Pranav B Prem

The Mumbai Bench of the National Company Law Tribunal (NCLT), Court-V, comprising Judicial Member Sh. Sushil Mahadeorao Kochey and Technical Member Sh. Charanjeet Singh Gulati, has held that property allotted to a consultant in lieu of unpaid professional fees qualifies as “financial debt” under the Insolvency and Bankruptcy Code (IBC), 2016.

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The order was passed in an Interlocutory Application filed by Hitesh Hasmukhlal Damania seeking directions to the Resolution Professional (RP) of Sheltrex Karjat Private Limited to admit his claim as a financial creditor. The applicant had rendered income tax consultancy services to the corporate debtor, for which an amount of ₹26,63,030 remained unpaid. In settlement of these dues, the corporate debtor offered to transfer ownership of a commercial shop in its under-construction project, and a registered Agreement for Sale was eventually executed.

Factual Background

The Board of Directors of the corporate debtor passed a resolution on 23.01.2019 agreeing to adjust the applicant's outstanding consultancy fees against the sale consideration of a commercial unit (Shop No. 101) in the "Sheltrex Smartphone City Project 2" at Karjat. Following this, an allotment letter was issued on 31.01.2019. The parties executed a Memorandum of Understanding (MoU) on 28.09.2020, and the sale agreement was registered on 27.01.2023.

After CIRP was initiated on 01.02.2023, the applicant submitted a claim in Form CA to the Interim Resolution Professional (IRP), who admitted it for ₹26,25,000 under the category of homebuyers. The applicant's name was included in the list of creditors at Serial No. 47.

However, when Manish Lalji Dawda took over as Resolution Professional on 13.06.2023, the applicant received an email on 25.12.2023 stating that his claim had been rejected. The RP argued that since the dues arose from consultancy services, the applicant should be treated as an operational creditor and not a financial creditor. The RP further contended that the board resolution approving the settlement was defective, lacking quorum details and appropriate authorisation, and alleged that taxes and statutory dues were not paid by the applicant.

Tribunal's Findings

The Tribunal held that the applicant had, in fact, rendered services and that the board of directors of the corporate debtor had agreed to adjust the dues by allotting a commercial unit. The Tribunal observed that the applicant’s claim had already been verified and admitted by the erstwhile IRP, who included the applicant under the homebuyer category based on the executed agreement of sale and other documents.

Rejecting the RP’s contentions, the Tribunal noted that the issues raised regarding the validity of the board resolution, non-payment of taxes, or the nature of the allotment should have been taken before an appropriate authority. The RP had not initiated any such proceeding, and therefore could not unilaterally reverse the decision of the IRP.

Relying on the decision of the NCLAT in Mr. Rajnish Jain v. Manoj Kumar Singh (RP) [[2020] Ibclaw.in409 NCLAT], the Tribunal reaffirmed that once a claim is admitted by the IRP, it cannot be reclassified or rejected by the RP without seeking approval from the Adjudicating Authority. It noted that the RP had exceeded his authority by re-verifying and rejecting the applicant’s claim on his own. The Bench also referred to the decision in Dr. Ramakant Suryanath Pande v. CS Prakash K. Pandya [“MA 1435/2018 & IA 76/2018 in CP No. 870/IBC/NCLT/MB/MAH/2017], reiterating that a Resolution Professional is not an adjudicatory authority and is not empowered to decide the legal validity of documents or contractual rights.

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Verdict

The Tribunal held that the applicant was rightly considered a financial creditor. The transaction—where the applicant was allotted a commercial unit in exchange for dues—had the commercial effect of borrowing and fell within the scope of Section 5(8) of the IBC. Therefore, the claim constituted financial debt, and the applicant acquired the status of an allottee and thus a financial creditor. Accordingly, the NCLT quashed the RP’s rejection email dated 25.12.2023 and directed the RP to admit the applicant’s claim as a financial creditor in the same class as admitted by the erstwhile IRP.

Appearance

For the Petitioner: PCS Suraj Sharma (VC)

For the Respondent: Adv. Maulik Chokshi (VC)

Cause Title: Positive Rays Events Private Limited V. Sheltrex Karjat Private Limited

Case No: IA/942/2024 in C.P. (IB)/3126(MB)2019

Coram: Sh. Sushil Mahadeorao Kochey [Member- Judicial], Sh. Charanjeet Singh Gulati [Member- Technical]