NCLAT Rejects Duplicate Claim by noting that Appellant Cannot Assert Same Debt in Two Proceedings Without Invocation or Disclosure [Read Order]
The bench observed that permitting such a duplicated claim would seriously prejudice other stakeholders in Dream Procon’s CIRP, including over 500 homebuyers
![NCLAT Rejects Duplicate Claim by noting that Appellant Cannot Assert Same Debt in Two Proceedings Without Invocation or Disclosure [Read Order]](https://images.taxscan.in/h-upload/2025/07/14/2063800-nclat-nclat-rejects-duplicate-claim-duplicate-claim-duplicate-claim-by-noting-that-appellant-taxscan.webp "NCLAT Rejects Duplicate Claim by noting that Appellant Cannot Assert Same Debt in Two Proceedings Without Invocation or Disclosure [Read Order]")
The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) rejected the duplicate claim by noting that the appellant cannot assert the same debt in two proceedings without invocation or disclosure. In this case, the appeal was filed by Moneywise Financial Services Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016, National Company Law...
The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) rejected the duplicate claim by noting that the appellant cannot assert the same debt in two proceedings without invocation or disclosure.
In this case, the appeal was filed by Moneywise Financial Services Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016, National Company Law Tribunal, New Delhi Bench.
Coming to the facts of the case, the appellant is the Financial Creditor of the Corporate Debtor, M/s Dream Procon Pvt. Ltd., and granted a loan pf Rs. 5 crores to the latter for the construction of a real estate project. Indirapuram Habitat Centre Pvt. Ltd. (IHCPL), a group concern of the corporate debtor Dream Procon Pvt. Ltd., received a Rs. 10 crore loan from the appellant for the construction of a commercial project in Ghaziabad.
The Corporate Debtor agreed to be held accountable for IHCPL's debt obligations by signing a corporate guarantee in favour of the Appellant in order to ensure the loan's repayment. A Joint Declaration and Undertaking, signed by the Corporate Debtor and IHCPL, further formalised the guarantee by attesting to cross-collateralization and cross-guarantee agreements. Based on the corporate guarantee signed by the Corporate Debtor, the appellant filed a claim in Dream Procon Pvt. Ltd.'s CIRP after IHCPL defaulted and a CIRP was started against it.
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The Resolutional Professional rejected the Appellant’s claim by noting that the debt was not disbursed to the Corporate Debtor and hence did not qualify as “financial debt” under Section 5(8) of the IBC.
There were 3 main issues before the bench of consideration, and one of them was whether the Appellant’s claim is admissible in the CIRP of the Corporate Debtor considering the admitted claim for the same underlying debt of in the CIRP of IHCPL.
It was contended by the appellant that it was legally entitled to file claims in both CIRPs; that of the principal borrower (IHCPL) and the guarantor (Dream Procon Pvt. Ltd.). The appellant submitted that by virtue of Section 128 of the Indian Contract Act, 1872 he liability of a guarantor is co-extensive with that of the principal debtor, unless otherwise agreed, and that a creditor can pursue either party or both simultaneously.
The Respondent argues that the Appellant's claim of Rs. 14.59 crores was previously submitted in the CIRP of IHCPL, the major borrower, and accepted. Filing an identical claim against the guarantor, Dream Procon, without disclosing the previous claim or providing an adjustment mechanism is considered "double dipping" and violates the IBC's spirit and structure.
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The bench noted that the Appellant had already submitted and secured admission of the ₹14.59 crore claim in the CIRP of IHCPL and that the Appellant filed the same claim in the CIRP of Dream Procon without disclosing that the earlier claim had been admitted.
The tribunal, by going through the Report of the Insolvency Law Committee (2020) noted that simultaneous claims are permitted only to the extent that double recovery is avoided.
The bench observed that permitting such a duplicated claim would seriously prejudice other stakeholders in Dream Procon’s CIRP, including over 500 homebuyers.
It was further observed by the bench that “the alleged guarantee was never invoked prior to the Insolvency Commencement Date, and the same claim had already been admitted in the CIRP of the principal borrower, IHCPL. Filing the identical claim in the CIRP of Dream Procon constitutes impermissible duplication.”
The NCLAT, comprising Justice Rajesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member), and Indevar Pandey (Technical Member), dismissed the appeal.
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