Home Attorneys & Law ‘Quasi-judicial’ role of liquidators in treating disputed claims under the IBC

‘Quasi-judicial’ role of liquidators in treating disputed claims under the IBC

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The Insolvency and Bankruptcy Code, 2016 (“IBC”) is silent on the treatment of a disputed or contingent claim, which is pending adjudication before a judicial or quasi-judicial body, giving rise to a contentious issue. The decision of the Hon’ble Supreme Court in Committee of Creditors of Essar Steel Limited against Satish Kumar Gupta[1] Clarity brought to the picture vis-à-vis the status of the contingent/ disputed claims for the corporate insolvency resolution process (“CIRP”). The Hon’ble Supreme Court in Essar Steel (supra) The court upheld the resolution plan wherein an adjudication contingent claim was given a nominal value of INR 1. Subsequently, it became an accepted norm for Resolution Professionals (“RP”) to admit claims that are sub-judiceThe notional value is INR 1. Although this answer the question as to how undisputed claim must be treated, Essar The judgment leaves some issues open for interpretation. 

The blog aims to provide a perspective on one of the open issues. i.e.If a liquidator has recourse to the Essar To give a nominal value of 1 INR to claims that are disputed or contingent. Answering this question would require an introspection of the role ,…



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