NCLT Mumbai Rules Unverified Construction Dues Cannot Be Rejected Without Evidence

The National Company Law Tribunal (NCLT) Mumbai ruled that resolution professionals cannot reject unverified construction dues without examining supporting evidence. The tribunal examined the process of claim admission during corporate insolvency proceedings and emphasized that every financial or operational liability submitted by creditors requires careful scrutiny rather than summary dismissal. The decision reinforces the statutory duty of insolvency administrators to act with fairness and transparency when compiling the list of creditors.

In corporate insolvency resolution processes, verifying creditor claims is a foundational step that determines voting shares and eventual payout distributions. When construction contractors or operational creditors submit dues, administrators must seek necessary clarifications and documents instead of discarding claims due to initial verification gaps. Arbitrary rejections undermine the integrity of the resolution framework and disadvantage genuine claimants who built the corporate assets. Insolvency professionals and corporate debtors must establish robust internal review mechanisms for evaluating contractor claims with proper documentation.

Creditors should maintain comprehensive records, including work orders, running account bills, and communication logs, to substantiate their dues during corporate restructuring. The bottom line is that documentary evidence must dictate claim admissions, protecting creditors from unjustified exclusions by insolvency administrators.