Form‑B Contemplates Mutual Dealings: NCLAT Admits CNH Industrial’s ₹3.40 Cr Net Claim After Set‑off but Confirms Nil Payout in CIRP [Read Order]

The National Company Law Appellate Tribunal (NCLAT), principal bench, New Delhi, in a recent case, has clarified that Form B under the CIRP Regulations permits disclosure of mutual dealings and set‑off at the claim stage.

Upholding CNH Industrial’s filing, the Tribunal admitted its net claim of ₹3.40 crore after adjusting dues payable under a risk pool arrangement. However, the appellate body highlighted that such an admission does not alter the approved Resolution Plan, which provides a Nil payout to operational creditors.

The case arose from CNH Industrial’s< the appellant and the operational creditor of the corporate debtor challenge to the Resolution Professional’s refusal to admit its net claim after set‑off, despite Form B under Regulation 7 of the CIRP Regulations expressly providing for disclosure of mutual credits and debts.

CNH Industrial had entered into a cooperation agreement with SREI, the corporate debtor (CD) in July 2016, under which it earned an origination fee of 4.5% of the monthly aggregate RNBV for financing its agricultural equipment sales.

In January 2018, the parties executed a Memorandum of Understanding (MoU) requiring CNH to contribute to a risk pool, thereby making it liable to pay fixed sums to SREI to cover customer defaults.

When CIRP commenced against SREI, CNH filed its claim in Form‑B on 22 October 2021, disclosing receivables of ₹8.97 crore and payables of ₹5.56 crore under the MoU, resulting in a net claim of ₹3.40 crore.

The Resolution Professional, however, rejected the set‑off and demanded payment of the ₹5.56 crore liability from CNH, arguing that the moratorium under Section 14 of the Insolvency and Bankruptcy Code (IBC) barred such adjustment. CNH appealed to NCLAT, contending that Form B itself contemplated set‑off and that its claim was validly filed.

NCLAT examined Regulation 7 and Form‑B, noting that Column 8 specifically requires operational creditors to disclose “details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set‑off against the claim.”

The two-member bench of Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that this provision clearly permits creditors to present net claims after set‑off. It rejected the argument that a moratorium prevents such disclosure, clarifying that filing a claim with set‑off is not an enforcement action but part of the insolvency process itself.

The appellate body highlighted that while liquidation regulations separately provide for set‑off, the CIRP framework already incorporates the concept through Form B. Therefore, CNH’s claim of ₹3.40 crore after set‑off was validly admitted and should not have been rejected by the Resolution Professional.

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Despite admitting CNH’s net claim, NCLAT underscored that the Resolution Plan approved for SREI provided Nil payout to operational creditors, apart from statutory government dues. The Tribunal observed that admission of CNH’s claim does not affect the plan or alter the distribution.

In other words, CNH succeeded in establishing the principle that set‑off is permissible in CIRP claims, but it did not gain any monetary recovery because the plan itself excluded operational creditors from distribution.

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