NCLT Chandigarh Upholds Rejection Of ARCIL's ₹3,482 Crore Claim Against JCT Limited As Time-Barred

The National Company Law Tribunal (NCLT) in Chandigarh has recently refused to admit Asset Reconstruction Company (India) Limited's claim of ₹3,482 crore in the insolvency process of JCT Limited.

Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal ruled the debt was time‑barred.

“The claim, even if computed from the original invocation in January 2002 or the subsequent default in April 2011, is barred by limitation,” the bench said.

ARCIL, acting as trustee of Arcil‑JCT III Trust, had taken over the debt from IFCI Limited in 2015. The debt came from corporate guarantees JCT Limited issued in the 1990s to back loans given to its subsidiary, JCT Electronics.

IFCI invoked those guarantees in 2002 after defaults mounted and later pursued recovery before the debts recovery tribunal.

When insolvency proceedings against JCT Limited began in October 2024, ARCIL filed its claim in January 2025. The interim resolution professional admitted only ₹56.68 crore provisionally, representing the guaranteed principal. The rest, including interest, penalties and damages, was left pending. By January 2026, the resolution professional rejected the entire claim, leading ARCIL to approach the tribunal.

ARCIL argued the professional had gone beyond his role by ruling on limitation and enforceability, matters it said belonged to the tribunal. It also claimed that once its claim was admitted and used to form the committee of creditors, the professional had no authority to reverse it. The company pointed to the guarantees as unconditional and continuing and maintained that all key documents were already on record.

The resolution professional countered that his job was not to rubber stamp claims. He said the limitation began with IFCI's demand notice in January 2002 and expired three years later. Even if defaults under the rehabilitation scheme were considered, the window closed by April 2014. The committee of creditors supported him, warning that admitting ARCIL's claim at the final stage would derail the resolution process.

The bench sided with them. It stressed that verifying claims is not a passive exercise. “The RP is required to satisfy himself that the claimant has demonstrated entitlement as a creditor, that the documents furnished establish a prima facie debt, and that the claim is supported by an adequate documentary record,” the order said.

On limitation, the court observed that notices under SARFAESI, pending recovery suits, or pandemic‑related exclusions did not extend the clock.

Balance sheet entries cited by ARCIL were also brushed aside, as they carried board‑approved caveats disputing liability.

“An acknowledgment of the existence of a dispute, accompanied by a denial of the legal sustainability of the claim, is not an acknowledgment of the liability itself,” the bench noted.