Recent NCLT Rulings Every CS Should Know in 2025

Imagine losing an insolvency case just because an interest rate wasn’t clearly agreed upon, or facing multiple investigations because of one wrong boardroom decision.

This isn’t just theory—it’s what’s actually happening in 2025.

The National Company Law Tribunal (NCLT) and its Appellate Tribunal (NCLAT) have passed several important judgments that are changing how Indian companies operate. These decisions are affecting everything from how companies handle unpaid debts and mergers to how they treat minority shareholders and follow legal processes. In this article, we’ll break down the recent important NCLT rulings.

Complete Ready to Use PDFs of 200+ Agreements Click here

I. INSOLVENCY & BANKRUPTCY CODE (IBC): KEY JUDICIAL DEVELOPMENTS

1. Interest Claims: Not Always Operational Debt

Ajay Kumar Gupta v. LC Packers Pvt. Ltd. (NCLT, Jan 2, 2025)

The NCLT held that interest on delayed payments mentioned merely in invoices, without explicit agreement, is not sufficient to meet the insolvency threshold under Section 9 of the IBC. It emphasized the need for clear acceptance or contractual agreement, citing the "doctrine of eclipse" to prioritize newer precedent over older judgments.

• Implication for CSs: Review contract templates to ensure enforceability of interest clauses. Advise clients to avoid relying solely on invoice stipulations.

2. IBC Is Not a Debt Collection Tool

SNJ Synthetics Ltd. v. PepsiCo India Holdings (NCLAT, May 7, 2025)

The NCLAT dismissed an insolvency application based solely on a disputed interest claim, ruling that once the principal is repaid, the petition loses merit. It reaffirmed that the IBC isn’t a forum for disputed interest recovery.

Complete Blueprint for Preparing Project Reports, Click Here

• CS Takeaway: Discourage filing IBC cases for contested or minor claims. Suggest civil suits or MSME remedies instead.

3. Personal Guarantors: Moratorium Doesn't Shield Regulatory Penalties

Saranga Anilkumar Aggarwal v. Bhavesh Sheth (Supreme Court, Mar 4, 2025)

The Supreme Court clarified that interim moratoriums under Section 96 don’t bar regulatory or consumer protection penalties. These liabilities are classified as “excluded debts” under IBC.

• Advice for CSs: Personal guarantors remain vulnerable to regulatory actions despite insolvency proceedings. Strong compliance mechanisms are critical.

4. Strict Timelines in Liquidation

Rajabhau Shinde v. S.M. Electric Works (NCLAT, Mar 18, 2025)

The NCLAT emphasized adherence to the 90-day payment rule for successful bidders in liquidation. Liquidators cannot extend timelines arbitrarily.

• Actionable for CSs: Guide stakeholders on non-negotiable deadlines in liquidation, and ensure compliance with all procedural norms.

5. Supreme Court Validates CoC's Commercial Wisdom

Piramal-DHFL Resolution Plan (SC, Apr 1, 2025)

The Supreme Court upheld the CoC's discretion in assigning nominal value to recoveries from fraudulent transactions (under Section 66), reinforcing the sanctity of commercial wisdom.

• CS Perspective: Ensure resolution plans transparently document valuation logic and follow regulatory mandates. Protect decisions through thorough CoC documentation.

II. MERGERS & CORPORATE RESTRUCTURING

1. Air India–Vistara Merger Approved (NCLT Chandigarh, Jun 6, 2024)

This merger created India’s largest international airline. The NCLT’s approval underscores its critical gatekeeping role for mega M&As.

• CSs' Role: Coordinate cross-regulatory approvals (CCI, DGCA), ensure stakeholder consensus, and prepare meticulous legal documentation.

2. Siemens Demerger (NCLT Mumbai, Mar 25, 2025)

Siemens Limited spun off its energy business into a separate listed entity. The Tribunal approved a 1:1 share allotment and reaffirmed the importance of business focus and shareholder value creation.

• Implication: CSs must shepherd complex demergers from valuation to regulatory filings.

3. Fast-Track Mergers: Eased, Yet Challenging

MCA’s 2025 draft rules propose expanding fast-track mergers under Section 233, including unlisted subsidiaries. However, securing 90% shareholder and creditor consent remains a hurdle.

• CS Guidance: Assess feasibility early. Anticipate potential referrals to NCLT even in fast-track cases.

III. SHAREHOLDER RIGHTS & GOVERNANCE

1. Escientia Life Sciences Case: A Win for Minority Shareholders

The NCLT Hyderabad condemned oppressive conduct by a majority shareholder, ordered a structured buyout in favor of the minority, and suspended the board.

• CS Insight: Reinforce governance protocols, avoid conflict of interest, and preserve minority rights through adherence to Articles of Association.

2. Separating Family Disputes from Corporate Battles

Urvashi Bharat Khatre Case (NCLT Mumbai, Mar 12, 2024): The Tribunal dismissed the case as a family dispute disguised as corporate oppression.

Brij Mohan Khanna v. Khanna Paper Mills: Status quo granted in family dispute masquerading as oppression.

• Best Practice: Advise on formalizing family governance separately from company governance. Promote succession planning.

IV. SELECTIVE CAPITAL REDUCTION: LEGAL & STRATEGIC CLARITY

Bharti Telecom Ltd. Case (NCLAT, Apr 11, 2025)

The NCLAT upheld BTL's selective reduction of capital to exit 1.09% of minority shareholders, validating the application of “discount for lack of marketability” (DLOM) and the legality of Section 66 for selective exits.

• CS Toolkit: Use selective capital reduction for strategic exits. Ensure valuation fairness, robust disclosures, and compliance with tax and SEBI norms.

V. PROCEDURAL POWERS & COMPLIANCE DIRECTIVES

1. NCLT Can Forward Orders to Authorities

Even if a case is dismissed, the NCLT can forward its order to authorities like MCA, SFIO, or Income Tax, based on suspected fraud.

• CS Action: Prepare for multi-agency scrutiny; implement strong internal controls to mitigate reputational and legal risks.

2. Procedural Discipline Reinforced

Amendments to NCLT orders after an appeal violate Section 420(2). Proper service of notices and documentation is essential.

• Tip: Maintain impeccable procedural hygiene in filings, hearing notices, and appeals.

Strategic Checklist for Company Secretaries

• Review all debt contracts for explicit interest terms.
• Document CoC decisions rigorously for IBC defense.
• Avoid IBC for minor interest-based recoveries.
• Use family trusts, not NCLT, for ownership disputes.
• Follow strict liquidation and merger timelines.
• Engage early with stakeholders for capital reductions.
• Coordinate across SEBI, MCA, DGCA, CCI during mergers.

Step by Step Guide of Preparing Company Balance Sheet and Profit & Loss Account Click Here

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates