Disputed Liability Over Rs. 23 Crores for Undelivered Vehicles Not Admitted; Applicant Directed to Pursue Contractual Remedies Outside Insolvency Process
In a significant ruling dated October 7, 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, dismissed an interlocutory application filed by Toyota Financial Services India Limited challenging the partial rejection of its financial claim in the Corporate Insolvency Resolution Process (CIRP) of Blu-Smart Fleet Private Limited. The decision was delivered by a bench comprising Mr. Shammi Khan, Member (Judicial), and Mr. Sanjeev Sharma, Member (Technical).
Toyota Financial Services had filed a claim of over Rs. 31.88 crore during the CIRP of Blu-Smart Fleet, alleging entitlement to Rs. 23.20 crore towards advance payments, commitment costs, and damages related to 150 vehicles that remained undelivered under a Vehicle Lease Agreement and its Addendum. The applicant contended that these amounts were paid directly to a third-party supplier, Go Auto Private Limited, pursuant to contractual arrangements.
However, the Resolution Professional (RP) admitted only Rs. 8.59 crore of the total claim and rejected the disputed amount of Rs. 23.20 crore on the ground that the liability of the Corporate Debtor for the undelivered vehicles was neither crystallised nor adjudicated. The RP emphasized that the disputed claim involved interpretation and enforceability issues of contractual clauses, which remained unresolved.
The Tribunal examined the contractual documents, arbitral awards, and other relevant materials. It noted that while arbitral awards existed regarding the delivered vehicles, they did not cover the claim related to the undelivered 150 vehicles. The Tribunal held that the RP, while verifying claims under the Insolvency and Bankruptcy Code (IBC) and related regulations, is not bound to admit claims involving disputed contractual liabilities that require further adjudication.
Reiterating that verification of claims in CIRP must be based on evidence establishing admitted debts, the Tribunal stated that unresolved disputes over the existence and extent of liability cannot be admitted without adjudication. Consequently, it upheld the RP's decision rejecting the disputed claim and dismissed Toyota Financial Services' application.
The Tribunal clarified that the dismissal of the application does not bar the applicant from seeking other legal remedies outside the CIRP for the adjudication of its contractual claims.
This ruling underscores the principle that in insolvency proceedings, claims involving disputed contractual obligations must be supported by clear adjudication of liability before being admitted, ensuring the integrity and orderly conduct of the resolution process.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Resolution Professional is not bound to admit a claim in CIRP where the underlying contractual liability is disputed and not crystallised - Claim for reimbursement, commitment cost and damages relating to undelivered vehicles, paid directly to a third party, was rightly not admitted in absence of adjudication establishing liability of Corporate Debtor.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Section 60(5)(c), IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 Regulations 12, 13
