Liquidator Cannot Short-Circuit Jurisdiction": NCLAT Refuses to Adjudicate Disputed Contractual Dues Against UP Rajkiya Nirman Nigam [Read Order]

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, in Company Appeal (AT) (Insolvency) No. 1561 of 2023, upheld the NCLT's decision that the liquidator cannot invoke the NCLT's summary jurisdiction to recover a disputed contractual debt from Uttar Pradesh Rajkiya Nirman Nigam Limited (URNL). The NCLAT held that the Liquidator had attempted to "sidestep and short-circuit the jurisdiction of other authorities" for the enforcement of uncrystallized dues.

The appeal was filed by Pooja Bahry, the Liquidator of Dev Denso Power Ltd. The Corporate Debtor, which was sub-contracted by URNL for the construction of power sub-stations, was undergoing liquidation since September 6, 2021.

The Liquidator sought directions against URNL and Uttar Pradesh Power Transmission Corporation Limited (UPPTCL) to recover an outstanding receivable of ₹172.58 lakhs. The core argument according to theAppellant was that the outstanding amount reflected in the Corporate Debtor’s audited balance sheet, constituted a legally enforceable and admitted liability that automatically formed part of the liquidation estate. Therefore, the recovery fell within the broad powers of the NCLT under Section 60(5)(c) of the IBC.

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