Three-Year Suspension of IP for Rejecting Admitted Claim and Defying NCLT & NCLAT Directions in CIRP Under IBC
Overview of the Disciplinary Proceeding
The Insolvency and Bankruptcy Board of India's Disciplinary Committee (DC) has passed a significant order disposing of a Show Cause Notice issued against an Insolvency Professional registered with the IBBI. The proceedings arose from serious allegations concerning the improper rejection of an operational creditor's claim that had already been formally admitted, coupled with repeated non-compliance with binding directions issued by the Adjudicating Authority and the Hon'ble National Company Law Appellate Tribunal during a Corporate Insolvency Resolution Process initiated under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Order Reference: IBBI/DC/330/2026 | Date: 08 July 2026
The Insolvency Professional in question is Mr. Manish Motilal Jaju, holding Registration No. IBBI/IPA-001/IP-P00034/2016-17/10087, and enrolled as a Professional Member of the Indian Institute of Insolvency Professionals of ICAI. After exhaustive examination of the Show Cause Notice, written responses, oral submissions, judicial orders across multiple forums, and the complete case record, the DC concluded that Mr. Manish Motilal Jaju had committed grave professional misconduct warranting suspension of his registration for a period of three years.
Background and Initiation of CIRP
M/s CAN Enterprises Private Limited (hereinafter referred to as the Corporate Debtor or CD) was admitted into the Corporate Insolvency Resolution Process by the National Company Law Tribunal, Mumbai Bench (the Adjudicating Authority or AA) vide order dated 27.01.2020. The admission was based on an application filed by M/s Malharshanti Enterprises Private Limited acting as the Operational Creditor (OC) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC/Code).
Mr. Jitendrakumar Rambaran Yadav was initially appointed as the Interim Resolution Professional (IRP). He conducted the first CoC meeting on 18.03.2020, during which he formally admitted the claim of the OC for a sum of Rs. 1,95,01,079/- and constituted the Committee of Creditors with M/s Paton Construction Private Limited as the sole unsecured financial creditor.
Subsequently, the AA vide order dated 09.06.2020 replaced the IRP and appointed Mr. Manish Motilal Jaju as the Resolution Professional (RP) upon an application filed by Paton Construction Private Limited.
The Claim Table as Admitted by the IRP
The following claims were admitted by the erstwhile IRP at the time of CoC constitution:
| Sr. No. | Creditor | Type | Claim Submitted (Rs.) | Claim Admitted (Rs.) |
|---|---|---|---|---|
| 1 | Paton Construction Private Limited | Financial Creditor (Unrelated) | 1,05,877 | 1,05,877 |
| 2 | Naresh Sevantilal Shah | Financial Creditor (Related) | 1,77,24,370 | 1,77,24,370 |
| 3 | M/s Malharshanti Enterprises | Operational Creditor | 1,95,01,079 | 1,95,01,079 |
Chronology of Key Events
The DC recorded the following sequence of material events:
| Date | Event |
|---|---|
| 02.12.2017 | First Demand Notice issued by OC; served on CD on 04.12.2017 |
| 28.12.2017 | Application (IB) No. 1823 (MB)/2017 filed by OC against CD |
| 13.03.2018 | OC permitted to withdraw petition |
| 05.10.2018 | C.P. (IB) 3753(MB)/C-IV/2018 filed by OC under Section 9 |
| 20.08.2019 | Inter-Corporate Loan Deposit (ICD)/Loan Agreement executed between Paton Construction Pvt. Ltd. and CD for Rs. 1 Lakh |
| 06.09.2019 | Loan amount of Rs. 1 Lakh credited to CD account — the very next day after oral arguments concluded before NCLT, Mumbai |
| 27.01.2020 | CIRP admission order passed by AA |
| 18.03.2020 | First CoC meeting; IRP admits OC's claim |
| 09.06.2020 | Mr. Manish Motilal Jaju appointed as RP |
| 02.12.2020 | RP rejects OC's claim via email citing non-submission of documents |
| 11.01.2021 | OC files application before AA challenging claim rejection |
| 19.01.2021 | NCLAT upholds CIRP admission order; dismisses suspended management's appeal |
| 10.03.2021 | Hon'ble Supreme Court dismisses suspended management's appeal as withdrawn |
| 30.08.2021 | AA directs OC to furnish documents; directs RP to verify claim by 10.09.2021; orders forensic audit |
| 10.09.2021 | RP again rejects OC's claim |
| 04.03.2022 | Forensic audit report submitted |
| 16.02.2023 | AA sets aside claim rejection; directs RP to admit OC's claim |
| 01.04.2023 | Mr. Manish Motilal Jaju files appeal before NCLAT |
| 17.09.2024 | NCLAT dismisses RP's appeal; imposes cost of Rs. 10 Lakhs |
| 18.10.2024 | Mr. Manish Motilal Jaju attempts appeal before Hon'ble Supreme Court — not registered |
| 02.01.2025 | Hon'ble Supreme Court dismisses suspended management's appeal |
| 06.01.2025 | RP finally admits OC's claim for Rs. 1,95,01,079/- |
| 12.09.2025 | Cost of Rs. 10 Lakhs deposited by Mr. Manish Motilal Jaju |
| 02.12.2025 | Show Cause Notice issued by IBBI |
The Central Allegation: Wrongful Rejection of an Admitted Claim
First Rejection of OC's Claim
Upon assuming charge as RP, Mr. Manish Motilal Jaju commenced a fresh examination of the OC's claim — a claim that had already undergone verification and formal admission by the IRP, and which had served as the very foundation for the CIRP admission by the AA. Citing non-submission of audited financial statements, proof of tax payments, and contractually mandated certifications, Mr. Manish Motilal Jaju communicated rejection of the OC's claim vide email dated 02.12.2020.
This occurred even as the suspended management of the CD had independently challenged the CIRP admission order before the NCLAT. That appeal was dismissed by the NCLAT vide order dated 19.01.2021, which conclusively held that there was no pre-existing dispute regarding the OC's claim at the time the first demand notice was issued. The Hon'ble Supreme Court subsequently dismissed the further appeal by the suspended management as withdrawn on 10.03.2021, thereby bringing complete finality to the question of debt and default.