AVJ Heightss Apartment Owners Association Vs IIFL Finance Limited & Anr. (Supreme Court of India)
The matter arises from two appeals before the Supreme Court against a common judgment of the National Company Law Appellate Tribunal (NCLAT), which had upheld an order of the National Company Law Tribunal (NCLT) directing that the claim of a financial creditor be considered by the Resolution Professional (RP) in the corporate insolvency resolution process (CIRP) of the corporate debtor. One appeal was filed by an apartment owners’ association and the other by a suspended director of the corporate debtor. The dispute centres around the validity and admissibility of a financial claim that was initially rejected by the RP due to inability to verify it from the records of the corporate debtor but was later allowed by the NCLT and affirmed by the NCLAT.
During the hearing, the appellants contended that the claim was sham and bogus, raising multiple objections. A significant development placed before the Court was an arbitral award dated 03.07.2024 concerning the same claim of ₹85 crore with interest. The Court noted key findings from the arbitral tribunal, which highlighted discrepancies in the disbursement of the loan and inconsistencies in supporting documents. The award recorded that the loan was allegedly disbursed across different accounts instead of the designated account, and that several documents relied upon by the claimant were tainted. Issues identified included irregularities in execution of documents, inconsistencies in dates, and questions regarding authenticity of signatures and stamp papers. The tribunal also noted contradictions in witness testimony and circumstances suggesting that certain documents may have been created or backdated.
