A ₹43.4 crore claim was filed in the wrong form. The court said: check it anyway.

The Authority filed a ₹43.4 crore claim. The RP said: wrong form. The plan gave them ₹1.34 crore. The Supreme Court just changed the rules.

On a February morning in 2024, a bench of the Supreme Court sat down to decide whether a single piece of paper—a claim form filled in the wrong column—could cost a government authority forty-two crore rupees. The case turned on a question that sounds bureaucratic but carries real money: when a creditor files a claim in the wrong form, does the Resolution Professional have to check it anyway?

When the lease payments stopped

The story begins with a plot of land in Greater Noida. The Greater Noida Industrial Development Authority—a statutory body created under the UP Industrial Area Development Act, 1976—had leased a plot to JNC Construction for a residential project. The lease ran for 90 years. JNC was supposed to pay premium instalments over time.

It didn't.

By 2019, JNC had defaulted. Creditors pushed the company into insolvency. The National Company Law Tribunal (NCLT) admitted the case and initiated the Corporate Insolvency Resolution Process (CIRP)—the formal process where a company's debts are restructured or the company is sold off.

The Greater Noida Authority did what any creditor would do. It filed a claim. ₹43.4 crore. It submitted this claim as a financial creditor—someone who has lent money to the company. But the Resolution Professional (RP), the person appointed to run the insolvency process, looked at the claim and decided otherwise.

The form that changed everything

The RP classified the Authority as an operational creditor—a supplier of goods or services, not a lender. Under the Insolvency and Bankruptcy Code (IBC), 2016, this distinction matters. Financial creditors sit on the Committee of Creditors (CoC) and vote on the resolution plan. Operational creditors get paid only what the plan decides, often far less.

The RP asked the Authority to resubmit its claim using Form B, the form meant for operational creditors. The Authority did not resubmit.

Meanwhile, the CoC approved a resolution plan. The plan offered the Authority just ₹1.34 crore. Worse, the plan stated—incorrectly—that the Authority had not submitted any claim at all.

The Authority went back to the NCLT. It filed two applications: one to recall the order approving the plan, and another to challenge the RP's classification. Both were dismissed. The National Company Law Appellate Tribunal (NCLAT) dismissed the appeal too.

The Authority ended up in the Supreme Court.

What the law actually says about forms

The core of the dispute was deceptively simple. The IBC, read with the CIRP Regulations, 2016, prescribes specific forms for claims. Form A for financial creditors. Form B for operational creditors. The Authority had filed in Form A when the RP thought it should have filed in Form B.

The RP argued that the form was mandatory. File it wrong, and the claim doesn't exist. The Authority argued that the form was just a procedural requirement—what mattered was the proof behind the claim.

The Supreme Court had to decide which side was right.

Why the form is not the final word

Justice Manoj Misra, writing for the bench, examined the language of the regulations. Regulation 7 of the CIRP Regulations deals with claims by financial creditors. Regulation 8 deals with claims by operational creditors. Both regulations say the claim "shall be submitted in" the specified form.

But the court looked deeper. Regulation 13 says the RP must verify every claim "within seven days from the receipt of the claim." The verification is about the substance—whether the claim is supported by proof—not about the form in which it arrived.

The court held that the forms are directory, not mandatory. A directory requirement means you should follow it, but failing to do so doesn't make the action invalid. A mandatory requirement means the action is void if you don't follow it exactly.

Here, the court said, the purpose of the forms is to help the RP organise claims, not to create a trap for creditors who pick the wrong box. What matters is whether the claim is verifiable from the proof submitted or from the company's own records.

The RP's duty to look beyond the paper

The court went further. It said the RP has a statutory obligation to collate data from all claims made before it, and also from information gathered from the corporate debtor's (the company in insolvency) own records. This means the RP cannot simply reject a claim because it arrived in the wrong form. The RP must check whether the claim exists in substance.

In this case, the Authority had submitted proof of its claim—the lease agreement, the default notices, the calculations. The RP had that information. Yet the plan was approved as if the Authority had never filed anything.

The court also addressed a second issue: whether the NCLT could recall its own order approving the resolution plan. The NCLT had dismissed the Authority's recall application, saying it had no power to revisit its own approval order under Section 31(1) of the IBC (the section that allows the NCLT to formally approve a resolution plan).

The Supreme Court disagreed. It held that the NCLT, exercising its powers under Section 60(5) of the IBC (the general jurisdiction clause) read with Rule 11 of the NCLT Rules, 2016 (the inherent powers rule), can recall an approval order if the order was passed in violation of natural justice—meaning one side was not heard—or based on materially incorrect information.

Here, the plan stated the Authority had not submitted any claim. That was factually wrong. The order approving the plan was based on that incorrect statement. The NCLT could have recalled it.

When commercial wisdom meets legal compliance

The court also touched on a delicate balance in insolvency law. The commercial wisdom of the Committee of Creditors is generally not reviewable by courts. The CoC decides what the resolution plan should contain, and courts rarely second-guess that decision.

But the court clarified that this does not mean the CoC has unchecked power. The NCLT, when asked to approve a plan under Section 31(1), must check whether the plan complies with Section 30(2) of the IBC (the requirements for a valid resolution plan) read with Regulations 37 and 38 of the CIRP Regulations (which specify what the plan must contain). If the plan fails those requirements, the NCLT can send it back to the CoC for re-submission.

In this case, the plan had not adequately addressed the Authority's statutory charge over the land—a legal right that the Authority held under the UP Industrial Area Development Act. The plan also did not properly account for the Authority's ownership rights over the land, since the lease was for 90 years and the land itself belonged to the Authority.

The court found that the plan, as approved, did not comply with Section 30(2) read with Regulations 37 and 38.

THE PLAY: If you file a claim in the wrong form, the Resolution Professional must still verify it—the form is directory, not mandatory, and the RP's duty is to check the substance, not the paperwork.

What this means for every creditor

For practitioners, the judgment offers two clear lessons. First, never assume a claim is dead just because it was filed in the wrong form. The RP must consider it if the proof is there. Second, if a resolution plan is approved based on incorrect information—such as a statement that no claim was filed—the NCLT has the power to recall that order.

The case also signals that the Supreme Court is watching how Resolution Professionals treat statutory authorities. A government body that owns land and leases it out is not just another creditor. Its rights over the land—statutory charges, ownership interests—must be addressed in the resolution plan, not brushed aside.

The form was wrong. The claim was real. The court said: check it anyway.