Sh. Sushil Mahadeorao Kochey (Member- Judicial) and Sh. Charanjeet Singh Gulati (Member- Technical)
Judgment Date: 18.07.2025