FLSmidth Private Limited Vs Lanco Infratech Ltd. (NCLAT Chennai)
In a recent decision, the National Company Law Appellate Tribunal (NCLAT) Chennai addressed the authority of a liquidator in insolvency cases. The case involved FLSmidth Pvt Ltd’s dispute with Lanco Infratech Ltd regarding claims and counterclaims, highlighting the limitations of a liquidator’s powers.
FLSmidth Pvt Ltd initiated insolvency proceedings against Lanco Infratech Ltd under Section 7 of the Insolvency and Bankruptcy Code, 2016. Subsequently, the company’s resolution professional (RP) was appointed, followed by the initiation of liquidation proceedings. FLSmidth Pvt Ltd, an engineering company, had entered into a contract with Lanco Infratech Ltd for the supply of various systems. However, disputes arose regarding non-performance by Lanco Infratech Ltd, leading to the cancellation of the contract.
FLSmidth Pvt Ltd filed claims totaling Rs. 71.09 crore, which were partially admitted by the RP. However, the liquidator later rejected these claims, citing disputes and counterclaims between the parties. FLSmidth Pvt Ltd challenged this rejection, arguing that the liquidator lacked the authority to adjudicate claims and counterclaims.
The Respondent, acting as the liquidator, contended that the rejection was in accordance with the Insolvency and Bankruptcy Code and related regulations. The liquidator maintained that her role was to verify claims based on available information and that disputes requiring adjudication by a civil court or arbitrator fell outside her purview.
