Kolkata Municipal Corporation Recognised as Secured Creditor Under IBC in liquidation case: NCLAT

The National Company Law Appellate Tribunal held that the Kolkata Municipal Corporation (KMC) qualifies as a secured creditor in the liquidation proceedings of Talwalkars Better Value Fitness Ltd.

KMC raised property tax assessments on the corporate debtor’s premises within its municipal limits, with ₹30.28 lakh remaining unpaid despite partial payment in 2018, leading to a distress warrant.

The NCLT had earlier refused to recognise KMC as a secured creditor, prompting the appeal. The NCLAT held that KMC’s claim could not be treated as “Government dues” but constituted a secured operational debt under the Insolvency and Bankruptcy Code, 2016.

[Kolkata Municipal Corporation v Liquidator of Talwalkars Fitness]