Photo of Gyanendra Kumar

Partner at the Delhi office of Cyril Amarchand Mangaldas. Gyanendra has wide experience in advising and representing clients, both Indian and foreign, across various courts and tribunals in India, with specific focus on commercial disputes, white collar crime, insolvency and bankruptcy, shareholders disputes, mergers and amalgamation, and arbitration and pre-arbitration litigation. He can be reached at gyanendra.kumar@cyrilshroff.com

 

‘Quasi-judicial’ role of liquidators in treating disputed claims under the IBC

The Insolvency and Bankruptcy Code, 2016 (“IBC”) is silent on the treatment of a disputed or contingent claim, which is pending adjudication before a judicial or quasi-judicial body, giving rise to a contentious issue. The decision of the Hon’ble Supreme Court in Committee of Creditors of Essar Steel Limited v. Satish Kumar Gupta[1] brought some clarity vis-à-vis the status of the contingent/ disputed claims for the corporate insolvency resolution process (“CIRP”). The Hon’ble Supreme Court in Essar Steel (supra) upheld a resolution plan, wherein a contingent claim pending adjudication was accorded a notional value of INR 1/-. Subsequently, it became an accepted norm for Resolution Professionals (“RP”) to admit claims that are sub-judice, at a notional value of INR 1/. Though this answers the question of how undisputed claims must be treated by the RP, the Essar judgment also leaves a few issues open to interpretation. Continue Reading ‘Quasi-judicial’ role of liquidators in treating disputed claims under the IBC