The New Delhi bench of National Company LawAppellate Tribunal ( NCLAT ) in its recent ruling has held that CIRP cannot be withdrawn without an application filed by an applicant who initiates section 7 application under the InsolvencyBankruptcy code ( IBC ), 2016.

After referring to the Supreme Court judgment in SBI vs. Company Appeal Consortium of Murari Lal Jalan & Florian Fritsch (2024), it observed that where there exists extraordinary circumstances warranting the exercise of such powers in order to ensure that the very salutary purpose of the Code, is not frustrated, then the Court will be well within its prerogative to exercise them to secure the object of the IBC.

The two member bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) found that , in which averments and pleadings have been made within the meaning of Section 65 of the IBC, still pending consideration before the Adjudicating Authority and while hearing the said Application, the Adjudicating Authority directed for stay of voting on the Resolution Plan.

NCLAT sets aside Admission of S.7 Application upon Finding Transaction was in Nature of 'Operational Debt'

Varun Gupta vs ISINOX Pvt. Ltd. CITATION: 2025 TAXSCAN (NCLAT) 102

The NCLT ruled that the limitation period, calculated as three years from the default date, expired on September 6, 2022. While the Supreme Court had excluded the period from March 15, 2020, to February 28, 2022, due to COVID-19 disruptions, the NCLT determined that this extension did not save the appellant's petition.

The two member bench comprising Justice Sharad Kumar Sharma ( Judicial Member ) and Jatindranath Swain ( Technical Member ) observed that the appellant’s plea to extend the limitation period contradicted the Supreme Court’s specific guidelines.

Application u/s 95 of IBC Can be Filed by Creditor in his Individual Capacity or Jointly through RP: NCLAT

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) held tha the RP's decision to reject the claim by sending the appellant a reasoned reply cannot be faulted because the claims were made beyond the deadline of 548 days and they were based on damages and a breach of contract, which the appellant admittedly depends on.

The tribunal bench of Justice Ashok Bhushan (Judicial Member), and Mr. Barun Mitra (Technical Member) stated that claims pertain to damages resulting from non-performance of a contract, which the RP could not have decided at his level because to the limited jurisdiction granted by the IBC. "It goes without saying that the RP is not expected to process and verify the claims of a creditor without supporting proof," it added. The crystallization of damages claims necessitates their consideration by a court of competent jurisdiction.

Since unresolved claims for damages cannot be considered crystallized claims, the RP's refusal to admit them is not deemed unreasonable. The tribunal also dismissed the appellant's argument that the RP must verify all claims received up to seven days prior to the date of the creditors' meeting to vote on the resolution plan in accordance with CIRP Regulation13(1)(B).

Assessment Proceedings Cannot be Continued by EPFO After Initiation of Moratorium u/s 14 of IBC: NCLAT

Employees’ Provident Fund Organization Regional Office vsJaykumar Pesumal Arlani CITATION: 2025 TAXSCAN (NCLAT) 106

The National Company Law Appellate Tribunal (NCLAT) has held that assessment proceedings cannot be continued by Employees' Provident Fund Organisation (EPFO) after the initiation of the moratorium under section 14 of the Insolvency Bankruptcy Code ( IBC) , 2016.

Noting the difference between moratorium under section 14 which comes into play after admission of insolvency application and section 33 which kicks in when liquidation order is passed, the bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical member) observed that once order of liquidation is passed, moratorium under Section 14 comes to an end and moratorium under Section 33(5), which is differently worded, comes into play.

The Tribunal held that the bar is only against suit or legal proceedings and there is no bar against assessment proceedings to be conducted by statutory Authorities, including the EPFO. Thus, after the liquidation, it is open for EPFO to carry on the assessment. Section 33(5), cannot be held to apply on assessment proceedings. However, while looking at the expression used in Section 14(1), assessment proceedings before the EPFO, cannot be continued after initiation of CIRP.

Benefit u/s 19 of Limitation Act Applicable on Last Payment Made by Corporate Debtor Within Period of Limitation: NCLAT

Super Floorings Pvt. Ltd vs Napin Impex Ltd. CITATION: 2025 TAXSCAN (NCLAT) 107

In a recent case, the Delhi bench of the National Company Law Appellate Tribunal (NCLAT)has held that the operational creditor was obviously entitled to the benefit of an extension of limitation under Section 19 of the Limitation Act when the corporate debtor clearly acknowledged the last payment, which was made within the three-year period, and both of the requirements outlined in Section 19 were met.

The tribunal bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) observed that two conditions need to be fulfilled for extending the benefit of Section 19 of the limitation which are: whether payment on account of debt or of interest on legacy is made before the expiration of the prescribed period by the person liable to pay the debt or legacy; (ii) an acknowledgment of the payment appears in the handwriting of, or in a writing signed by, the person making the payment.

NCLAT directs Revival of Company Petition after Appellant was Deprived of Remedies under Article 21 of Constitution

Mr. Tajinder Singh Bhathal, Adult vs MRF Limited, a Company incorporated CITATION: 2025 TAXSCAN (NCLAT) 108

The Chennai bench of the National Company Law Appellate Tribunal ( NCLAT ) directed the revival of company petition after appellant was deprived of remedies under article 21 of the Indian Constitution. The bench of Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) viewed that Article 21 of the Constitution of India safeguards the right to judicial remedies, which includes the right to pursue legal remedies before competent courts for the redressal of grievances.

While allowing the appeal, the Tribunal quashed the impugned order dismissing the company petition, and the company petition proceedings are revived back to be decided on merits. Further directed, the Appellant has been directed to pay Rs. 5000/- each to the three respondents as compensation for unnecessary litigation due to procedural discrepancies. Upon payment of the compensation, the company petition No. 106(CHE)/2021 would be revived and decided on merits.

NCLAT allows Resolution Applicant whose Plan once Rejected by CoC to Participate in Freshly Issued Invitation for Expression of Interest

Adroit Pharmaceuticals Pvt. Ltd vs Amit Poddar Resolution Professional & Ors. CITATION: 2025 TAXSCAN (NCLAT) 109

The Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that a fresh plan can be submitted by the same resolution applicant in a freshly issued invitation to expression of interest even if the resolution plan is disapproved by the CoC.

The tribunal observed that none of the parties, including the appellant, had contested the order dated 11.03.2024. Since the Adjudicating Authority ordered the issuance of Form G and dismissed IA No.102 of 2020 for approval of the Resolution Plan as infructuous, the order dated 11.03.2024 has become final and the appellant is no longer able to assert any rights based on its previous Resolution Plan. However, the order has not been challenged.

A two member bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) viewed that Application praying for approval of the Resolution Plan of the Appellant having been dismissed by the Adjudicating Authority and direction was issued for issuance of fresh Form G on 11.03.2024, it was open for the Appellant to participate in the Resolution Process initiated by issuance of Form G.

No Appeal under Section 61 may be Filed Against an Order which is not Covered by Part II of I & B Code: NCLAT

Renuka Devi Rangaswamy vs State Bank of India CITATION : 2025 TAXSCAN (NCLAT) 110

The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) held that since the Impugned Order does not fall to be a part of any of the orders contemplated under part II of the Insolvency Bankruptcy Code (I & B Code), 2016 it will not be appealable under Section 61 of the code.

A two member bench of Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain, Member (Technical) viewed that as far as the specific mandate of the law, the appeal under Section 61 will not lie as against the order and the nature of the order, which is under challenge in the absence of the same being falling under Part II of the I & B Code, where reference of disciplinary action against the resolution professional is directed to be taken by the IBBI itself, since not being an order falling under Part II of the I & B Code, the same would not be appealable.

Admissibility of Debt u/s 9 of IBC: NCLAT Quashes NCLT’s Rejection of CIRP Proceedings

M/s. Mamtha Steels Corporation vs Yosmite Engineering Pvt. Ltd CITATION: 2025 TAXSCAN (NCLAT) 111

The Chennai Bench of National Company Law Appellate tribunal ( NCLAT ) quashed the National Company Law Tribunal ( NCLT )’s rejection of the admissibility of debt under Section 9 of the Insolvency and Bankruptcy Code ( IBC ) and allowed the initiation of Corporate Insolvency Resolution Process ( CIRP ) proceedings against Yosmite Engineering Pvt. Ltd., the corporate debtor.

In reviewing the case, the Appellate Tribunal disagreed with the NCLT's findings. The Tribunal found the corporate debtor's defense weak, particularly given the acknowledgment of the debt in the WhatsApp messages, which the appellant contended demonstrated an admission of liability.

The two member bench comprising Justice Sharad Kumar Sharma ( Judicial Member ) and Jatindranath Swain ( Technical Member ) ruled in favor of the appellant, determining that the existence of a financial debt had been sufficiently established and that there was no valid pre-existing dispute.

Consequently, the Appellate Tribunal allowed the appeal and directed the initiation of the CIRP proceedings against the corporate debtor.

Unilateral Revocation of Guarantee does not Discharge Guarantor from his Obligations in absence of Acceptance by Creditor: NCLAT rules in favour of SBI

The tribunal held that liability of the Respondent No.1 due to subsequent amendments, if any, to the agreement to the extent they are beneficial to the Respondent No.1 would remain. The Respondent No.1 would continue to be liable for outstanding amount as per the guarantee agreement or subsequent amendments, whichever is lower, but it would not lead to discharge of his liability.

The judicial member, Justice Rakesh Kumar Jain, the technical member, Mr. Naresh Salecha, and the technical member, Mr. Indevar Pandey, determined that Respondent No. 1 is the guarantor and the corporate debtor's liability is coterminus. Liability for Respondent No. 1 would therefore only occur when the Corporate Debtor's obligations became due. Therefore, under the Act of 1963, any recognition of debt by the principal borrower is likewise regarded as an acknowledgement by the guarantor.

NCLAT upholds Rejection of Applications, Confirms Disputed Property as Part of Corporate Debtor’s Assets in CIRP

Mr. Bhagawant Narayan Naik vs Ritesh R. Mahajan CITATION: 2025 TAXSCAN (NCLAT) 113

The Chennai Bench of National Company Law Appellate Tribunal ( NCLAT ) upheld the rejection of two applications filed by the appellant, confirming that a disputed property claimed by him would remain part of the Corporate Debtor’s ( CD ) assets in the Corporate Insolvency Resolution Process ( CIRP ).

Bhagawant Narayan Naik,appellant, challenged the rejection of two applications filed during the CIRP of Sovereign Industries Limited. The appeals concerned a decision made by the Adjudicating Authority (AA)on 22.10.2024.

The appellant’s ownership claim was still in dispute in a Civil Suit (O.S. No. 16/2024). The Civil Court had issued a temporary injunction, but the Resolution Professional argued that the CIRP process should take precedence.

The NCLAT consisting of the judicial member, Justice Sharad Kumar Sharma upheld the Adjudicating Authority’s decision, concluding that the land was likely part of the Corporate Debtor’s assets. The appeal was dismissed, as the appellant's claims were subject to the Civil Court’s decision, while the CIRP process remained unaffected.

CPC will not strictly apply to Proceedings under I & B Code: NCLAT Grants Opportunity to File Objection to Principal Proceedings u/s 9

M/s. Dunzo Digital Pvt. Ltd vs M/s. Velvin Packaging Solutions Pvt. Ltd. CITATION: 2025 TAXSCAN (NCLAT) 114

The National Company Law Appellate Tribunal (NCLAT) has held that CPC will not strictly apply to proceedings under Insolvency Bankruptcy Code ( I & B Code), 2016 and granted the opportunity for filing objections against proceedings under section 9 of the code. The Tribunal quashed the impugned order rejecting the recall application dated 04.11.2024 as well as order dated 31.07.2024 of forfeiture of opportunity to file an objection.

The Appellant submitted that the Impugned Order suffers from the Appellant vices for the reason being that, the grounds which has been pleaded by him, in the application preferred on 27.09.2024 for recalling the order of 04.09.2024, have neither been referred to nor have been considered by the Learned Adjudicating Authority, while rejecting his recall application and thus the order happens to be perverse, on account of non-consideration of the grounds taken in the recall application.

The two-member bench of Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain, Member (Technical) viewed that though CPC will not strictly apply to the proceedings under I & B Code, the principles laid down will still continue to guide the proceedings in the instant case. Accordingly, the Appellant ought to have been granted an opportunity to file an objection to the principal proceedings under Section 9 of the I & B Code, 2016.

Validity of S.95 Application for Personal Guarantor: NCLAT confirms Timely Filing and Proper Authorization

Mavjibhai Nagarbhai Patel vs State Bank of India CITATION: 2025 TAXSCAN (NCLAT) 115

The Delhi Bench of National Company Law Appellate Tribunal ( NCLAT ) upheld the timely filing and proper authorization of the Section 95 application of Insolvency and Bankruptcy Code ( IBC ) 2016 filed by the Respondent-1 State Bank of India,to initiate insolvency proceedings against the personal guarantor,rejecting objections on limitation and authorization

The tribunal reviewed the timeline and determined the application was filed within the limitation period, as the default date was August 4, 2021, making the June 18, 2022 filing valid. It rejected the appellant’s claim that the default date could not be set from June 4, 2021, emphasizing that the Deed of Guarantee clearly stated the guarantor’s liability would be triggered upon the bank’s demand, which occurred on that date.

The three bench comprising Justice Ashok Bhushan ( Chairperson ),Barun Mitra (Technical Member) and Arun Baroka(Technical Member) ruled that both challenges to the timeliness and authorization were without merit. It allowed the insolvency resolution process for the personal guarantor to proceed and the appellant’s objections were rejected.

Coc’s Appeal against Resolution Plan becomes Infructuous on approval of Second Resolution Plan: NCLAT

Excel Commosale Private Limited vs Mr. Kurrapati Singarayya Chowdary CITATION : 2025 TAXSCAN (NCLAT) 116

The National Company Law Appellate Tribunal ( NCLAT ) Chennai bench has held that Coc’s appeal against resolution plan becomes infructuous on approval of the second resolution plan.

The counsel for the Appellants submitted that subsequent thereto, the process has been resorted to in pursuance to the direction issued by the Impugned Judgment under challenge, which has already been carried and the fresh Resolution Plan has been invited and later on, it stood approved too. Consequent to which, for all practical purposes, his Appeal has been rendered infructuous.

A two member bench of Justice Sharad Kumar Sharma, Member (Judicial) and Indevar Pandey, Member (Technical) viewed that ultimately after visualising the fact that, in the absence of their being a challenge given to the acceptance of the second Resolution Plan, in fact, no material benefit would be gained by the Appellants, in putting a challenge to the Impugned Order dated 03.04.2024, because for all practical purposes, the lis which was sought to be adjudicated by the Appellants in the instant Appeal has been rendered infructuous.

Successful Auction Purchaser Cannot Forced to Pay Pre-CIRP Electricity Dues before Restoring Electricity Connection: NCLAT

M/s Uttarakhand Power Corporation Limited (UPCL) vs M/s. Shyam Baba Developers & Builders Pvt. Ltd CITATION: 2025 TAXSCAN (NCLAT) 117

The New Delhi Bench of the National Company Law Appellate Tribunal ( NCLAT) has held that a successful auction purchaser cannot be forced to pay pre-CIRP electricity dues before restoring an electricity connection. Two-memberbench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) .

M/s Uttarakhand Power Corporation Limited (UPCL)T filed the appeal challenging the Order dated 06.01.2023 passed by the Adjudicating Authority (National Company Law Tribunal) filed by the Respondent No. 1. The Application filed by R-1, the Successful Auction Purchaser of the Assets of the Corporate Debtor in Liquidation, has been allowed, aggrieved by which Order, this Appeal has been filed.

Noting the Supreme Court's ruling in Tata Power Western Odisha Distribution Limited (TPWODL) & Anr. vs. Jagannath Sponge Private Limited, 2023, the NCLAT in Chinar Steel Segments Centre Pvt. Ltd. vs. Samir Kumar Agarwal, Liquidator of Bhaskar Shrachi Alloys Limited (in Liquidation) and Anr., 2023, held that "the Respondent cannot insist that unless the arrears of the electricity dues which dues were payable by the Corporate Debtor prior to disconnection are paid by the Appellant.

Title to Immovable Property cannot be Transferred based on Unregistered Instrument: NCLAT

Rahat Hussain vs Divyesh Desai & Ors. CITATION: 2025 TAXSCAN (NCLAT) 118

The New Delhi Bench of the National Company Law Appellate Tribunal ( NCLAT ) has ruled that as the property is listed in the corporate debtor's name, the liquidator has the power to seize the store. As a result, ownership to immovable property cannot be transferred using an unregistered instrument.

The appellant, Rahat Hussain, has appealed a decision made by the adjudicating authority. In accordance with Sections 43, 44, 66, and 67 of the Insolvency and Bankruptcy Code, 2016, the liquidator filed the IA. The application was granted, and it was determined that the transaction was fraudulent and did not transfer any rights or interests of the corporate debtor to the appellant.

The bench consisting of Justice Ashok Bhushan ( Judicial Member ) and Mr. Arun Baroka ( Technical Member )figured that since the property was listed in the corporate debtor's name in the records, the liquidator had every right to seize the store, even if the appellant was unable to provide any proof of ownership. The appellant cannot assert that it has obtained any title based on the unregistered agreement to sell.

Eviction of Tenant from Corporate Debtor's Property Cannot be Sought Under u/s 60(5) of IBC

Sumati Suresh Hegde & Ors vs Anand Sonbhadra CITATION: 2025 TAXSCAN (NCLAT) 119

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) has held that eviction of tenant from the property of corporate debtor can only be sought under the Act in which tenancy was created and such power of eviction cannot be exercised by the adjudicating authority under Section 60(5) of the Insolvency Bankruptcy Code (IBC), 2016.

Referencing Section 18(1)(f) and Section 25 of the Code, the Tribunal noted that the IRP/RP is responsible for assuming immediate custody of all CD assets; as a result, the property in question must be returned to him following the current appellants' eviction. The Tribunal further held that the provisions of Section 238 will take precedence over the Act's provisions that protect the appellants' tenancy.

The tribunal bench consisted of Mr. Naresh Salecha, a technical member, and Justice Rakesh Kumar Jain, a judicial member. While the tenancy lasts until it is altered by a contract or by operation of law, the lease has a set duration that can be ended by giving notice in accordance with Section 106 of the Transfer of Property Act, 1882.

Application u/s 9 of IBC can be Rejected on Initiation of Arbitration Proceedings before Issuance of Demand Notice: NCLAT

R.A.J. KRISHNA CONSTRUCTION COMPANY PRIVATE LIMITED vs NEWERA SOLUTIONS PRIVATE LIMITED CITATION: 2025 TAXSCAN (NCLAT) 120

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) has decided that the commencement of arbitration proceedings prior to the demand notice being issued under section 8 of the code indicates a pre-existing disagreement, which may be a reason to deny an application under section 9 of the Insolvency Bankruptcy Code (IBC), 2016.

The appellant, R.A.J. Krishna Construction Company Private Limited, filed an appeal against an NCLT ruling that rejected an application under section 9 of the code. It was argued that the initial work order contained a novation of the original contract. As a result, H&S's arbitration notice cannot be regarded as the Corporate Debtor's arbitration notice upon contract novation. It was stated that H&S had no right to use arbitration since there was no longer a privity of contract between them and the appellant because the rights and titles they had under the original work order had been transferred to the corporate debtor.

The Tribunal, comprising Mr Barun Mitra, a technical member, and Justice Ashok Bhushan, judicial member, ruled in rejecting the appeal that an arbitration notification proves a pre-existing disagreement because it is a formal communication from one party to the other that starts arbitration procedures. Thus, this is adequate justification for denying a Section 9 application.

NCLAT Upholds E-Auction Process, Prioritizes sale of Corporate Debtor Over S.230 Scheme

Narottamka Trade & Vyapaar Pvt. Ltd., vs SPP Insolvency Professionals LLP CITATION: 2025 TAXSCAN (NCLAT) 121

The Chennai Bench of National Company Law Appellate Tribunal ( NCLAT ) upheld the e-auction process, prioritizing the sale of the Corporate Debtor ( CD ), as a going concern over a Scheme of Arrangement proposed under Section 230 of the Companies Act, 2013.

On appeal, the appellant argued that its Scheme should have been prioritized and assessed through a Creditors' meeting under Section 230(1) of the Companies Act, 2013, rather than being rejected by the SCC. The appellant also claimed that the Liquidator violated Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016, which mandates a 90-day period for completing the Scheme process.

The bench of the judicial member, Justice Sharad Kumar Sharma upheld the NCLT's decision, emphasizing that the sale of the Corporate Debtor as a going concern met the IBC’s objective. It noted that the appellant’s Scheme was submitted beyond the 90-day limit and that the SCC was competent to reject it. The NCLAT dismissed the appeal, stating that minor procedural discrepancies in the e-auction did not impact its validity.

NCLAT Denies Extension for Auction Deposit, Grants Partial Refund of EMD Due to COVID-19

Nimmagadda Surya Pradeep Bio-Tech Pvt. Ltd vs Kamineni Steels & Power India Pvt. Ltd CITATION: 2025 TAXSCAN (NCLAT) 122

The Chennai Bench of National Company Law Appellate Tribunal(NCLAT) The Chennai Bench of National Company Law Appellate Tribunal (NCLAT) denied the appellant's request for an extension to deposit the remaining bid amount in a corporate auction, citing repeated failures to meet deadlines despite multiple opportunities, and granted partial refund of the Earnest Money Deposit (EMD) due to challenges arising from the COVID-19 pandemic.

The liquidator invited bids for the assets, but previous attempts failed. On 26.08.2020, the appellant submitted the highest bid of Rs. 351 Crores, and a Letter of Intent was issued. However, the appellant failed to pay the remaining Rs. 346 Crores by the deadline of 24.11.2020, despite multiple extensions. The NCLT cancelled the sale and forfeited the Rs. 5 Crore EMD on 25.08.2021.

The two member bench comprising Justice Sharad Kumar Sharma(Judicial Member) and Jatindranath Swain(Technical Member) agreed that the appellant's inability to deposit the amount was due to factors beyond their control. They decided that 25% of the EMD (Rs. 1.25 Crores) would be retained, and the remaining 75% (Rs. 3.75 Crores) would be refunded within a month.

Corporate Debtor has absolute rights over property forming part of the liquidation estate: NCLAT

Wockhardt Ltd. & Anr. VS Rajeev Mannadiar CITATION: 2025 TAXSCAN (NCLAT) 123

In a significant case, the National Company Law Appellate Tribunal ( NCLAT )has held that the Corporate Debtor has absolute rights over property forming part of the liquidation estate. The Tribunal ruled that the petitioner did not acquire any rights over the contested area as a result of payments made toward sub-letting charges.

The Tribunal cited Kota vs. Shukla and Brothers [ (2010) 4 SCC 785 ], in which it was noted that "Courts should record reasons for their conclusions to enable the appellate or higher courts to exercise their jurisdiction appropriately and in accordance with law." Kota was the Assistant Commissioner, Commercial Department, Works Contract and Leasing.

The chairperson, Justice Ashok Bhushan, and the technical member, Barun Mitra, ruled that a court or tribunal cannot use its judicial authority unless the explanation is recorded. According to the Tribunal, the NCLT documented its reasoning for concluding that the Coprorate Debtor had complete ownership of the property and that the 13,000 square foot space cannot be excluded from the liquidation estate.

NCLT cannot decide on non-computation of salary after layoff period under Industrial Disputes Act: NCLAT

Drish Shoes Workers Union vs Drish Shoes Ltd. CITATION: 2025 TAXSCAN (NCLAT) 124

The New Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) has held that National Company Law Tribunal ( NCLT ) should not decide on non-computation of salary after layoff period under Industrial Disputes Act as the provisions of Industrial Dispute Act is not in the domain of the adjudicating authority.

it was contended that the Tribunal's ruling in Era Labourer Union of Sidcul, Pant Nagar, through its Secretary vs. Apex Buildsys Ltd. (2024) clearly addresses the issues brought in the current appeal. Both the layoff and the pay calculation were contested in the aforementioned ruling by the Adjudicating Authority through an IA, which was rejected, and the salary was not calculated following the layoff time until the start of insolvency.

While agreeing with the respondent's arguments, the bench of Justice Ashok Bhushan ( Judicial Member ), Mr. Barun Mitra ( Technical Member ), and Mr. Arun Baroka ( Technical Member ) noted that the Resolution Professional's failure to calculate the salary after layoff cannot be attributed to the Resolution Professional's lack of adjudicatory jurisdiction.

CoC ‘s Commercial wisdom in rejecting resolution plans and opting for liquidation is “Non-Justiciable”: NCLAT

Fortune Chemicals Limited vs Ashok Kumar Jaiswal CITATION: 2025 TAXSCAN (NCLAT) 125

The National Company Law Appellate Tribunal ( NCLAT ) New Delhi has held that the commercial wisdom of the Committee of Creditors ( CoC ) in rejecting a resolution plan and opting for liquidation is “non-justiciable”.

The Tribunal found that the Corporate Debtor's CIRP contained only one resolution strategy. The plan does not meet Section 29A of the IBC's qualifying standards. Mr. Avanish Kumar Singh, a director of the appellant firm and the applicant for a prospective resolution, was also a director of a company that had not filed financial statements for three years in a row.

The Tribunal comprising Justice Rakesh Kumar Jain, Member ( Judicial ) and Ajai Das Mehrotra, Member ( Technical ) observed that such a director was barred from being reappointed as a director in any business for a period of five years under Section 164 of the Companies Act, 2013. Thus, in accordance with Clause (e) of Section 29A of the IBC, 2016, the appellant corporation was not qualified.

No Appeal u/s 61 of IBC Maintainable after Dissolution of Corporate Debtor: NCLAT

New India Color Company Ltd vs Samtex Desinz Pvt. Ltd. (In CIRP) & Anr. CITATION : 2025 TAXSCAN (NCLAT) 126

In a recent ruling, the New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that an appeal under section 61 of the IBC cannot be entertained after the dissolution of the corporate debtor under section 54 of the Insolvency Bankruptcy code(IBC), 2016.

The bench of Justice Rakesh Kumar Jain ( Judicial Member ) and Mr. Naresh Salecha ( Technical Member ) held that since the corporate debtor has already been dissolved by an order passed by the Adjudicating Authority under section 54 of the code, the present appeal has become infructuous and dismissed the same.

It was held that the Appellant may have recourse to address its grievance before any forum in accordance with law but it does not mean that any liberty has been given by the court.

NCLAT upholds S. 95 Application against Personal Guarantor, Rejects Time-Bar Claim and Authorization Challenge

Mavjibhai Nagarbhai Patel VS State Bank of India CITATION: 2025 TAXSCAN (NCLAT) 127

The Delhi Bench of National Company Law Appellate Tribunal ( NCLAT ) upheld the validity of the Section 95 application filed by State Bank of India, the Financial Creditor, against the Personal Guarantor, rejecting the appellant's claims of a time-barred application and challenges to the authorization of its filing.

The three-member bench comprising Justice Ashok Bhushan ( Chairperson ), Barun Mitra ( Technical Member ) and Arun Baroka ( Technical Member ) considered the arguments of both parties and reviewed the records. The two key issues were whether the Section 95 application filed by the financial creditor was time-barred and whether it was filed by a duly authorized person.

The NCLAT noted that the Personal Guarantor had executed the Deed of Guarantee and did not make the payment as demanded by the Section 13(2) Notice dated 04.06.2021. The financial creditor issued a Demand Notice on 28.09.2021, and the Section 95 application was filed on 18.06.2022, within the limitation period.

The appellate tribunal concluded that the Section 95 petition was filed on time, as the demand on the Personal Guarantor arose after the expiration of the period specified in the Demand Notice.

Rejection of Interlocutory Application for Incomplete Process Memorandum: NCLAT Allows Appeal

Sri. K.M. Mudappa vs M/s. Sovereign Developers and Infrastructure Ltd CITATION: 2025 TAXSCAN (NCLAT) 128

The Chennai Bench of National Company Law Appellate Tribunal(NCLAT) allowed the applicant’s appeal against the National Company Law Tribunal(NCLT)’s September 13, 2024 order, which had rejected the Interlocutory Application seeking to declare the process memorandum for the Resolution Plan incomplete.

The matter involved the consideration of IA No.569/2022, in which the Resolution Professional had sought condonation of a 352-day delay in filing an application for the sanction of the Resolution Plan under Section 30(6) of the IBC.

The NCLAT had previously remitted the matter back to the NCLT for reconsideration, after allowing appeals in CA (AT) (CH) (Ins) No.378/2024. The delay in the filing of the application was ultimately condoned, and the matter was sent back for proper evaluation in accordance with the law. The two-member bench comprising Justice Sharad Kumar Sharma(Judicial Member) and Jatindranath Swain(Technical Member) allowed the applicant's appeal .

Application u/s 7 IBC can be Filed to Claim Remaining Amount after Selling Pledged Shares: NCLAT

Amit Yogesh Satwara vs Incred Financial Services Limited CITATION: 2025 TAXSCAN (NCLAT) 129

The National Company Law Appellate Tribunal ( NCLAT ) New Delhi bench has held that when the entire liability of the corporate debtor after selling the pledged shares is not discharged, an application under section 7 of the IBC can be filed for claiming the remaining amount.

The Adjudicating Authority's observations that the CD's liability was not fully discharged because the CD attempted to resolve the matter even after the shares were pledged in favor of the financial creditor, indicating that there was a debt and default, were noted by the bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member).

The tribunal concluded that the adjudicating authority did not err in admitting the application under section 7 of the code because no settlement of record was presented indicating that the dispute had been settled between the parties.The tribunal further noted that if a settlement is achieved between the parties, a request to withdraw the CIRP application may be made.

Remaining amount of claim show Existence of Default Amount: NCLAT upholds Appointment of RP

Hemant Bohra vs State Bank of India & Anr CITATION: 2025 TAXSCAN (NCLAT) 130

The New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that remaining amount of claim show existence of default amount and upheld the order confirming the appointment of Resolution Professional (RP).The Tribunal confirmed the appointment of the RP and ordered the RP to make recommendation as prescribed under Section 99 of the Code as there is a default on the part of the Appellant for not fulfilling its promise.

The Appellant acknowledged the existence of debt and stated that he has not made any payment in capacity of guarantor towards the debt due by the CD of the Respondent Bank Section 99(2) provides that the debtor has to prove repayment of the debt claimed as unpaid by the creditor by furnishing evidence of electronic transfer of the unpaid amount from the bank account of the debtor, evidence of encashment of a cheque issued by the debtor or a signed acknowledgment by the creditor accepting receipt of dues whereas in the present case the Appellant categorically denied to have made payment which was sufficient to hold that there is a default.

A three-member bench of Justice Rakesh Kumar Jain, Naresh Salecha, Member (Technical) and Indevar Pandey, Member (Technical) viewed that since the Respondent Bank has already received 25.1 Cr. out of 68.5 Cr. is concerned, it is suffice to mention that the remaining amount of claim of the Respondent still exists which is more than the threshold.

Application u/s 7 of IBC Admitted can be Recalled on Proving Fraud or Malicious Intent: NCLAT

M/s Acute Daily Media Pvt. Ltd vs M/s Rockman Advertising and Marketing CITATION: 2025 TAXSCAN (NCLAT) 131

Recently, the New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that when CIRP proceedings are initiated fraudulently or maliciously, the Adjudicating Authority has jurisdiction under the IBC to consider the allegations of fraudulent and malicious initiation of CIRP proceedings in terms of Section 65 and recall the CIRP admission order.

The tribunal noted that it is widely established that merely the prerequisites of debt and default must be met in order for an application filed under section 7 of the code to be accepted. As long as the debt exceeds the threshold amount specified in section 4 of the code, a section 7 application can be accepted once it has been established and is still outstanding.The Adjudicating Authority correctly determined that the purported loan agreements were forged and antedated with fraudulent purpose in the absence of a convincing and adequate justification.

There was enough evidence to prove that the application under section 7 of the code was submitted to force the corporate debtor into insolvency, according to the bench comprising Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member), and Mr. Arun Baroka (Technical Member).

Payment slip will not establish retention allowance as part of salary in absence of supporting documents: NCLAT

M/s. Lanco Infratech Employees Welfare Association vs Ms. Anuradha Bisani, Liquidator of Lanco Infratech Ltd. CITATION : 2025 TAXSCAN (NCLAT) 132

In a recent case, the Chennai bench of the National Company Law Appellate Tribunal (NCLAT) observed that payment slip will not establish retention allowance as part of salary in the absence of supporting documents and the bench upheld the National Company Law Tribunals (NCLT) order denying the retention allowance.

A two member bench of Justice Sharad Kumar Sharma, Member ( Judicial ) and Jatindranath Swain, Member ( Technical ) viewed that the payment slip placed on record and the endorsement of the then managing director, on which the counsel for the appellant has relied heavily, will not establish the case for making the retention allowance as part of salary in itself in the absence of there being any supporting documents, about its legal enforceability.

Accordingly, the appellant and its members would not be entitled for the payment of the ‘retention allowance’, for the period of claim since not being part of the salary and since not being a fact established by the Appellant before the NCLT.

The logic that has been assigned by the NCLT, while rendering the impugned order does not suffer from any apparent error as such, which could call for any interference, in so far as the aspect and entitlement of, the retention allowance is concerned.

Appeal against Proceedings u/s 30 of IBC not survive after Implementation of Resolution Plan: NCLAT

P. Jayagovind VS Bijoy Prabhakaran Pulipra CITATION : 2025 TAXSCAN (NCLAT) 133

The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) observed that since the Resolution Plan has been fully implemented, the cause of action as agitated against the proceedings conducted under Sections 30 & 31 of I & B Code, does not survive any more to be adjudicated.

A two member bench of Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain, Member (Technical) viewed that since the Resolution Plan has been fully implemented, the cause of action as agitated in the appeal against the proceedings conducted under Sections 30 & 31 of I & B Code, does not survive any more to be adjudicated.

Financial Creditor can file Application u/s 7 of IBC even after Initiation of Recovery Proceedings before DRT: NCLAT

Pawan Kumar vs Central Bank of India CITATION : 2025 TAXSCAN (NCLAT) 134

The New Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) has held that initiation of recovery proceedings before the DRT does not prohibit financial creditors from filing an application under section 7 of the Insolvency Bankruptcy code( IBC ), 2016.

The bench comprising Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) rejected the contention of the appellant that since proceedings before the DRT had already been initiated, the bank could not file an application under section 7 of the code.

"The fact that a financial creditor has filed a case before the DRT does not preclude them from taking remedy under Section 7, which is a special remedy provided under the IBC," the ruling stated.

The tribunal determined that no arguments had been presented against the contested order admitting the section 7 application, and as a result, the appeal should be dismissed. Additionally, it mandated that the CD provide an OTS plan within two weeks and then file an application under section 12A to have the CIRP application withdrawn.

Authorised Representative Can be Replaced by Procedure Provided under Regulation 16(3A) of CIRP Regulations: NCLAT

Ashmeet Singh Bhatia vs Rakesh Verma CITATION : 2025 TAXSCAN (NCLAT) 135

The National Company Law Appellate Tribunal's ( NCLAT ) New Delhi bench ruled that the authorized representative can be replaced by following the process outlined in Regulation 16(3A) of the CIRP Regulations, and the adjudicating authority cannot consider an individual homebuyer's application to replace the authorized representative.

In evaluating the parties' case on the basis of merits, the tribunal noted that section 25A of the code stipulates that the authorized representative of the financial creditors is responsible for attending CoC meetings and casting votes in accordance with the financial creditors' directives based on their voting shares.

The bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) viewed that as per the statutory scheme, all voting which has to be done by the Authorised Representative in the Meeting of the CoC is on the basis of prior instructions received from Financial Creditors.

The tribunal pointed out that the AA had clarified in the order that the RP was being replaced because the RP had not fulfilled his responsibilities regarding crucial aspects imposed upon him by the code, not because of the applicant's plea. As a result, the appellant's argument that the authorised representative should also be removed on the same grounds cannot be accepted.

Contempt Appeal against Juristic Entity not Maintainable u/s 61 of IBC: NCLAT

Mr. Pankaj Dhanuka VS Lanco Kondapalli Power Limited CITATION : 2025 TAXSCAN (NCLAT) 136

The Chennai Bench of National Company Law Appellate Tribunal ( NCLAT ) ruled that a contempt appeal against a juristic entity is not maintainable under Section 61 of the Insolvency and Bankruptcy Code (IBC), 2016.

The tribunal rejected the appellant's arguments, clarifying that Section 60(5) of the I & B Code is a savings clause and should only be invoked in cases of procedural gaps where no specific remedy exists. It stated that Section 60(5) could not be applied to override existing provisions regarding contempt proceedings, specifically Section 425 of the Companies Act and Sections 12/14 of the Contempt of Courts Act.

The NCLAT bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Indevar Pandey(Technical Member) also explained that under Section 19 of the Contempt of Courts Act, appeals were only maintainable against orders imposing punishment for contempt, as established in Midnapore Peoples’ Coop. Bank Ltd. v. Chunilal Nanda. It referred to the Supreme Court’s ruling in Ajay Kumar Bhalla v. Prakash Kumar Dixit (29.07.2024), which further affirmed that appeals in contempt matters could only be filed if a punishment had been imposed

Orders Obtained through Fraud may be Recalled by Adjudicating Authority u/r 11 of the NCLT Rules: NCLAT

Marvel Landmarks Pvt Ltd. vs Jay Nihalani CITATION : 2025 TAXSCAN (NCLAT) 137

The National Company Law Appellate Tribunal ( NCLAT ) has observed that where the adjudicating authority has been made to rely on distorted facts which the adjudicating authority became aware of belatedly, the adjudicating authority can always invoke its inherent powers under Rule 11 of NCLT Rules in order to protect itself and to prevent an abuse of its process.

The Tribunal observed that having already dismissed the Company Petition on 04.06.2024, the Adjudicating Authority, based on a recall application, cannot revisit the Company Petition on the ground that the dismissal was incorrect or that it had been incorrectly adjudicated because of disputed facts.

The bench, which included Justice Ashok Bhushan as the chair, Barun Mitra as a technical member, and Arun Baroka as a technical member, noted that fraud renders all proceedings void and that the court has the authority to revoke an order that was issued as a result of court fraud. According to the Tribunal, the adjudicating authority was right to recall the order since the appellants used the Respondent's absence and the suppression of material facts to achieve it.

NCLAT uphold Resolution Plan In absence of irregularity in conduct of CIRP Proceedings

Yashdeep Sharma vs Tara Chand Meenia CITATION : 2025 TAXSCAN (NCLAT) 138

The New Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) upheld the resolution plan in absence of irregularity in the conduct of Corporate Insolvency Resolution Proceedings ( CIRP ) proceedings.

It was asserted that the RP had been fair and transparent in the conduct of the CIRP and made complete disclosure of all relevant information to all the relevant stakeholders on the resolution plans of all PRAs for proper conduct of voting process

A closer look at the minutes of the 53rd CoC meeting shows that a password protected resolution plan was submitted belatedly by the appellant, which was not considered as they had failed to submit EOI within the prescribed timeline in Form G and also failed to submit earnest money. Thus, when the appellant had themselves submitted a password protected resolution plan without any protestation, they cannot now contend that this procedure suffered from irregularities.

A two member bench of Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) viewed that there is no patent irregularity found in the conduct of CIRP proceedings by the RP nor any facts and circumstances placed on record which substantiate that the appellant, in their capacity as suspended management was prevented by the RP/CoC from effectively participating in the CoC deliberations.

Commercial Wisdom of CoC in approving Resolution Plan needs no Interference by Adjudicating Authority unless Plan is Violative of section 30(2) of IBC: NCLAT

Yogeshkumar Jashwantilal Thakkar vs George Samuel, Resolution Professional of Jason Dekor Private Limited CITATION : 2025 TAXSCAN (NCLAT) 139

In a recent case, the New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that commercial wisdom of the CoC in approving a resolution plan needs no interference by the Adjudicating Authority unless Plan is violative of Section 30(2) of the Insolvency Bankruptcy Code (IBC), 2016

The appellant in the appeal has not made out any ground to the effect that the Resolution Plan submitted by Respondent No. 3 violates any of the provisions of Section 30(2) of the IBC. It is well settled that commercial wisdom of the CoC in approving the resolution plan needs no interference by the Adjudicating Authority/Appellate Tribunal unless the Plan is violative of Section 30(2).

The Supreme Court in the matter of `K. Sashidhar’ Vs. `Indian Overseas Bank & Ors.’ reported in (2019) has held that the legislature has not endowed the Adjudicating Authority with the jurisdiction or authority to analyse or evaluate the commercial decision of the CoC.

A two member Justice Ashok Bhushan, Chairperson and Arun Baroka, Member (Technical) viewed that the Valuation Report was shared with the Members of the CoC and no Member of the CoC raised any objection regarding the valuation.

NCLAT Orders Meta to Pay Penalty; Stays Ban on WhatsApp's Data-Sharing Policy [ PENDING]

Whatsapp LLC vs Competition Commission of India & Ors. CITATION : 2025 TAXSCAN (NCLAT) 140

The National Company Law Appellate Tribunal (NCLAT) stayed the 5-year ban on WhatsApp data sharing with Meta and directed to pay 50% percent of the penalty within two weeks, holding that such a ban could disrupt WhatsApp's business model in India. The Competition Commission India (CCI) ruling against WhatsApp's 2021 privacy policy change has been partially lifted by the bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member).

The Tribunal viewed that WhatsApp offered free services to its users and that the 5-year moratorium might "lead to the collapse of the business model." The Digital Personal Data Protection Act has also been passed and is probably going to be enforced, which may cover all matteAccording to the Tribunal, WhatsApp provided its customers with free services, and the five-year embargo could "lead to the collapse of the business model."

While allowing WhatsApp and the CCI to seek modifications to the order in the event that the DPDP Act or any other data protection and sharing legislation is put into effect