The National Company Law Appellate Tribunal held that a claim filed during liquidation must be dealt with as per the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016, and the NCLT cannot direct a Liquidator to make payment to any claimant directly.
Justice Ashok Bhushan and Arun Baroka said: “We are of the view that when stakeholder filed a claim in the CIRP and in the liquidation, the claim is entitled to be dealt with as per Section 53 of the IBC. The Adjudicating Authority could not have issued any direction to make any payment to any stakeholder, dehors, the distribution as contemplated by the IBC. We, thus, are of the view that direction of the Adjudicating Authority for payment of…