Somani Worsted Limited Through Its ... vs Mr. Amit Aggarwal (Resolution ...

(Arising out of order dated 08.10.2025 passed by the National Company Law Tribunal, New Delhi Principal Bench in I.A. No. 5287 of 2022 in CP (IB) No. 652 (PB)/2019)

In the matter of:

Somani Worsted Limited Through its Authorised Signatory and Director, Mr. Aditya Gupta Having its Registered Office at: 225, Okhla Industrial Estate, Phase III. New Delhi - 110020. ...Appellant Vs.

Mr. Amit Aggarwal (Resolution Professional of Celebration City Projects Private Limited) H - 63, Vijay Chowk, Laxmi Nagar, New Delhi - 110 092. ...Respondent

Present:

For Appellant: Mr. Vivek Kohli, Sr. Advocate along with Ms. Nikita Maheshwari, Mr. Nikhil Aswani and Ms. Vasudha Chadha, Advocates.

For Respondents: Mr. Sumesh Dhawan, Mr. Pankaj Agarwal, Mr. Shashwat Srivastava, Ms. Mrigangi Parul and Mr. Sagar Thakkar, Advocates.

Mr. Akshay Sharma, Advocate for intervener. J U D G M EN T (1st September, 2026)

INDEVAR PANDEY, MEMBER (T)

INTRODUCTORY PARAGRAPH

The present appeal has been preferred by Somani Worsted Limited

("Appellant") under Section 61 of the Insolvency and Bankruptcy Code, 2016,

(hereinafter referred to as 'Code') assailing the Impugned Order dated

08.10.2025 passed by the Adjudicating Authority (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.

Page 2 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 FACTS OF THE CASE

3. Brief facts of the case necessary to decide this Appeal are as under:

i. The dispute traces its origin to a Memorandum of Understanding

executed on 08.01.2010 between the Appellant, Somani Worsted

Limited, and AEZ Infratech Private Limited (now known as ADTV

Communications Private Limited), whereby the Appellant agreed to

book commercial space in a proposed residential and commercial

project to be developed by AEZ in the National Capital Region. Pursuant

to the said arrangement and in fulfilment of its contractual obligations,

the Appellant, on 12.01.2010, advanced a total sum of

Rs.13,60,00,000/- to AEZ through two separate cheques, one for

Rs.2,82,80,000/- and another for Rs.10,77,20,000/-, towards the

booking amount for the proposed commercial space.

ii. Subsequently, AEZ expressed its inability to procure suitable land

for implementation of the proposed project and, through an Inter-

Corporate Memo dated 04.10.2010, proposed that a part of the amount

already advanced by the Appellant be invested in another commercial

project being developed by Celebration City Projects Private Limited, the

Corporate Debtor. At the relevant time, AEZ and the Corporate Debtor

were admittedly owned, controlled and managed by the same group of

individuals. Accepting the said proposal, the Appellant, through its own

Inter-Corporate Memo issued on 04.10.2010, agreed to invest

Rs.9,77,00,000/-, which was already lying with AEZ, in the project of

the Corporate Debtor.

Page 3 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 iii. Pursuant to the aforesaid arrangement, a fresh Memorandum of

Understanding was executed on 07.10.2010 between the Appellant

and the Corporate Debtor. Under the said MoU, the Corporate Debtor

expressly acknowledged receipt of Rs.9,77,00,000/- from the Appellant

and, in consideration thereof, provisionally allotted 50,000 square feet

of commercial space in its project known as "Celebration City

Project", situated at Nehru Vikas Minar, Ghaziabad, Uttar Pradesh,

which was subsequently renamed as "RED Mall". The Corporate Debtor

further undertook to complete construction and hand over possession

of the allotted commercial space within a period of ten years.

iv. According to the Appellant, the transaction stood independently

corroborated through the financial records of the Corporate Debtor,

including its Balance Sheets for the financial years 2014-15 and 2015-

16, wherein the amount of Rs.9,77,00,000/- was reflected as advances

received against properties 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

Page 4 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 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 its claim in Form CA

as a Financial Creditor in a Class (Real Estate Allottee), claiming a total

amount of Rs.18,72,32,458/-, comprising the principal investment of

Rs.9,77,00,000/- along with accrued interest of Rs.8,95,32,458/-.

vii. Upon verification, the Resolution Professional provisionally

admitted the Appellant's claim and, through the List of Creditors

published on 21.04.2022, recognised the Appellant's claim to the extent

of Rs.18,84,95,866.67/-and the Appellant was treated as a Financial

Creditor in a Class. Its name was reflected in the list of creditors

circulated by the Resolution Professional, and it participated in the

meetings of the Committee of Creditors, while exercising its voting

rights.

viii. The position materially changed after 03.05.2022, when the

Resolution Professional received a representation from Sakshi Fincap

Private Limited, described as a related party as well as a financial

creditor of the Corporate Debtor, objecting to the admission of the

Page 5 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 Appellant's claim. The Resolution Professional, on 06.05.2022,

forwarded the same to the Appellant and called upon it to furnish

supporting documents in respect of an already admitted claim.

ix. Responding to the aforesaid communication, the Appellant, on

13.05.2022, submitted a comprehensive reply supported by

documentary evidence explaining the entire chain of transactions

beginning from the payments made to AEZ up to the investment in the

Corporate Debtor's project and reiterating the basis of its claim.

x. The Resolution Professional, through an email dated 25.08.2022,

again questioned the Appellant's claim, asserted that no payments had

been made directly to the Corporate Debtor, called upon the Appellant

to furnish further substantiation and, pending such clarification,

unilaterally categorised the claim as a "doubtful/suspicious

transaction." To address these allegations, the Appellant submitted

another exhaustive response on 06.09.2022, explaining the transaction

in detail and disputing the objections allegedly raised at the instance of

Sakshi Fincap.

xi. It was upon circulation of the List of Creditors for the Fourth

Committee of Creditors meeting on 19.10.2022 that the appellant

discovered that its name had been completely removed from the List of

Creditors.

xii. Aggrieved by the unilateral deletion of its admitted claim, the

Appellant, on 30.10.2022, instituted I.A. No. 5287 of 2022 under

Page 6 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 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 present appeal.

Submissions of Appellant

4. The Learned Counsel submitted that the present Appeal has been

preferred challenging the Impugned Order dated 08.10.2025 passed by the

Adjudicating Authority in IA No. 5287 of 2022 in CP (IB) No. 652 of 2019,

whereby the Application preferred by the Appellant assailing its arbitrary

removal and exclusion from the Committee of Creditors ("CoC") of the

Page 7 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 Corporate Debtor was summarily dismissed. It was submitted that despite

the Respondent initially admitting the Appellant's claim and recognising the

Appellant as a Financial Creditor in a class, the Respondent subsequently

and unilaterally reversed the earlier decision and excluded the Appellant from

the CoC without following the procedure established under law.

5. He submitted that the Appellant is a Financial Creditor in a class whose

claim amounting to Rs.18,84,96,866.67 was admitted by the Respondent on

21.04.2022. The claim emanates from the transaction whereby the Appellant

had advanced an amount of Rs.9,77,00,000 in the year 2010 towards booking

50,000 square feet of commercial space in the RED Mall Project being

developed by the Corporate Debtor. It was contended that the transaction is

supported by extensive documentary evidence, including the Memorandum of

Understanding dated 08.01.2010, the cheques dated 12.01.2010, the Inter-

Corporate Memos dated 04.10.2010, the subsequent Memorandum of

Understanding dated 07.10.2010, the Balance Sheets of the Corporate Debtor

acknowledging the transaction, and the Ledger Account maintained between

the Appellant and the Corporate Debtor. According to the Learned Counsel,

these contemporaneous documents unequivocally establish the existence of

the financial transaction and the corresponding liability of the Corporate

Debtor towards the Appellant.

6. He further submitted that after the admission of its claim, the Appellant

actively participated in several meetings of the Committee of Creditors.

However, at a later stage, the Respondent arbitrarily characterised the

Appellant's transaction as "suspicious and doubtful" solely on the basis of an

Page 8 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 unverified representation received from a related party of the Corporate

Debtor. Acting upon such representation, the Respondent, without issuing

any prior notice or affording an opportunity of hearing to the Appellant,

published a revised list of creditors on 19.10.2022, 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 disbursement of funds in

favour of the Corporate Debtor stands established on the basis of

documentary evidence. Secondly, whether the Appellant's claim against the

Corporate Debtor can be extinguished merely because the Appellant

Page 9 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 simultaneously pursued arbitration proceedings against AEZ Infratech

Private Limited/ADTV Communications Private Limited. Thirdly, whether the

Respondent possessed any authority to review and reject an already admitted

claim without obtaining leave of the Adjudicating Authority. These issues,

according to the Appellant, lie at the core of the present Appeal.

9. The Ld. Counsel submitted that the amount of Rs.9,77,00,000 was

admittedly disbursed for acquiring 50,000 square feet of commercial space in

the RED Mall Project. Such transaction squarely falls within the ambit of

Section 5(8)(f) read with Explanation I of the Insolvency and Bankruptcy Code,

2016, since the transaction possessed the commercial effect of a borrowing.

It was argued that the nature and structure of the transaction, rather than

its nomenclature, determines whether it constitutes a financial debt under

the Code, and in the present case every element necessary to satisfy the

statutory definition is fulfilled.

10. The Ld. Counsel explained the complete chain of transactions giving

rise to the Appellant's financial debt. It was submitted that pursuant to the

Memorandum of Understanding dated 08.01.2010, the Appellant disbursed

an amount of Rs.13.60 crore to AEZ Infratech Private Limited through two

cheques for booking commercial space. Subsequently, by virtue of the Inter-

Corporate Memo dated 04.10.2010, AEZ proposed investment of the

concerned amount in the RED Mall Project being developed by the Corporate

Debtor, which proposal was accepted by the Appellant through another Inter-

Corporate Memo of the same date. Thereafter, AEZ transferred Rs.13.78 crore

to the Corporate Debtor, of which Rs.9.77 crore stood specifically earmarked

Page 10 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 in favour of the Appellant. Finally, under the Memorandum of Understanding

dated 07.10.2010, the Corporate Debtor acknowledged receipt of Rs.9.77

crore from the Appellant and allotted 50,000 square feet of commercial space

in its project. The transaction is further reflected in the Corporate Debtor's

Balance Sheets as well as the Ledger Account maintained between the parties.

It was emphasised that there exists no document 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 of the

Corporate Debtor. What is relevant is whether the Corporate Debtor

Page 11 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 ultimately received the funds and derived the corresponding financial benefit.

Since the transfer of Rs.9.77 crore to the Corporate Debtor remains

undisputed and stands acknowledged in multiple documents, the Appellant's

claim clearly satisfies the ingredients of a financial debt under Section 5(8) of

the Code.

13. The Ld. Counsel further submitted that the reasoning adopted by the

Learned NCLT, namely that the Appellant's participation in arbitration

proceedings precluded it from asserting its claim in the CIRP, is legally

unsustainable. It was argued that there exists no provision under the

Insolvency and Bankruptcy Code prohibiting a creditor from simultaneously

pursuing multiple remedies against different persons liable for the same debt.

A creditor is legally entitled to enforce its rights before different forums so long

as there is no double recovery. Any statutory bar on pursuing multiple

proceedings must be expressly enacted by Parliament, and no such

prohibition exists under the IBC. Consequently, the Ld. NCLT erred in treating

the arbitration proceedings as a ground to reject the Appellant's admitted

claim.

14. He submitted that the legislative framework itself recognises

simultaneous proceedings. Particular reliance was placed upon Regulation

12A of the CIRP Regulations, 2016, which specifically contemplates that

where a creditor realises its claim through another legal proceeding, it is

under a statutory obligation to appropriately update and reduce its claim in

the CIRP to the extent of such realisation. This provision itself demonstrates

that the legislature envisages multiple proceedings and merely prohibits

Page 12 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 unjust enrichment through double recovery. Thus, instead of barring

simultaneous proceedings, the statutory framework provides adequate

safeguards against duplication of recovery.

15. Reliance was also placed upon the judgment of the Hon'ble Supreme

Court in ICICI Bank Limited v. Era Infrastructure (India) Limited, 2026

INSC 201. The Ld. Counsel submitted that the Hon'ble Supreme Court has

authoritatively considered the principles governing election of remedies and

unjust enrichment and has recognised Regulation 12A as an adequate

statutory safeguard. The Supreme Court observed that creditors are obligated

to immediately update their claims 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.

Page 13 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026

17. It was further argued that the Respondent's conduct in unilaterally

reviewing the admitted claim and thereafter arbitrarily removing the Appellant

from the Committee of Creditors was wholly illegal, arbitrary and contrary to

the provisions of the Insolvency and Bankruptcy Code as well as binding

judicial precedents. Such action was undertaken without notice, without

granting any opportunity of hearing and without obtaining any permission

from the Adjudicating Authority. The Learned Counsel submitted that the

Learned NCLT ought to have recognised this manifest illegality instead of

endorsing the Respondent's conduct.

18. It is submitted that the Respondent himself had initially admitted the

Appellant's claim as that of a Financial Creditor in a class after examining all

the relevant documentary evidence. However, thereafter, without any

statutory authority and without seeking leave of the Ld. NCLT, the

Respondent arbitrarily excluded the Appellant from the Committee of

Creditors. According to the Appellant, the Ld. NCLT committed a serious error

in approving such conduct, despite the absence of any power of review vested

in the Resolution Professional.

19. Summing up his arguments, Ld. Counsel submitted that on the merits

of the claim, the disbursement of Rs.9.77 crore in favour of the Corporate

Debtor stands fully established and remains completely uncontroverted. The

documentary evidence, admissions on record, balance sheets, ledger

accounts and affidavit filed by AEZ all unequivocally acknowledge the

transaction. Despite this overwhelming evidence, the Learned NCLT failed to

appreciate the true nature of the transaction and proceeded to dismiss the

Page 14 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 Appellant's claim on an erroneous legal premise. In these circumstances, the

Learned Counsel submitted that the Impugned Order dated 08.10.2025

deserves to be set aside and the Appellant's claim ought to be restored in

accordance with law.

Submissions of Respondent

20. The Ld. Counsel submitted that the Appellant has deliberately sought

to portray the alleged transaction as an independent commercial dealing,

whereas the record clearly establishes that the Appellant; AEZ Infratech

Private Limited; and the Corporate Debtor were closely related group entities

operating under common management and control during the relevant period.

This admitted relationship is a crucial circumstance while appreciating the

evidentiary value of the documents relied upon by the Appellant, particularly

when the alleged 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

Page 15 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 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 entities. In addition, AEZ

Infratech Private Limited held 49% shareholding in the Corporate Debtor and

16.74% shareholding in the Appellant as on 31.03.2011, thereby reinforcing

that all three entities formed part of the same corporate group and were not

independent parties transacting at arm's length.

23. He submits that the Appellant has relied upon the Balance Sheets of

the Corporate Debtor for the Financial Years 2014-15 and 2015-16 to contend

that the alleged amount stood acknowledged therein. However, the said

Balance Sheets were admittedly signed by Mr. M.P. Somani and Mr. Sanjay

Kackar, who were common directors controlling both the Appellant and the

Corporate Debtor during the relevant period. Consequently, such internal

accounting entries amongst related entities cannot, by themselves, constitute

independent evidence of any legally enforceable liability. More importantly,

the alleged amount ceased to appear in the subsequent Balance Sheets of the

Corporate Debtor, which itself demonstrates that the entries were merely

internal accounting adjustments and not reflective of any subsisting debt.

Had there been a genuine financial liability, the same would have continued

to be reflected in the financial statements until its discharge.

Page 16 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026

24. Ld. Counsel submitted that the surrounding facts, namely the common

directors, common management, cross-shareholding, common registered

office and the nature of the accounting entries, conclusively establish that the

alleged transaction was an internal arrangement amongst related group

entities. The documents relied upon by the Appellant, therefore, cannot

independently establish the existence of any genuine or legally enforceable

financial debt against the Corporate Debtor, and the Learned Adjudicating

Authority rightly appreciated these circumstances while rejecting the

Appellant's claim.

25. The Ld. Counsel further submits that the Appellant has completely

failed to establish that any amount was ever disbursed by it to the Corporate

Debtor. The Appellant's own case demonstrates that the amount of Rs. 13.60

Crores was admittedly paid by the Appellant to AEZ Infratech Private Limited

pursuant to the Memorandum of Understanding dated 08.01.2010, and not

to the Corporate Debtor. The alleged disbursement, therefore, never

originated in favour of the Corporate Debtor and the very foundation of the

Appellant'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

Page 17 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 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 were merely book

adjustments amongst related entities and did not represent any genuine

financial transaction with the Corporate Debtor. Had there been an actual

disbursement creating a subsisting liability, there would have been no

occasion to reverse the transaction through journal entries.

28. In these circumstances, the Ld. Counsel submits that the Appellant has

failed to establish the most fundamental requirement of a financial debt,

namely, the actual disbursement of money to the Corporate Debtor. The

Resolution Professional and the Learned Adjudicating Authority, therefore,

rightly concluded that no legally enforceable financial debt stood proved

against the Corporate Debtor.

29. The Ld. Counsel submits that the Memorandum of Understanding

dated 07.10.2010, heavily relied upon by the Appellant, does not create any

enforceable contractual relationship between the parties. The document

Page 18 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 merely records a tentative understanding regarding a proposed commercial

arrangement and expressly contemplates execution of a future definitive

agreement. Admittedly, no Builder Buyer Agreement, Agreement to Sell or any

other final commercial agreement was ever executed between the parties.

Consequently, the alleged MoU never matured into a concluded contract

capable of creating enforceable rights or obligations.

30. A plain reading of the alleged MoU further reveals that it lacks several

essential terms ordinarily found in a genuine commercial allotment

transaction. The document does not specify the precise area to be allotted,

construction specifications, payment schedule or other material contractual

obligations. On the contrary, it specifically records that an additional amount

of approximately Rs.15 Crores was yet to be paid by the Appellant and that a

complete agreement would subsequently be executed before possession was

handed over. These stipulations themselves demonstrate that the parties

never intended the MoU to constitute a final and binding contract.

31. The Respondent further submitted that the Occupancy Certificate in

respect of the project was obtained on 25.05.2016, a fact admittedly

acknowledged by the Appellant in its claim form. Despite having knowledge

of the completion of the project, the Appellant neither sought execution of any

definitive agreement nor initiated any proceedings seeking possession,

specific performance, allotment or refund. Such complete inaction for several

years is wholly inconsistent with the conduct of a genuine allottee asserting

contractual rights.

Page 19 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026

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 Appellant genuinely

believed that the Corporate Debtor was liable to repay the alleged amount,

there was no reason for excluding it from the arbitration proceedings

altogether.

34. He submitted that the Arbitral Tribunal, by Award dated 28.12.2015,

allowed the claims of the Appellant against AEZ Infratech Private Limited. The

principal amount awarded was Rs.24.24 Crores, which admittedly included

the amount of Rs.13.60 Crores allegedly paid by the Appellant to AEZ

Infratech Private Limited. The present claim of Rs.9.77 Crores, now sought to

be enforced against the Corporate Debtor, forms part of the very same

Page 20 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 transaction which was the subject matter of the arbitral proceedings. Thus,

after having pursued and obtained an arbitral award against AEZ Infratech

Private Limited in respect of the same transaction, the Appellant cannot now

seek to re-characterise a part of that claim as an independent financial debt

recoverable from the Corporate Debtor. Such a course is wholly impermissible

and contrary to the Appellant's own earlier stand.

35. The Ld. Counsel further submits that the Appellant has also initiated

execution proceedings, being OMP (ENF.) (COMM.) No. 74 of 2019, before the

Hon'ble Delhi High Court for enforcement of the arbitral award against AEZ

Infratech Private Limited and other judgment debtors. Even at the stage of

execution, the Appellant has continued to pursue its remedies against AEZ

Infratech Private Limited and has never treated the Corporate Debtor as a

debtor in respect of the alleged transaction. The present claim raised during

the CIRP is, therefore, clearly an afterthought, devised only after insolvency

proceedings commenced against the Corporate Debtor. This conduct itself

demonstrates that no independent cause of action was ever understood by

the Appellant to exist against the Corporate Debtor.

36. He further submits that the reliance placed by the Appellant on the

judgment of the Hon'ble Supreme Court in ICICI Bank v. Era Infrastructure

is wholly misplaced and distinguishable on facts. The present case does not

involve any borrower-lender relationship, guarantee obligation, or admitted

disbursement of funds in favour of the Corporate Debtor. On the contrary, the

Appellant has failed to establish even the foundational requirement of a

financial debt, namely, actual disbursement of money to the Corporate Debtor

Page 21 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 and 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 existence

of any legally enforceable financial debt against the Corporate Debtor. The

Resolution Professional acted fairly, diligently and in accordance with law

while rejecting the Appellant's claim, and the Learned Adjudicating Authority

has rightly upheld the said decision by a well-reasoned order. The present

Appeal is, therefore, devoid of merit and deserves to be dismissed with costs.

Page 22 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 ANALYSIS AND FINDINGS

39. We have heard both the parties at length and have gone through all

documents on record. The only issue that arises for determination is:

Whether the Adjudicating Authority rightly upheld such rejection by

holding that the Appellant failed to establish an independent and legally

enforceable financial debt against the Corporate Debtor?

40. The present Appeal arises from the decision of the Resolution

Professional ("RP") to reject the Appellant's claim after its initial admission

during the Corporate Insolvency Resolution Process ("CIRP"). The Appellant

submits that once its claim had been admitted and it had participated in the

meetings of the Committee of Creditors, the RP had no powers to

subsequently review or reject its claim. It is further contended that the

Memorandum of Understanding dated 07.10.2010, the Inter-Corporate

Memos, the ledger accounts and the Balance Sheets of the Corporate Debtor

establish that a sum of Rs.9.77 Crores stood transferred to the Corporate

Debtor, thereby constituting a financial debt within the meaning of Section

5(8)(f) of the Code. According to the Appellant, the arbitral proceedings

initiated against AEZ Infratech Private Limited do not affect its independent

claim against the Corporate Debtor.

41. The Respondent, on the other hand, submits that the claim was only

provisionally admitted and remained subject to verification. It is contended

that the material subsequently examined revealed that no amount was ever

paid by the Appellant directly to the Corporate Debtor. According to the

Page 23 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 Respondent, the documents relied upon by the Appellant merely record

internal accounting adjustments between group entities under common

management and do not establish any legally enforceable financial debt. It is

further submitted that the Appellant itself treated AEZ Infratech Private

Limited as the debtor by initiating arbitration solely against it, obtaining an

arbitral award and continuing execution proceedings 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

Page 24 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 disclose the same registered address. The record further shows that AEZ held

49% shareholding in the Corporate Debtor and 16.74% shareholding in the

Appellant as on 31.03.2011. These facts have also been noticed in the

Impugned Order and have not been disputed by the appellant.

45. The existence of common management does not by itself invalidate the

transaction. However, it requires us to examine the documents relied upon

by the Appellant with greater caution, particularly when the principal

evidence consists of internal records generated between companies under

common control.

46. The Appellant seeks to establish the alleged financial debt primarily

through the Inter-Corporate Memos, the Memorandum of Understanding

dated 07.10.2010, ledger accounts and the Balance Sheets of the Corporate

Debtor. We have carefully examined these documents.

47. It is an admitted position that the original amount of Rs.13.60 Crores

was paid by the Appellant only to AEZ under the Memorandum of

Understanding dated 08.01.2010. No bank statement, RTGS advice, payment

instruction or any banking record has been produced to show that the

Appellant ever transferred any amount directly to the Corporate Debtor. The

ledger entries relied upon by the Appellant merely reflect accounting

adjustments and do not establish actual movement of funds from the

Appellant to the Corporate Debtor. Significantly, the ledger itself records that

the alleged amount was subsequently reversed in favour of ADTV

Communications Private Limited (formerly AEZ Infratech Private Limited) on

Page 25 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 01.04.2017. This circumstance supports the conclusion that these entries

represented internal accounting adjustments amongst related entities rather

than evidence of an independent financial transaction. Mere journal entries

or book adjustments, in the absence of any corresponding banking trail,

cannot by themselves establish a legally enforceable financial debt under the

Code.

48. The Memorandum of Understanding dated 07.10.2010 also does not

advance the Appellant's case. A plain reading of the document shows that it

merely records a preliminary understanding. It neither identifies any specific

commercial unit nor contains several essential terms ordinarily found in a

concluded commercial allotment, such as construction specifications,

payment milestones and other material contractual obligations. More

importantly, the document itself contemplated payment of an additional

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

Page 26 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 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 Appellant itself

treated AEZ as the entity liable under the transaction. Having pursued and

obtained an award against AEZ, the Appellant cannot now seek to treat the

same transaction as giving rise to an independent financial debt against the

Corporate Debtor without establishing a separate legal obligation on its part.

50. The Appellant has also relied upon the Balance Sheets of the Corporate

Debtor for the Financial Years 2014-15 and 2015-16. However, these Balance

Sheets were signed by Mr. M.P. Somani and Mr. Sanjay Kackar, who were

common directors managing both the Appellant and the Corporate Debtor

during the relevant period. In the facts of the present case, such internal

accounting records cannot, by themselves, be treated as conclusive proof of

an independent liability. More importantly, the alleged liability does not

continue to appear in the subsequent Balance Sheets, indicating that the

entries were merely internal accounting adjustments and not

acknowledgment of any subsisting liability of the Corporate Debtor.

51. Once the RP, during the process of verification, found that the Appellant

had failed to establish an independent financial debt against the Corporate

Debtor, he was justified in revisiting the earlier admission of the claim. The

RP is required to verify the genuineness of every claim on the basis of the

Page 27 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 material available on record and cannot mechanically continue an incorrect

admission.

52. In this regard, we take note of Regulation 13 of CIRP Regulations, which

is extracted below:

Regulation 13: Verification of claims.

13. (1) The interim resolution professional or the resolution professional, as the case may be, shall verify every claim, as on the insolvency commencement date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it.

53. It can be seen from the Regulation 13(1) that it is the responsibility of

RP to regularly update the claims in respect of various creditors based on

latest information available with him. Accordingly, we are of the view that the

RP has rightly rejected the Appellant's claim upon verification, and the

Adjudicating Authority rightly declined 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.

Page 28 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026

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 principles relating to election of remedies

and unjust enrichment considered in the said judgment have no application

to the facts of the present case.

56. The Appellant has also relied upon Rajnish Jain v. Manoj Kumar

Singh & Ors., Company Appeal (AT) (Ins.) No. 519 of 2020 and Byju

Raveendran v. Aditya Birla Finance Limited & Ors., Company Appeal (AT)

(CH) (Ins.) No. 120 of 2025, to contend that the Resolution Professional had

no jurisdiction to review an admitted claim. There is no dispute with the

settled principle that a Resolution Professional does not exercise adjudicatory

powers. However, in the present case, the Resolution Professional did not

adjudicate any disputed rights, but merely verified the claim on the basis of

the material available on record and found that the Appellant had failed to

establish an independent financial debt against the Corporate Debtor. The

rejection of the claim was thus an exercise of the Resolution Professional's

statutory duty of verification and updation of claims, and not an adjudication

Page 29 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026 of rights. Accordingly, the decisions relied upon by the Appellant are

distinguishable on facts and do not apply to the present case.

57. On an overall consideration of the record, we find that (i) the original

payment was admittedly made only to AEZ Infratech Private Limited; (ii) no

independent evidence establishes transfer of funds by the Appellant to the

Corporate Debtor; (iii) the documents relied upon by the Appellant are internal

records exchanged amongst entities under common management and do not

establish an independent liability; (iv) the Memorandum of Understanding

dated 07.10.2010 remained only a preliminary understanding and never

matured into a concluded commercial agreement; (v) despite knowledge of the

Occupancy Certificate, the Appellant never enforced any alleged allotment

rights against the Corporate Debtor and instead pursued arbitration and

execution only against AEZ; and (vi) the Appellant has failed to establish an

independent financial debt against the Corporate Debtor within the meaning

of Section 5(8) of the Code.

58. In view of the findings above, we do not find any infirmity in the

impugned order. The Appeal is dismissed. Pending IA's, if any, are disposed

of. No order as to costs.

[Justice N. Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) Place: New Delhi Harleen/ Pragya (LRA)

Page 30 of 30 Company Appeal (AT) (Ins.) No. 150 of 2026