Tribunal finds no substantial evidence to support claims of forged documents and malicious intent in CIRP initiation.
In a significant ruling on December 16, 2025, the Chennai Bench of the National Company Law Tribunal (NCLT) dismissed applications filed by Dr. Ravi Shankar Vedam alleging fraudulent initiation of insolvency proceedings against Tiffins Barytes Asbestos and Paints Limited (TBAPL). The Tribunal found that the claims of forgery and malicious intent lacked credible and corroborative evidence, which is essential to substantiate such serious allegations.
The case revolved around the alleged fabrication of documents and false evidence presented during the Corporate Insolvency Resolution Process (CIRP) initiated under Section 7 of the Insolvency and Bankruptcy Code, 2016, by M. Poobalan, the respondent. Dr. Vedam, the son of late Shri S. Vedam, founder director of TBAPL, claimed that the proceedings were maliciously initiated using a fabricated Memorandum of Understanding (MoU), which led to the displacement of his family from the company's management.
However, the Tribunal, presided by Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam, emphasized that the burden of proof for such allegations lies on the objecting party, in this case, Dr. Vedam. The Tribunal noted that mere allegations without substantial proof are insufficient to invoke penal provisions under Bharatiya Nyaya Sanhita, 2023 (BNS) and Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
In its detailed order, the Tribunal referred to prior judgments from the NCLAT and Supreme Court, which had upheld the initiation and resolution plan of the CIRP despite similar allegations. The Tribunal reiterated that for proceedings under Section 65 of IBC, 2016, which deals with fraudulent or malicious initiation, explicit documentary evidence is required to prove such intent.
The Tribunal also addressed the forensic examination of the MoU, stating that the report did not conclusively prove forgery or fabrication of signatures, as claimed by Dr. Vedam. Given the lack of compelling evidence, the Tribunal dismissed all three applications filed by Dr. Vedam, affirming the finality of the resolution proceedings.
This ruling underscores the necessity for credible evidence when alleging fraud in insolvency proceedings, which are inherently summary in nature, as reiterated by the NCLT and NCLAT in related cases.
Bottom Line:
Allegations of fraud and fabrication of evidence in insolvency proceedings must be substantiated with credible and corroborative evidence; mere allegations without proof are insufficient to invoke penal provisions under Bharatiya Nyaya Sanhita, 2023 (BNS) and Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS).
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 7, 65; Bharatiya Nyaya Sanhita, 2023 Sections 227, 228, 229; Bharatiya Nagarik Suraksha Sanhita, 2023 Sections 215, 379.
Dr. Ravi Shankar Vedam v. M. Poobalan, (NCLT)(Chennai Bench) : Law Finder Doc Id # 2825983
