Uninvoked/Unmatured Claims Can Be Treated As Valid Debt Under Insolvency Code

• A claim submitted by a creditor during the insolvency resolution process can be disputed, undisputed, matured or unmatured
• An uninvoked guarantee although an unmatured claim can be included in the total liabilities of the corporate debtor
• There is no nexus between submission of a claim and default of a debt
• Quantum of a claim should be as on the insolvency commencement date

INTRODUCTION:

The National Company Law Tribunal, Principal Bench ("NCLT") in the matter of Axis Bank Limited v Edu Smart Services Private Limited, had rejected a plea from Axis Bank in respect of its claim under a corporate guarantee in the insolvency resolution process of Edu Smart Services Private Limited ("Edu Smart"). Axis Bank had invoked its claim around two weeks after the initiation of the resolution process but the NCLT held that the corporate guarantee could not be treated as a debt since it had not been invoked before the commencement of the process for