Claiming Damages? Don't Go Under IBC, Says NCLT

• NCLT Imposes penalty on the Petitioner for attempting to initiate CIRP based on incorrect facts and false information
• Holds that a claim not adjudicated upon by a competent authority in law cannot be an "operational debt" under IBC.
• Claim related to non-payment of advance money is not covered under IBC.

Introduction

The National Company Law Tribunal, Mumbai ("NCLT") in a recent case in TATA Chemicals Limited v/s. Raj Process Equipment's and Systems Private Limited¹ dismissed a petition of Tata Chemicals ("Petitioner") filed under Section 9 of the Insolvency & Bankruptcy Code, 2016 ("IBC") and imposed costs of INR 10 lakhs (USD 14,000 approximately) upon the Petitioner, for its attempts to initiate a Corporate Insolvency Resolution Process ("CIRP") against the corporate debtor on ulterior motives.