Petition u/s 9 of IBC cannot be Rejected merely on General Dispute raised based on Single Whatsapp Message: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has held that a petition under section 9 of the Insolvency Bankruptcy Code (IBC) cannot be rejected merely on general dispute raised based on a Single WhatsApp message

The bench comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) observed that the reply that was given was vague and merely stated that since arbitration proceedings had been initiated by the Appellant, the petition should be dismissed on the ground of a being a pre-existing dispute between the parties.

The Tribunal held that the debt and default are clearly established, and the debt has also been acknowledged in the ledger accounts. Further held that the WhatsApp message which is presented a record of pre-existing dispute vaguely refers to dispute in 2018 and fails to refer to any specific invoice or the amount which have been questioned in the message. This Whatsapp message cannot create a foundation for treating a whole series of transactions as pre-existing disputes. The court set aside the impugned order and allowed the appeal.

NCLAT Upholds Fraud Finding Against Former Director: Orders ₹3.18 Cr Contribution for Sham Transactions

The National Company Law Appellate Tribunal (NCLAT) has upheld the NCLT’s order directing former director Mr. Gopal Kalra to contribute ₹3.18 crore to the assets of Easytech Global Pvt. Ltd. The Tribunal found that Kalra was knowingly involved in fraudule Sham Transactions: NCLAT Orders Former Director to Contribute ₹3.18 Cr to Debtor’s Estatent trading, including bogus LED bulb transactions with fictitious entities, causing actual financial loss to the company and its creditors.

The appeal was filed under Section 61 of the IBC against an order of the NCLT, New Delhi Bench, which held Kalra liable under Section 66(1) for entering into sham business transactions that served no commercial purpose and were designed to siphon off funds.

The Tribunal emphasised that a ₹3.18 crore loss was not notional. It was a “real cash outflow,” traceable through bank transfers and unaccounted vendor payments. Kalra failed to produce any invoices, stock, or explanation for the missing funds.

The NCLAT also upheld the NCLT’s direction under Section 66(1), which allows adjudicating authorities to order persons responsible for fraudulent trading to contribute to the debtor’s estate. It found the ₹3.18 crore liability to be reasonable, directly proportionate to the established loss, and supported by forensic accounting evidence.

The appellate bench comprising Justice Rakesh Kumar Jain (Judicial member), Naresh Salecha (technical member), and Indevar Pandey (technical member), held that siphoning off funds under fabricated transactions, regardless of whether money was pocketed personally, amounts to financial misconduct under the Code.

NCLAT affirms that it Lacks Jurisdiction to Interfere with Confirmed ED Attachments Under PMLA

The Delhi bench of the National Company Law Appellate Tribunal (NCLAT) held that NCLT/NCLAT does not have jurisdiction to interfere with confirmed attachments under the PMLA.

In this case, the appeal has been filed under Section 61(1) of the Insolvency and Bankruptcy Code, by Anil Kohli, the Resolution Professional (RP) for Dunar Foods Limited (Corporate Debtor),

The tribunal comprising Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member), and Indevar Pandey (Technical Member),noted that the Adjudicating Authority confirmed the PAO in accordance with Section 8(3) of the PMLA. The Appellant/RP should file an appeal under Section 26 of the PMLA to the Appellate Tribunal.

The NCLAT, by relying on the Apex Court’s judgement in the case of Kalyani Transco Vs. M/s. Bhushan Power and Steel Ltd and Others (Civil Appeal No. 1808 of 2020) held that it lacked jurisdiction to interfere with the PAO, which has been subsequently confirmed by the Adjudicating Authority under the PMLA.

NCLAT Dismisses ED’s Appeal as Time-Barred: Limitation Begins from Date of Order, Not Knowledge

Limitation Begins on Date of Order: NCLAT Dismisses ED’s Appeal as Time-BarredThe National Company Law Appellate Tribunal (NCLAT) has dismissed the Directorate of Enforcement’s (ED) appeal challenging the approval of a resolution plan, holding that the appeal was filed beyond the statutory time limit.

The NCLAT held that it cannot be computed like that and relied on several judgments, including the Supreme Court’s authoritative decisions in V. Nagarajan v. SKS Ispat & Power Ltd., Sanjay Pandurang Kalate v. Vistara ITCL (India) Ltd., and Tata Steel Ltd. v. Rajkumar Banerjee. The Tribunal asserted that the limitation begins from the date of pronouncement, not from the date of receipt or knowledge of the order.

The Tribunal comprising Justice Ashok Bhushan, MrBarun Mitra and Mr Arun Baroka, asserted that the IBC is a self-contained code with strict deadlines to ensure prompt resolution. Any deviation from the statutory period, except as explicitly provided under Section 61(2), is beyond the Tribunal's jurisdiction

Having found the appeal filed well beyond the maximum permissible 45-day window, the Tribunal concluded it had no jurisdiction to condone the delay.

NCLAT Confirms CIRP Admission Despite OTS with Guarantors, Says Corporate Debtor Still Liable

Corporate Debtor Liable: NCLAT Confirms CIRP Admission The National Company Law AppellateTribunal (NCLAT), in a recent ruling, upheld the initiation of the CorporateInsolvency Resolution Process (CIRP) against M/s Ace Engineering (India) Pvt. Ltd., rejecting claims that a One-Time Settlement (OTS) with personal guarantors extinguished the company’s debt. The appeal was dismissed on July 3, 2025.

The Tribunal pointed out that the settlement was strictly between the bank and the guarantors. There was no formal release of the company from its liability. The bank had made it explicitly clear in its correspondence that while the guarantors were discharged, the borrower was still liable for the remaining dues.

The tribunal comprising, Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member) and Indevar Pandey (Technical Member), upheld that simply being operational or having ongoing contracts is not enough to block CIRP unless there’s compelling evidence of receivables or solvency, which, in this case, was lacking.

Citing legal precedents like Laxmi Pat Surana v. Union Bank of India, the Tribunal asserted that releasing guarantors doesn’t automatically release the borrower unless the lender explicitly agrees. And in this case, it hadn’t. The NCLAT found no merit in the appeal and upheld the NCLT’s decision to admit the Section 7 application and initiate CIRP.

NCLAT holds Investment Under Reseller Agreement Lacks ‘Financial Debt’ Ingredients and Dismisses S. 7 Plea as Abuse of CIRP Process

The National Company Law Appellate Tribunal (NCLAT) held that the investment under the reseller agreement lacks ‘financial debt’ ingredients under the Insolvency and Bankruptcy Code and dismissed the application filed under Section 7 of the IBC by noting it as an abuse of the Corporate InsolvencyResolution Process (CIRP).

The tribunal, after going through the records, noted that the appellant did not did not disburse funds to the respondent as a loan or borrowing.

The bench observed that the Reseller Agreement, which outlines the nature of the transaction, does not include any stipulations about time value of money. The purchase followed the Reseller Agreement, which emphasised profit margins over interest. Correspondence between parties does not convert commercial transactions into financial debts.

The tribunal also noted that the arbitration clause supported the idea that the disagreement should have been resolved through arbitration rather than the CIRP process under the Code.

The NCLAT bench comprising Justice Rajesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member), and Indevar Pandey (Technical Member), held that the debt in question was not a financial debt as defined under the Code, due to which the appellant does not qualify as a ‘Financial Creditor’ under the Code and hence cannot invoke insolvency proceedings.

Second Demand Notice Issued u/s 8 of IBC amounts to Fresh Notice: NCLAT

In a recent case, the Principal Bench of the National Company LawAppellate Tribunal (NCLAT) observed that the second demand notice issued under section 8 of the Insolvency and Bankruptcy Code (IBC), 2016, amounts to a fresh notice. Since the second demand notice for all legal purposes was a continuation of the first demand notice, the Civil Suit cannot be treated as a pre-existing dispute as it had been filed after the receipt of the first demand notice by the Corporate Debtor.

A two-member bench comprising Justice Ashok Bhushan, Chairperson, and Barun Mitra, Member (Technical) observed that since the second demand notice for all legal purposes was a continuation of the first demand notice, the Civil Suit cannot be treated as a pre-existing dispute as it had been filed after the receipt of the first demand notice by the Corporate Debtor.

Cumulatively seen, it clearly signifies that a dispute already existed between the parties which constituted sufficient ground for rejection of a Section 9 application. In the face of such pre-existing disputes, the Adjudicating Authority had not committed any error in rejecting the Section 9 application.

Once the plausibility of a pre-existing dispute is noticed, it is not required of the Adjudicating Authority to make further detailed investigation. What has to be looked into is whether the defence raises a dispute which needs further adjudication by a competent court. It is well settled that in a Section 9 proceeding, the Adjudicating Authority is not to enter into final adjudication with regard to the existence of dispute between the parties regarding the operational debt. There was no requirement for the Adjudicating Authority in the present case to go under the skin of dispute and therefore the Adjudicating Authority rightly held that the Section 9 application was not maintainable in the present factual matrix.

Default occurred beyond outer limit of S.10A of IBC, Insolvency Application can be files Afresh: NCLAT

The bench of the National Company Law Appellate Tribunal (NCLAT) has held that when a default occurs beyond outer limit of Section 10A of Insolvency and Bankruptcy Code 2016 (‘IBC’), a fresh insolvency application can be filed under Section 7 of the Code.

The Tribunal found that the termination of restructuring was not automatic but was dependent on the exercise of this choice by the Respondent No.1-Financial Creditor to revoke the restructuring in the event of failure to comply with the restructure terms. The restructure terms provided for independent events of default and such a default having undisputedly occurred, we are of the view that the Financial CreditorRespondent No.1 had exercised the option clearly available to them to file a fresh Section 7 petition with the amount of debt modified from the first Section 7 petition and a fresh date of default.

The Adjudicating Authority has also correctly held that the factual matrix of the Maneesh judgment supra relied upon by the Corporate Debtor does not come to their aid since in that case cancellation of restructuring was automatic with no scope for a fresh cause of action. The above judgement was in its own facts and does not render any help to the Appellant in the present case.

A three-member bench comprising Justice Ashok Bhushan, Chairperson , Barun Mitra, Member (Technical) and Arun Baroka, Member (Technical) agreed with the Adjudicating Authority that no provision under Section 10A of the IBC prohibits parties from entering into a valid debt restructuring arrangement during or after the Section 10A suspension period. The impugned order has correctly noted at paragraph 4.9 that Section 10A was introduced to provide temporary relief during the COVID-19 pandemic which did not curtail the substantive contractual rights of parties to restructure their debts.

It was evident that “the relevant default occurred on 25 March 2023 which was well beyond the outer limit of Section 10A, which squarely brings the claim within the permissible scope of Section 7 of the IBC.

NCLAT Rejects Financial Creditor Claim as No Valid Guarantee Was Executed or Invoked Under IBC

The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) held that the appellant failed to prove that a valid and binding corporate guarantee was executed by the corporate debtor and thus rejected the financial credit claim made by the appellant.

In this case, the appeal was filed by Moneywise Financial Services Private Limited under Section 61 of the Insolvency and Bankruptcy Code, 2016, National Company Law Tribunal, New Delhi Bench.

The tribunal noted that the appellant failed to establish a valid and enforceable guarantee.

The bench comprising Justice Rajesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member), and Indevar Pandey (Technical Member), observed that Clause 28 of the MLA appeared to be an assurance by the corporate debtor to return the facilities given to IHCPL. However, it is part of a larger loan agreement that primarily records the loan extended to IHCPL. It also allows for invoking the guarantee. Clause 28's alleged assurance was never invoked. Dream Procon Pvt. Ltd.'s Board of Directors has not authorised or passed a corporate resolution to back up their pledge to guarantee, and that the lack of such authorisation is fatal.

The tribunal held that a legally binding, valid guarantee had not been executed by the respondent, due to which the appellant did not qualify as a financial creditor of the corporate debtor on the strength of the alleged guarantee.

NCLAT Declines to Interfere in Liquidator’s Appeal, Urges Swift Disposal of Auction Dispute

Ramesh Kumar Totla, Liquidator of Galaxy Cotton and Textiles Pvt. Ltd vsShyam Sundar Commodities Pvt. Ltd.

CITATION : 2025 TAXSCAN (NCLAT) 267

The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, recently disposed of an appeal filed by a Liquidator expressing concern over the pendency of key applications stalling the liquidation process. The Tribunal refrained from intervening at this stage but urged the Adjudicating Authority to take up the matter without delay.

The NCLAT referred to its earlier order dated October 21, 2024, wherein it had made it clear that the Adjudicating Authority must decide the pending IAs in accordance with law and that the Liquidator should not proceed further with the liquidation process until the disposal of those applications.

The Appellate Tribunal bench comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), acknowledged the Liquidator’s concern regarding the delay, but chose not to entertain the fresh appeal, considering that the NCLT had already scheduled a hearing for the end of July.

NCLAT Quashes Admission of Homebuyers’ Insolvency Plea, Holds Section 7 Application Deemed Withdrawn Under Amended IBC

The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) quashed the admission of home buyer’s admission plea, noted that the application under Section 7 of the Insolvency and Bankruptcy Code 2016 was "deemed withdrawn" under the updated Insolvency and Bankruptcy Code (IBC).

The appeal has been filed by the suspended director of the corporate debtor (CD), M/s Gayatri Hospitality and Realcon Ltd., challenging the order passed by the National Company Law Tribunal (NCLT).

The NCLAT bench comprising Justice Ashok Bhushan and Member (Technical) Barun Mitra supported this proposal, instructing the debtor to fulfil its promises within 60 days.

NCLAT held that the Section 7 application filed by the homebuyers has to be treated as withdrawn by the third provision of Section 7, subsection (1) of IBC.

‘CERSAI Registration Enough to Claim Secured Creditor Status Under IBC; RoC Non-Registration Not Fatal’: NCLAT

The bench of the National Company Law Appellate Tribunal (NCLAT) held that CERSAI registration was enough to claim secured creditor status under IBC and noted that RoC non-registration was not fatal.

In this case, Bizloan Private Limited appealed against the order passed by the National Company Law Tribunal, Mumbai bench, which classified the appellant as an unsecured creditor instead of a secured financial creditor.

The NCLAT held that a security interest by the creditors can also be proved if the same is available in CERSAI and is not completely and exclusively dependent on a charge registered with RoC under Section 77 of the Companies Act, 2013.

The bench concluded that the appellant should have been treated as a secured financial creditor based on the registered charge with CERSAI under Regulation 21 of the IBBI (Liquidation Process) Regulations, 2016.

The NCLAT bench comprising Justice Rakesh Kumar Jain (Judicial Member), Justice Mohammad Faiz Alam Khan (Judicial Member), and Mr. Naresh Salecha (Technical Member), allowed the appeal and set aside the impugned order.

NCLAT Allows CIRP Withdrawal After Lenders Agree to Govt-Backed Revival Plan

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has allowed the withdrawal of insolvency proceedings initiated against SE Transstadia Pvt. Ltd., after the lead lender Bank of Baroda, along with other financial creditors, consented to a revival plan supported by the Government of Gujarat.

The matter arose from two appeals filed by Udit Harish Seth, a suspended director of SE Transstadia, challenging the admission of a Section 7 application by the National Company Law Tribunal (NCLT) on April 8, 2024. The NCLT had allowed the initiation of Corporate Insolvency Resolution Process (CIRP) based on a plea filed by Bank of Baroda.

The NCLAT found that no useful purpose shall be served in keeping the appeal pending. The Tribunal granted liberty to Bank of Baroda to file an application under Section 12A of the Insolvency and Bankruptcy Code, 2016, seeking formal withdrawal of the CIRP before the Adjudicating Authority.

It was held that the stay on the April 8, 2024 order will continue, and the Interim Resolution Professional (IRP) has been directed to assist with the withdrawal process upon receiving Form FA from the lead bank.

The Tribunal bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) disposed of both appeals as a result.

NCLAT Refuses to Recall Dismissal Order: Says No Grounds for Reassessment

The National Company Law Appellate Tribunal (NCLAT) has dismissed a series of recall applications filed by members of the Jain family, seeking to revisit an earlier order that had rejected their appeals against the resolution process of Rajesh Projects (India) Pvt. Ltd.

The Tribunal bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member), categorically rejected the recall plea. It referred to the landmark Supreme Court judgment in Sri Budhia Swain v. Gopinath Deb, which clearly outlines the limited circumstances under which judicial orders can be recalled.

The NCLAT clarified that while it and the NCLT possess inherent powers to recall an order, they do not have the power to review a decision once rendered unless statutory provisions explicitly provide for it.

The NCLAT concluded that there was no mistake, no new evidence, and no legal oversight that would justify recalling the decision. As a result the Tribunal dismissed all the applications across the linked appeals filed by the jain family as each of these applications had sought the same relief, reopening a case that had already been conclusively decided.

NCLAT Dismisses Plea for Video Recording in Essar Steel-Related Proceedings: Rules No Special Grounds Made

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, dismissed a plea filed by a shareholder of SREI Infrastructure Finance Ltd. (SIFL) seeking video recording of appellate proceedings in the insolvency matters related to Essar Steel India Ltd. (ESIL) and Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL).

The Tribunal bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra, noted that permission for such recording is governed by specific conditions outlined in its administrative order dated 22.11.2024. As per paragraph 15 of the SOP, video recording is permissible only if “special reasons” are demonstrated and accepted by the Court.

The Bench stated that the Applicant had failed to present any compelling or exceptional grounds to warrant deviation from the standard procedure.

The Tribunal however reassured Khosla that all his arguments would be duly considered and recorded, and he would have ample opportunity to submit written submissions.

As a result the NCLAT dismissed the plea, ruling that no case had been made out for recording the proceedings and disposed of the matter with no order as to costs.

NCLAT Refuses to Entertain ₹13.6 Cr GST Claim Filed After Resolution Plan Approval

Joint Commissioner of State Taxes vs M/s Radiant Castings PrivateLimited

CITATION : 2025 TAXSCAN (NCLAT) 273

The National Company Law Appellate Tribunal (NCLAT) dismissed a plea by the Himachal Pradesh GST Department seeking to recall an approved resolution plan, citing belated claims worth ₹13.6 crore.

The Appellate Tribunal held that allowing such late-stage claims, especially after the resolution plan has already been implemented, would not only derail the Corporate Insolvency Resolution Process (CIRP) but also undermine the objectives of the IBC framework.

The Tribunal wasn’t convinced. It ruled that the Department had every opportunity to file the full claim during the CIRP, but failed to do so. Although two emails referring to the ₹13.6 crore dues were sent to the Resolution Professional, no formal claim was ever filed in the prescribed format or within the deadline.

The NCLAT observed that the Insolvency Resolution Professional had acted strictly in accordance with the IBC and CIRP Regulations, and there was no procedural irregularity in how claims were invited and assessed. The delay, it said, was solely attributable to the Department’s own inaction.

The three-member bench comprising JusticeAshok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member), noted that the approved resolution plan had already been substantially implemented, and the Department had received more than its liquidation value entitlement.

NCLAT Dismisses Appeal, Grants Liberty to Seek Withdrawal of CIRP Under Section 12A; CoC Constitution Deferred for Two Weeks

The Delhi Bench of the National Company Law Appellate Tribunal (NCLAT), dismissed an appeal filed by Lal Chand Morani against an order of the Adjudicating Authority admitting a Section 7 insolvency application initiated by Kotak Mahindra Bank Limited and granted the Appellant liberty to file an application under Section 12A of the Insolvency and Bankruptcy Code (IBC) for withdrawal of the Corporate Insolvency Resolution Process (CIRP), provided such an application is submitted within two weeks.

The NCLAT bench comprising Justice Ashok Bhushan (Chairperson), Justice N Sesha Sayee (Member-Judicial), and Arun Baroka (Member-Technical),

relied on the Supreme Court’s decision in GLAS Trust Company LLC vs. BYJU Raveendran & Ors. in Civil Appeal No. 9986 of 2024, noted that if the suspended directors reach a settlement with the financial creditors, the appropriate course would be to file a Section 12A application before the Adjudicating Authority for withdrawal of the CIRP.

The Tribunal observed that there was no reason to keep the appeal pending and dismissed it, granting the Appellant two weeks to file the Section 12A application.

The Tribunal also directed that the Committee of Creditors (CoC) need not be constituted during this two-week period, provided the Section 12A application is filed within the stipulated time. If no such application is filed, the CIRP will proceed as per law.

NCLAT Sets Aside NCLT’s Order Allowing Time-Barred Claim in Voluntary Liquidation Process

The National Company Law Appellate Tribunal (NCLAT) has set aside an order of the Adjudicating Authority that had permitted a creditor to intervene in a concluded voluntary liquidation process, despite the claim being filed beyond the prescribed limitation period.

The NCLAT bench comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member), agreed with the appellant’s arguments. It ruled that even if the date of the 2016 email was considered for the purpose of limitation, the three-year period expired on 17 July 2019, while the intervention application was filed more than a month later, on 28 August 2019.

The Tribunal observed that the respondent had slept over its rights and failed to act during key stages, including when notices were issued under Section 8 of the Code, when the public announcement for claims was made, and even during the initial round of liquidation compliance.

Holding that the NCLT erred in reopening a concluded process based on a time-barred claim, the NCLAT allowed the appeal and set aside the impugned order, noting that permitting such interventions at a terminal stage would undermine the objectives of a time-bound, creditor-driven voluntary liquidation framework under IBC.

Judicial Delays Justified: NCLAT Allows UCO Bank’s CIRP Extension Plea

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has granted a 30-day extension and allowed the exclusion of 148 days from the Corporate Insolvency Resolution Process (CIRP) timeline in the matter of Shri Ram Switchgears Ltd., setting aside an earlier rejection by the adjudicating authority.

The NCLAT bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), found merit in the appellant’s submission. The Bench observed that while the Supreme Court has held in Essar Steel India Ltd. v. Satish Kumar Gupta that extension beyond 330 days is to be exercised cautiously, the facts of the present case justified the exception.

The Tribunal noted that even the NCLT, in its own order, acknowledged that the delay of 148 days was due to judicial pendency and the inaction of the previous IRP. The appellate bench emphasized that “only the voting on the plan is still to be completed,” and resolution was very much in sight.

The bench stated that the object of the CIRP is to achieve resolution and not to let the process fail on technicalities when revival is within reach.

NCLAT Refuses to Interfere in Liquidation Process, Dismisses Suspended Director’s Appeal

The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal filed by Mr. Rakesh Verma, the suspended director of a company under liquidation, reaffirming that once a company enters the liquidation stage under the Insolvency and Bankruptcy Code (IBC), individual objections from suspended directors, especially those not rooted in legal merit, cannot delay or derail the process.

The NCLAT held that there was no procedural irregularity or violation of natural justice that would justify interference. It said that Mr. Verma, as a suspended director, no longer had the right to manage or represent the company and could not use the appellate process to delay liquidation, especially when no CoC-approved resolution plan was in place.

The two-member bench of the National Company Law Appellate Tribunal comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Inderdev Pandey (Technical Member) also reaffirmed that the liquidator, being a professional appointed under the Code, is expected to carry out their duties in line with the IBBI regulations and subject to the oversight of the Adjudicating Authority.

No Finality on Liquidator Removal Until Voting Rights Issue Settled: NCLAT

The National Company Law Appellate Tribunal (NCLAT) in a recent case, has refused to grant immediate relief to Edelweiss Asset Reconstruction Company Ltd. in its bid to remove the liquidator of Tecpro Systems Ltd., directing the matter back to the adjudicating authority for final decision.

The Tribunal ordered that the results of the SCC meeting be kept in a sealed cover, without being disclosed or acted upon, and clarified that no final decision or implementation should take place until the NCLT decides both pending applications.

The Appellate Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), emphasized that both applications need to be decided by the Adjudicating Authority, and the outcome of the meeting, if any, can be implemented only after such decision. The appellate tribunal Directed the NCLT to dispose of the matter on the next date or at the earliest.

NCLAT Directs GST Department to Decide on Disposal of Seized Cigarette Stock in Liquidation Case

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, recently directed the Central GST & Central Excise Department to promptly decide on a representation made by the liquidator of a company seeking relief regarding seized goods lying in a rented warehouse.

The Bench comprising Justice Ashok Bhushan (Chairperson) and Technical Member Barun Mitra took a balanced view of the situation. The Tribunal did not interfere with the NCLT’s liberty order but acknowledged the urgency and financial burden being placed on the liquidator.

It ruled that the liquidator is free to file a fresh and detailed representation to the concerned GST department, attaching a copy of the NCLT’s April order, and that such representation must be considered within three months of receipt.

The NCLAT added that since the issue is administrative and does not involve any legal bar on disposal, the concerned GST officer is expected to act promptly and fairly, ensuring that the liquidation process is not stalled or derailed by avoidable bureaucratic delay.

NCLAT Closes CIRP in Rare Court-Monitored Insolvency, After Flat Possession Given to Allottees

The National Company Law Appellate Tribunal (NCLAT) has formally closed the Corporate Insolvency Resolution Process (CIRP) of Grand Reality Pvt. Ltd., after confirming that the construction of the real estate project was completed and possession handed over to all homebuyers. The case reflects a rare but growing judicial trend where tribunals step in to ensure practical resolution for stakeholders, especially homebuyers, through a “reverse CIRP” model.

The NCLAT in an order, allowed the intervention in the larger interest of homebuyers. It directed that the developer be permitted to proceed with the construction under court supervision, a model that has come to be termed as a “court-monitored” or “reverse CIRP”, wherein instead of replacing the promoter, the court oversees the project’s completion in a structured and transparent manner.

The Bench comprising Justice Ashok Bhushan (Chairperson), Justice N. Seshasayee (Judicial Member), and Arun Baroka (Technical Member), relying on its past rulings in Sachin Malde v. Hemant Nanji Chheda and Gaurav Bhati v. Smriti Bhatia, reiterated that where claims have been settled and no further creditors exist, CIRP can be closed without requiring a formal Section 12A withdrawal.

NCLAT Clears ICICI Bank of Wrongdoing: Reverses NCLT Order Directing Refund of Loan Payment Received During Moratorium

The National Company Law Appellate Tribunal (NCLAT) has set aside an NCLT order that had directed ICICI Bank to return ₹8.92 lakh received in a loan account after commencement of CIRP. The Tribunal ruled that since the payment was not made by the corporate debtor but by an individual co-applicant, the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, was not attracted.

The NCLAT Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), closely examined the transaction trail. It concluded that the payment was made by a third party from an unrelated account, and not from the assets of the corporate debtor. Therefore, no violation of the moratorium existed.

The Tribunal also ruled that the NCLT erred in labeling the transaction as a preferential one, noting that Section 43 applies only when the corporate debtor itself gives preference to certain creditors over others. In this case, since the money was paid by someone else, no such preference by the debtor occurred.

NCLAT Rejects Suspended Director’s Challenge to CIRP, Asserts Timely Resolution over Procedural Technicalities

The National Company Law Appellate Tribunal (NCLAT) recently dismissed an appeal filed by a suspended director who challenged the initiation of the Corporate Insolvency Resolution Process (CIRP) on grounds of procedural impropriety and alleged suppression of facts.

The NCLAT Bench comprising Justice Ashok Bhushan (Chairperson), Justice N. Seshasayee (Judicial Member), and Arun Baroka (Technical Member) found no merit in the appeal.

The Tribunal observed that the Financial Creditor had clearly established disbursement of funds, which were routed through the Corporate Debtor's bank account, and that entries in the books of accounts confirmed the receipt. It held that mere intercompany transactions or subsequent use of funds does not erase the liability or alter the legal character of the debt.

The Bench asserted that the IBC is not a forum to delve deep into complex money trails or test the purity of the transaction when the existence of a default is undisputed and documentation is sufficient.

The NCLAT also rejected the argument on non-service of notice, pointing out that the Corporate Debtor had adequate opportunity to respond and had, in fact, participated in the proceedings before the NCLT.

Liquidator Can Recover Possession: NCLAT Dismisses Appellant’s Plea for Small Cause Court Jurisdiction

The NCLAT Principal Bench of the National Company Law Appellate Tribunal (NCLAT) held that the liquidator is entitled to recover possession of the property and dismissed the appellant’s plea that only the Small Cause Court had jurisdiction in the matter.

The bench comprising Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Member Technical), and Indevar Pandey (Technical Member), relied on the judgement of the NCLAT, which was upheld by the apex court in the case of Encore Asset Reconstruction Company Pvt. Ltd. vs. Ms. Charu Sandeep Desai (RP of Calyx Chemicals & Pharmaceuticals Ltd.) & Ors, in which the tribunal held that if an asset owned by the corporate debtor is in the possession of a third party or creditor, such party is obligated to hand over possession to the resolution professional under Section 18 of the Code, so long as the title remains with the corporate debtor.

The bench found no merit in the argument of the appellant that the adjudicating authority erred in passing the impugned order or that it is only a small cause court that is competent to adjudicate such matters.

Proceedings u/s 7 of IBC not valid when Financial Creditor already Received Pending Amount: NCLAT

In a recent case, the bench of the National Company Law Appellate Tribunal (NCLAT)has held that proceedings initiated under section 7 of the Insolvency Bankruptcy Code (IBC), 2016 is not valid when the Financial Creditor already received the Pending Amount.

It is submitted that the appellant had offered before the adjudicating authority which was not accepted, however, they are ready to pay the entire amount by bank draft or by R.T.G.S to the operational creditor within a week.

When the Appellant has already offered the entire amount claimed in Part IV, which was refused to be accepted by the Financial Creditor before the Adjudicating Authority, which during pendency of the appeal has already been accepted, and the Financial Creditor has received a total amount of Rs.26,200,000/-, the two-member bench comprising Chairperson Justice Ashok Bhushan and Barun Mitra, Member (Technical) observed that present is not a case for initiating Section 7 proceeding against the Corporate Debtor.

NCLAT Dismisses Insolvency Plea Over Export Dispute: Cites Pre-Existing Contractual Issues

The National Company Law Appellate Tribunal (NCLAT) has upheld the National Company Law Tribunal’s (NCLT) decision dismissing an insolvency application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) by Morex Corporation Limited against Jindal Poly Films Ltd. The appellate tribunal found the existence of a genuine pre-existing dispute between the parties regarding an aborted export transaction during the COVID-19 lockdown period.

The bench comprising Justice Ashok Bhushan (Chairperson) and Member (Technical) Barun Mitra, noted that all that is required to be seen is whether the defense taken by the Corporate Debtor raises a dispute which needs further adjudication by the competent court. Given the communications and the government’s ban order, the Adjudicating Authority has not committed any error in holding the contract termination to be a pre-existing dispute.

The Tribunal ruled that since Jindal Poly Films was a solvent company and the disagreement stemmed from a commercial dispute over contract performance, insolvency proceedings were unwarranted.

NCLAT Rejects Impleadment Pleas in ₹1300 Crore CIRP Cost Dispute Post Resolution Plan Approval

The National Company Law Appellate Tribunal (NCLAT), Principal Bench in New Delhi, has dismissed a plea filed by the SREI Multiple Asset Investment Trust (SMAIT), which sought to be impleaded in an ongoing insolvency appeal tied to a hefty ₹1300 crore CorporateInsolvency Resolution Process (CIRP) cost dispute. The Trust, which claimed to have held a 69.80% equity stake in Odisha Slurry Pipeline Infrastructure Ltd. (OSPIL) before it went into insolvency, had filed Interlocutory Application No. 705 of 2022, arguing that it should be heard in the matter.

the Tribunal ruled that SMAIT did not meet the threshold to be considered a necessary or proper party to the appeal. The Bench noted that the Trust had no direct legal interest in the outcome and was merely attempting to re-enter a dispute that had already been conclusively resolved.

The Tribunal bench comprising Justice Ashok Bhushan (Chairman) and Braun Mitra (Technical Member) pointed out that once a resolution plan is approved by the Adjudicating Authority and confirmed by the Supreme Court, it becomes binding on all stakeholders. That includes former shareholders, whose rights are extinguished unless the plan explicitly preserves them. In SMAIT’s case, the resolution plan for OSPIL made no such exception.

NCLAT Rejects Repeat Insolvency Filing: Cites Limitation Bar and Res Judicata

The National Company Law Appellate Tribunal (NCLAT) has upheld the dismissal of a personal insolvency application filed under Section 94 of the Insolvency and Bankruptcy Code, 2016, reiterating that once an application has been rejected on merits, refiling the same matter under the name of correcting typographical errors is impermissible.

The Adjudicating Authority had clearly recorded that the contradictions in the default dates and the failure to produce relevant documents, including the guarantee deed or the original demand notices, rendered the application both barred by limitation and factually inconsistent.

The Appellate Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member – Technical), concluded that when the earlier application was dismissed on merits... it was not open for the appellant to file a fresh application under Section 94. Correction of any typographical error... is inconsequential.

Logistical and Financial Difficulties Not Enough to Excuse 172-Day Delay in Refiling: NCLAT

The Bench of the National Company Law Appellate Tribunal (NCLAT) ruled that logistical and financial difficulties are not enough to excuse a 172-day delay in refiling an appeal.

The two-member bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) examined the records and heard the appellant’s counsel. The tribunal observed that defects in the appeal and interim applications had been pointed out by the Registry, and under NCLAT Rules, these defects should have been cured within seven days. Instead, they were cured after 172 days.

The tribunal ruled that the delay did not arise from circumstances beyond the appellant’s control but instead showed signs of disinterest, negligence, and lack of diligence. It stated that the Insolvency and Bankruptcy Code aims to ensure the timely resolution of cases, and permitting such a delay would undermine this objective.

Corporate Debtor Failed to Comply with One-Time Settlement Terms: NCLAT Greenlights CIRP Revival

The Principal Bench of the National Company Law Appellate Tribunal (NCLAT) recently dismissed an applicant’s challenge to the revival of its Corporate Insolvency Resolution Process (CIRP), noting that the Adjudicating Authority had rightly restored the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) after the corporate debtor failed to honor the terms of a One-Time Settlement (OTS) that it had accepted.

The appeal filed by Bagh Bahar Appliances Pvt. Ltd. arose from an order passed by the National Company Law Appellate Tribunal (NCLT) in an Interim Application filed by the financial creditor and respondent herein - Unity Small Finance Bank Ltd., seeking revival of CIRP citing breach of settlement terms.

The Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member - Technical) noted that the adjudicating authority had allowed the restoration of the company petition due to the corporate debtor’s failure to comply with the settlement terms and that there exists no provisions to carry forward the CIRP process from its termination due to settlement between the parties; in such event the matter would have to be taken up afresh.

Corporate Guarantee Invoked Not Protected u/s.10A IBC After Stipulated Period: NCLAT Dismisses Appeal in ₹104 Cr HDFC Bank Loan Dispute

The Principal Bench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi recently dismissed an appeal, noting that a corporate guarantee invoked outside the stipulated suspension period under Section 10A of the Insolvency and Bankruptcy Code, 2016 (IBC) was not barred by the limits of Section 10A.

The present appeal stems from an order dated 30 November 2023 by which the Adjudicating Authority admitted HDFC Bank’s application against the corporate debtor and appointed Umesh Gupta as Interim Resolution Professional (IRP).

The Bench comprising Justice Rakesh Kumar Jain (Member - Judicial), Justice Mohammad Faiz Alam Khan (Member - Judicial) and Naresh Salecha (Member - Technical) examined the notices dated 28.07.2020 and 01.08.2020, but noted that the language used in them did not indicate that they were final in nature, rather the final notice was issued by the bank on 11 June, 2022.

The Bench also referred to the decision in Harish Raghavij Patel (supra) to note that the actual default in this case rose from the June 2022 notice, which lay outside the stipulated period under Section 10A and thus was not statutorily barred.

SRA could not be saddled with any claim that was not part of Resolution Plan: NCLAT Dismisses Appeal of EPFO

In a recent case, the New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) dismissed the appeal of the Employees Provident Fund Organisation (EPFO), holding that the Successful Resolution Applicant(SRA) could not be saddled with any claim that was not part of the Resolution Plan.

Employees Provident Fund Organisation (EPFO), the applicant prayed for condonation of appeal of 14 days in filing the appeal. Counsel for the Appellant submitted that the certified copy of the order was applied on 20.03.2025 and it was ready on 25.03.2025. It is submitted that 6 days’ time needs to be excluded, hence, the delay is only 8 days. It is submitted that the Appellant is EPFO organisation and appeal was to be filed at Delhi.

Applicant and the bench comprising Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) observed by the Adjudicating Authority that the Applicant is at liberty to approach the forum against the Recovery Certificate dated 05.04.2022.

NCLT Order Lacked Reasons or Analysis Despite ‘Analysis and Findings’ Heading: NCLAT Sets Aside Order

The National Company Law Appellate Tribunal (NCLAT) set aside an order of the National Company Law Tribunal (NCLT), Kolkata Bench, which had appointed an independent scrutinizer to examine the results of the 2024-25 elections of the Calcutta Cricket & Football Club.

The appellate tribunal found that the NCLT’s order lacked judicial reasoning and had been passed in breach of the principles of natural justice and Rule 37 of the NCLT Rules, 2016.

The bench comprising Justice Rakesh Kumar, Member (Judicial), and Dr. Alok Srivastava, Member (Technical), observed that the NCLT order did not contain any independent findings or reasoning, and that recording only the applicant’s “reasons to believe” was not a substitute for judicial analysis. It further observed that granting time to reply but reserving orders the same day was contrary to Rule 37 and denied the appellant a meaningful opportunity to be heard.

Plan Invocation cannot be directed after CoC agrees to release personal guarantees upon Payment: NCLAT

Mukesh Goel vs Santanu Brahma

CITATION : 2025 TAXSCAN (NCLAT) 294

The New Delhi bench of the National Company Law Appellate Tribunal(NCLAT) has held that if CoC has itself agreed to release the personal guarantees upon completion of payment under the Resolution Plan,incocation of such guarantees cannot be directed.

It is submitted that the resolution plan has been approved by the 100% CoC. The observations made in paragraphs- 28 & 39 are contrary to the terms of the plan and unsustainable.

A two-member bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member - Technical) held that when the CoC itself has agreed to release the personal guarantees after receiving the payment under the plan, the invocation of personal guarantee does not arise. We thus are satisfied that observations need to be deleted from the impugned order.

No concept of “provisional constitution” of CoC under IBC: NCLAT Dismisses Byju's Plea

The National Company Law Appellate Tribunal (NCLAT) Chennai bench has held that a Resolution Professional has no adjudicatory power under the Insolvency and Bankruptcy Code, 2016 (“IBC”). Further held that there is no concept of 'provisional constitution' of the CoC under the Code, and once constituted, it is final unless modified by the Adjudicating Authority.

On the basis of the collation of the claims submitted by Respondent No. 1 and 3 had duly constituted the CoC on 21.08.2024 and even filed an application in terms of Regulation 17 of the Regulations but later on, for the reason best known to him, reconstituted the CoC with only one member with 0.18% voting share in the originally constituted CoC, by excluding Respondent No. 1 and 3 in a manner that can only be termed mischievous which has been duly commented upon by the Tribunal in para 21 to 23 of the impugned order.

The bench comprising Justice Rakesh Kumar Jain, Member (Judicial) and Jatindranath Swain, Member (Technical) viewed that there is no concept of “provisional constitution” of the CoC under the Code. The CoC once constituted is final and cannot be revised by the IRP/RP without the interference of the Adjudication Authority.