The NCLT has ruled that disputed contractual monetary claims fall outside the scope of IBC adjudication, directing the return of assets to protect the Corporate Debtor during the CIRP.
NCLT Protects Assets During CIRP Amid Contractual Disputes
The NCLT Ahmedabad has held that contractual monetary claims that are disputed do not fall within the purview of adjudication under the Insolvency and Bankruptcy Code (IBC). As part of its ruling, the Tribunal ordered the return of 124 electric vehicles to the Resolution Professional to conserve the Corporate Debtor's asset pool during the Corporate Insolvency Resolution Process (CIRP).
The Tribunal's decision underscores the importance of separating disputed claims from the insolvency framework, emphasizing that the IBC is not a venue for adjudicating claims where the underlying contract is contested. This preserves the integrity of the insolvency proceedings.
Practitioners should advise clients to resolve disputed monetary claims through appropriate contractual litigation pathways rather than expecting judgments under the IBC framework. This ruling will influence how creditors and debtors manage pending disputes during insolvency.
“Disputed contractual monetary claims cannot be adjudicated under IBC,” ruled the NCLT.
Citations
- NCLT (2026) NCLT 1238
