NCLAT Rejects Union of India's Appeal Against Rolta India Resolution Plan: Lessons on Timely Challenge of Claim Rejections Under IBC
Background and Overview
The Principal Bench of the National Company Law Appellate Tribunal (NCLAT), New Delhi, has dismissed an appeal preferred by the Union of India through the Department of Telecommunications (DoT) against the order of the National Company Law Tribunal (NCLT), Mumbai Bench-I, which had approved the resolution plan of Rolta India Limited under Sections 30(6) and 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC). The ruling reinforces a well-established principle in insolvency law: a creditor who fails to challenge the rejection or categorisation of its claim at the appropriate stage before the Adjudicating Authority cannot seek to revisit such issues after the resolution plan has been approved and fully implemented.
This judgment has significant implications for government departments and statutory authorities who hold claims against corporate debtors undergoing the Corporate Insolvency Resolution Process (CIRP) — particularly when those claims are treated as contingent or not acceptable by the Resolution Professional.
Parties and Their Relationship with the Corporate Debtor
The Union of India, acting through DoT, was an Operational Creditor as well as the Licensor of Rolta India Limited. Two ISP licence agreements governed this relationship:
- ISP licence agreement No. 820-4/98/LR dated 18.11.1998, granted for establishing and operating internet services in the Mumbai service area for a period of five years.
- A fresh ISP licence agreement No. 820-04-02-LR dated 30.04.2002, executed subsequently.
Under the terms of these licence agreements, Rolta India Limited was contractually obligated to pay licence fees calculated on the basis of Adjusted Gross Revenue (AGR). The corporate debtor defaulted on these payment obligations, leading DoT to issue demand notices. These demand notices were challenged by Rolta India Limited before the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) in Telecom Petition No. 146 of 2018.
The TDSAT, vide its interim order dated 09.08.2018, directed that "the impugned demand notices shall remain stayed till the next date."
Initiation of CIRP and Filing of DoT's Claim
The CIRP against Rolta India Limited was admitted by the NCLT, Mumbai Bench-I in C.P. (IB) No. 530 of 2020 vide order dated 19.01.2023.
Following commencement of the CIRP, DoT lodged its claim in Form-B on 31.08.2023, asserting dues of Rs. 469.09 Crore (described as provisional and subject to upward revision on account of interest and penalty) towards unpaid licence fees for Financial Years 2005-06 and 2006-07.
The Resolution Professional, however, communicated via email on 25.09.2023 that DoT's entire claim of Rs. 469.09 Crore had been categorised as "not acceptable but contingent". The stated basis for this categorisation was the interim stay granted by the TDSAT on 09.08.2018, which had stayed recovery of the demand notices — thereby treating those claims as disputed and not crystallised.
DoT's Contentions Before the NCLAT
DoT raised several grievances before the NCLAT: