Authority: National Company Law Tribunal (NCLT), Jaipur Bench, Member (Judicial) Praveen Gupta

Order Date: 09.06.2026

Case Overview

This order addresses IA No.110/JPR/2019 filed by Genus Power Infrastructures Limited (Applicant) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, seeking directions to the Resolution Professional (RP) to verify and admit its claim as a Financial Creditor of Jaipur Metals & Electricals Limited (Corporate Debtor). The Corporate Debtor was under Corporate Insolvency Resolution Process (CIRP) initiated by Alchemist Asset Reconstruction Company Limited (Financial Creditor) via CP (IB) No.54/2018, admitted on 13.04.2018.

Genus Power had submitted a claim of Rs 14,20,28,815 (including interest) on 05.02.2019, based on payments made under Memoranda of Understanding (MoUs) dated 07.11.2008 with the Government of Rajasthan, JMEL Employees Cooperative Credit & Thrift Society Ltd, and Jaipur Metals & Electricals Mazdoor Sangh. These MoUs were part of a revival plan for JMEL, which was declared sick under BIFR in 1999 and recommended for winding up in 2002. Genus was the successful bidder in an RFP floated by the Government of Rajasthan for revival, with a bid amount of Rs 19.42 crores for acquiring shares.

Under the MoUs, Genus paid Rs 7,69,81,028 towards workers' dues, statutory dues, and government dues, broken down as: Rs 6,39,29,525 for salary/wages, Rs 12,71,955 for Provident Fund, Rs 16,69,534 to Thrift Society, and Rs 1,00,90,014 to Government of Rajasthan. However, the revival scheme was never approved, and the MoUs expired without full performance.

Previously, Genus had sought impleadment in winding up proceedings before the Rajasthan High Court (Company Petition No.19/2009) but was denied creditor status via orders dated 13.12.2010, 02.04.2012, and 30.04.2013. The Supreme Court, in SLP (C) Nos.34900-34901/2013 order dated 09.11.2016, directed that if JMEL is wound up, Genus's payments be adjusted from proceeds with 9% interest, but did not grant creditor status. Subsequent clarification requests were dismissed on 31.03.2017.

The RP rejected Genus's claim on 05.03.2019, stating that payments were not debts owed by JMEL, and Genus was not a creditor as per court orders. Genus contended that payments constituted financial debt under Section 5(8)(f) of IBC as they had the commercial effect of borrowing for revival.

The NCLT Jaipur Bench had differing opinions from Member (Judicial) and Member (Technical) on 10.03.2026, leading to this reference under Section 419(5) of Companies Act, 2013. The point of difference was whether the payments qualify as financial debt.

Final Outcome

The NCLT, after hearing parties and examining records, concluded that the payments made under the MoUs do not constitute "financial debt" under Section 5(8) of IBC. The payments were part of a conditional revival arrangement, not a borrowing transaction, and JMEL did not owe any debt to Genus. The RP's rejection of the claim is upheld, and the application is dismissed. Genus may have other remedies under law, but not as a financial creditor in CIRP.

Topics: Insolvency Proceedings, Financial Debt Definition