The tribunal explained that for the purpose of Section 60(2) of the Insolvency and Bankruptcy Code, 2016, pendency begins from the date of filing of the petition and not from the date of admission.

The two-member bench comprising Justice M. Venugopal (Judicial Member) and Shreesha Merla (Technical Member) observed that the object of Section 60(2) is to ensure consolidation of proceedings against the borrower and guarantor before one tribunal. It explained that pendency commences with filing, and waiting for admission to determine pendency would defeat the purpose of the provision.

The tribunal also observed that Tuscan had participated in proceedings and could not re-agitate jurisdictional objections in the appeal.

Company Appeal at Behest of Shareholder not Maintainable: NCLAT

The Chennai bench of the National Company Law Appellate Tribunal(NCLAT) the company appealed at the behest of the shareholder would not be maintainable.

Park Energy Private Limited, the appellant challenged the impugned order of 18.10.2022, that was passed by the NCLT, Chennai bench, in CP(IB) No. 106(CHE)/2021, consequent to which, the application filed under Section 7 of the I & B Code, 2016, by the Financial Creditor State Bank of India was admitted and the Corporate Debtor, Bhadreshwar Vidhyut Private Limited, was directed to be admitted to CIRP proceedings, subject to the terms and conditions as it has been given in the impugned order under challenge.

The tribunal comprising Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain, Member (Technical) observed that, the company appeal at the behest of the shareholder would not be maintainable.

90-Day Time Limit under Regulation 2B for Completing Section 230 Scheme of Arrangement is Directory: NCLAT grants 90 More Days

The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) ruled that the 90-day time limit under Regulation 2B of the IBBI (Liquidation Process) Regulations, 2016 for completing a scheme of arrangement under Section 230 of the Companies Act, 2013 is directory in nature and not mandatory, and granted additional time for completion of the scheme proposed for revival of Sarda Agro Oils Ltd.

The two-member bench comprising Justice M. Venugopal (Judicial Member) and Ms. S. Rajeswari (Technical Member) observed that Regulation 2B prescribes timelines but they are meant to be directory and not mandatory.

The tribunal observed that both the Supreme Court and NCLAT had, in earlier judgments, explained that revival through a scheme of arrangement should be given preference over liquidation, since liquidation results in the corporate death of the company.

It further pointed out that Section 230 of the Companies Act itself does not provide any outer time limit for a scheme of compromise or arrangement, and a subordinate regulation cannot impose an absolute bar.

Delay in Obtaining Documents Not Sufficient Reason: NCLAT Refuses to Condone 248 days Delay in Recall Plea

The Chennai Bench of the National Company Law Appellate Tribunal (NCLAT) refused to condone a delay of 248 days in filing a recall application by Mr. Raju Rangadhamaiah and his wife, Smt. M. Jagadamba, after observing that the explanation of delay in obtaining documents was not a sufficient reason.

The two-member bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) examined the applications. The tribunal observed that the withdrawal order of 01.02.2023 was passed on the appellants’ own request and did not suffer from any error that could justify recall.

The tribunal pointed out that the reason given for the delay was not acceptable since the appellants were already pursuing the matter and could not justify nearly eight months of delay merely on the ground of collecting documents.

Application u/s 95 of IBC Filed after Expiry of 3 years Barred by Limitation: NCLAT Dismisses Appeal of IDBI Bank

The New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) held that application under section 95 of the Insolvency and Bankruptcy Code (IBC), 2016, filed after the expiry of 3 years is barred by limitation and dismissed the appeal of IDBI Bank.

The Supreme Court in the above case which relied on the appellant relying on the earlier judgment in the matter of ‘Kotak Mahindra Bank Ltd.’held that limitation for filing Section 7 application is only 3 years as per Article 137. The Tribunal viewed that submission of the appellant relying on the above judgment that the Supreme Court held that limitation will be 12 years with respect to a decree is wholly incorrect and is not borne out from the judgment.

The appellant submission that for filing an application under IBC 12 years limitation will apply’ was rejected by the bench . The two-member bench comprising Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) while dismissing the appeal upheld the ruling of the adjudicating authority in the impugned order that Section 95 application filed by the IDBI Bank was filed after expiry of three years period of limitation.

NCLAT allows 45 days extension to complete CIRP as a Final Extension

The bench of the National Company Law Appellate Tribunal (NCLAT) allowed a 45 days extension to complete the Corporate Insolvency Resolution Process (CIRP). The extension was to receive the final plans and complete the voting therein.

The adjudicating authority has taken the view that there are no exceptional circumstances to allow the period of 90 days as prayed for. Adjudicating authority itself has noticed the judgment of the Supreme Court in ‘CoC of Essar Steel India Ltd.’ Vs. ‘Satish Kumar Gupta & Ors.’ reported in [(2020) ] that the period prescribed under 12 is not mandatory and the Court retains jurisdiction to extend if there are exceptional circumstances justifying the extension.

It was evident that in the present case the period of 465 days including 135 days extension is already over and the period was extended by adjudicating authority till 18.04.2025 in the CIRP. Counsel for the appellant has filed an affidavit where now only request as a last extension is of 45 days to receive the final plans and complete the voting therein.

The Tribunal viewed that insofar as the order of the adjudicating authority refusing extension of 90 days that does not warrant any interference however looking to the fact that 6 resolution applicants are already there which might lead to resolution of the corporate debtor and in the affidavit filed on behalf of the CoC now prayer is of 45 days as a final extension after which no prayer be entertained for any extension in the CIRP period.

The bench comprising Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) allowed 45 days extension from today during which period, the CIRP be completed and resolution plan, if any, approved by the CoC be placed before the adjudicating authority by filing an application.

Vacating Process of Land Delayed due to Monsoon Season being a hindrance to remove Glass Items: NCLAT Grants Time till Sep 15

The bench of the National Company Law Appellate Tribunal (NCLAT) has granted time to the lessee till September 15 of 2025 to vacate the premises on finding that the vacating process got delayed due to the monsoon season, which hindered the removal of items consisting of glass.

It was evident that the appellants had to remove the material lying in the demolished premises, which is enormous as appears from the photograph attached, coupled with the fact that it consists of glass which has to be carefully removed and the fact that the monsoon season is still going on.

The quorum comprising Justice Rakesh Kumar Jain, Member (Judicial), Justice Mohammad Faiz Alam Khan, Member (Judicial) and Naresh Salecha, Member (Technical) grants time till 15.09.2025 to both the appellants to vacate the premises in question.

Application u/s 9 of IBC against Appointment of IRP: NCLAT remands Matter for Reconsideration

The bench of the National Company Law Appellate Tribunal ( NCLAT ) remanded the application filed under section 9 of the Insolvency Bankruptcy Code (IBC) for the resolution of its debt against the Corporate Debtor has been admitted, and appointment of the Interim Resolution Professional (IRP).

The Tribunal set aside the order and remanded the matter back to the Tribunal to have a relook into the entire matter after considering all the documents on record and by-passing a speaking order.

The bench comprising Justice Rakesh Kumar Jain, Member (Judicial), Justice Mohammad Faiz Alam Khan, Member (Judicial) and Mr. Naresh Salecha, Member (Technical) viewed that there is an error in the impugned order of not considering not only the letter dated 28.08.2022 but also the letters dated 18.08.2022, 09.09.2022 and 09.12.2022 which are the basis for the letter written by the CD on 28.08.2022 in which the CD had raised the issue regarding the goods supplied to the hospital by the OC and which was pointed out repeatedly by Government vide their letter dated 18.08.2022, 09.09.2022 and 09.12.2022.

The Tribunal set aside the order and remanded the matter back to the Tribunal to have a relook into the entire matter after considering all the documents on record and by-passing a speaking order.

EPFO’s claim based on Inspection During CIRP is Not enforceable: NCLAT

In a recent case, the bench of the National Company Law Appellate Tribunal (NCLAT) has held that the claims of the EPFO based on inspection conducted subsequent to initiation of the CorporateInsolvency Resolution Process (CIRP) are unenforceable and cannot be admitted.

The bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member)observed that after initiation of the CIRP, no assessment can be initiated or continued against the Corporate Debtor so as to pass any pecuniary liability on the Corporate Debtor.

The EPFO has made the demand on the basis of an alleged inspection report dated 10.05.2023 and assessment order dated 25.09.2023 which both were subsequent to initiation of CIRP on 17.02.2023.

In view of the law as laid down by this Tribunal, Resolution Professional has made out a case for issuing a direction that the said demand was unenforceable which arose on the basis of assessment made during the Moratorium. The tribunal allowed the appeal of the RP and the impugned order was set aside.

Limitation Period can be reset When Pleadings regarding Part Payments supported by Written Acknowledgment: NCLAT

The bench of the National Company Law Appellate Tribunal (NCLAT) has held that when there are specific pleadings under Section 9 of the IBC regarding part payments made by the Corporate Debtor which supported by a written acknowledgment to the demand notice, the limitation period can be reset in terms of Section 19 of the Limitation Act.

The Adjudicating Authority in the impugned order rejected the submissions of the CD that there is no operational debt or default on the part of the CD. The ground raised by the CD that application is barred by time, having been filed three years’ after the amount became due on 31.01.2017 and 02.02.2017 and the application having been filed on 12.07.2022, the submission on the ground raised by the CD on limitation was not accepted by the Adjudicating Authority and it was held that application is not barred by time.

The Tribunal noted that it is an admitted case of the Appellant that part payments were made on 15.05.2017 and 26.09.2017. Further, it is even in the reply to the demand notice, as noted above the Appellant has made a submission that amount was paid to the SBI. When the amount is directly paid to the creditor and there is acknowledgement in writing the conditions as provided in Section 19 are fulfilled.

It was observed that there are specific pleadings under section 9 of the IBC with respect to two part payments which is further supported by a written acknowledgement of the corporate debtor in reply to the demand notice. Thus, the requirements under section 19 of the Limitation Act are satisfied in this case.

The bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that the application under Section 9 filed claiming principal amount of Rs. 16,77,17,132.21/- was well within time. The Adjudicating Authority has rightly taken the view that application filed under Section 9 was not barred by limitation.

EPFO Dues from Post-Liquidation Assessments Not Admissible: NCLAT

The National Company Law Appellate Tribunal (NCLAT), has held that the EPFO dues from the post-liquidation assessment under section 7A of the EPF Act are not admissible. It was viewed that non-admission of the claim of the Appellant in liquidation proceeding shall not preclude it from taking such steps as available in law for realisation of its claim which arose after liquidation commencement date.

The Adjudicating Authority however, in the impugned order has observed that the Resolution Professional has to keep track of the Appeal filed by the Corporate Debtor and make necessary arrangements contingent upon the decision of the Appeal.

The NCLAT observed that Regulation 16(2) of the IBBI Regulations, 2016, lays down that only those claims can be admitted that were existing at the time of the liquidation commencement date. However, the assessment of the EPFO claim was made after the liquidation; hence, the claims were not in existence at the time of liquidation and are therefore inadmissible.

The bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), observed that non-admission of the claim of the Appellant in liquidation proceeding shall not preclude it from taking such steps as available in law for realisation of its claim which arose after liquidation commencement date.

Petition u/s 7 of IBC cannot be barred merely because of pending consideration of OTS before Lenders: NCLAT

The National Company Law Appellate Tribunal (NCLAT) bench has held that the mere fact that a corporate debtor's One Time Settlement (OTS) proposal is under consideration by other lenders does not preclude the submission of an application under Section 7 of the IBC if it is approved by one consortium member subject to approval by all other members.

It was argued that the cancellation of the OTS by respondent number one is arbitrary and unlawful and without any reason, no default has occurred in the OTS on the part of the appellant.

The bench comprising Justice Rakesh Kumar Jain, Justice Mohd Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) observed that by any standards the decision of the consortium of banks to forward the OTS proposal submitted by the appellant to their higher authorities may not amount to acceptance of the same.

The Tribunal held that the statutory right of a financial creditor under section 7 of the IBC cannot be curtailed by mere inter-se agreement between the creditors as such agreements only regulate inter-se arrangements among lenders. A borrower cannot claim benefit of OTS as a matter of right.

NCLAT Allows IDBI Trusteeship to Initiate CIRP as there is Valid Authorization from Assignee of Debt

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has allowed IDBI Trusteeship to initiate Corporate Insolvency Resolution Process (“CIRP”) as there is a valid authorization from the assignee of the Debt.

The Adjudicating Authority admitted Section 7 application against the Corporate Guarantor. The Adjudicating Authority also in the impugned order noticed that by order dated 09.01.2024, both the Principal Borrowers have already been admitted into CIRP. Challenging the order dated 17.12.2024 this Appeal has been filed.

The bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical) held that authorisation has been pleaded and proved,thus, do not find any error in the order admitting Section 7 application against the Corporate Guarantors.

Initiation of the CIRP against the Principal Borrowers has already been affirmed by the Tribunal by dismissing the Appeal(s) filed by the Suspended. No infirmity can be found in initiation of CIRP against the Corporate Guarantors and dismissed the Appeal.

Termination of Concession Agreement does not Discharge Corporate Debtor's Obligation to Repay: NCLAT

In a recent case, the bench of the National Company Law Appellate Tribunal (NCLAT) has held that termination of a Concession Agreement does not discharge the Corporate Debtor's liability to repay when such termination has no relation to the default committed by the Corporate Debtor.

The Tribunal concluded that CD has not disputed the disbursal of the amount and the default in repayment. The CD had tried to shift its liability on the basis of provisions of CA and SA to GoM and came to a firm conclusion that once the debt and default has been proved and also admitted by the CD in its revival letter, the petition under Section 7 has to be admitted in terms of the decision of the Supreme Court in the case of Innoventive Industries Ltd. Vs. ICICI Bank & Ors., 2018 1 SCC 407.

A division bench comprising Justice Rakesh Kumar Jain and Mr. Naresh Salecha (Technical Member) observed that the argument of the Appellant that the termination of CA has resulted into shifting of liability upon the GoM, the same cannot be made the basis for dismissing the application because the liability was enjoined upon the CD to make the payment to the FC.

NCLT cannot Approve Resolution Plan in absence of proof of Leasehold Rights over Primary Assets: NCLAT

The New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) held that National Company Law tribunal (NCLT) cannot approve resolution plan in absence of proof of leasehold rights over primary assets and upheld the order which refused to sanction a resolution plan wherein a disputed parcel of land was the primary asset.

The two-member bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) observed that while it is true that the NCLT cannot decide the allegations of fraud and forgery under the IBC, it can determine whether a particular asset forms part of the estate of the corporate debtor or not under the CIRP.

Further noted that since BSIDC became the owner of the said land only in 2009, its authority to lease the land in 2007 was doubtful. No evidence was produced to demonstrate that consideration to the tune of Rs. 16 crores was paid. Additionally, no proof of annual lease rent as recited in the deed was furnished.

RP have right to Terminate Leave & Licence Agreements in Absence of RERA Proceedings: NCLAT

The bench of the National Company Law Appellate Tribunal ( NCLAT ) has held that the Resolution Professional (RP) has the right to terminate the leave and license agreement in the absence of RERA proceedings.

The bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical) viewed that the mere fact that appellant was ready to pay the licence fee for the period for which leave and licence agreement was granted cannot preclude the RP to exercise his right under clause 10 and 19 to terminate the Leave and licence agreement in appropriate case.

It was evident that a valid reason was given by the RP for issuing notice for termination. The tribunal held that the adjudicating authority did not commit any error in directing vacation of the appellant and upheld the decision of the adjudicating authority.

Insolvency Proceedings can be restored Despite absence of Revival Clause in Settlement Agreement: NCLAT

The New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that the Insolvency Proceedings can be restored despite absence of revival Clause in Settlement Agreement

The bench comprising Justice Rakesh Kumar Jain (Member-Judicial), Justice Mohammad Faiz Alam Khan (Member-Judicial), and Indevar Pandey (Member-Technical), observed that the Tribunal has committed a patent error in dismissing the application of the appellant for restoration of the main petition on the ground that there was no clause in the MoU for revival of the application in case there is a breach of terms and conditions of the MoU by the Respondent.

The Tribunal itself had earlier passed an order on 16.02.2021 and the Respondent cannot be allowed to blow hot and cold in the same breath because the Respondent for avoiding the admission of the application filed under Section 9 by which it could have slipped into CIRP entered into MoU and agreed to pay the entire debt of the appellant but later on stopped making the payment which gave a cause of action to the appellant for revival of the application.

Condonation of 17-Day Delay Exceeds 15-Day Limit u/s 61(2) of IBC: NCLAT Rejects Appeal

The Bench National Company LawAppellate Tribunal ( NCLAT ) rejected the appeal as the 17-day delay in filing exceeded the 15-day limit under Section 61(2) of the Insolvency and Bankruptcy Code, 2016.

The two-member bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) noted that the impugned order had been pronounced in open court, making the date of uploading irrelevant for limitation purposes. The appellant was allowed a two-day exclusion while the certified copy was being prepared.

Since the order was passed on 21.04.2025, the 30-day period expired on 21.05.2025, and the 15-day period thereafter ended on 05.06.2025. With the two-day benefit, the appeal should have been filed by 07.06.2025. As it was filed on 09.06.2025, there was a delay of 17 days, exceeding the permissible limit.

The tribunal concluded that its power to condone delay under Section 61(2) proviso was limited to 15 days and could not cover the 17-day delay. The application for condonation was rejected, and the memo of appeal was also rejected.

NCLAT Permits Major Shareholders to Buy Company Property as Directors Breached Interim Order Restraining Sale of Immovable Asset

TheBench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi bench recently upheld an order passed by the National Company Law Tribunal (NCLT), permitting majority shareholders of a company that was facing proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI), to purchase the sole immovable property owned by the company upon noting that the directors had breached an interim order restraining alienation of the asset.

The NCLT decision was appealed by Ashok Kumar Jain before the NCLAT. Mohit Chaudhary and Raghav Dikshit, appearing for the appellant submitted that the Applicant has taken steps and negotiated with the prospective buyer of the property in question despite giving an undertaking and that the prospective purchaser, Hotage India, had already paid an amount of ₹7 Crores to the Bank.

A bench comprising Justice Yogesh Khanna - Member (Judicial) and Ajai Das Mehrotra - Member (Technical) held that the appellant’s actions were contrary to his undertaking and detrimental to the interests of the company. The appellate tribunal emphasized that the prospective purchaser had no vested right in the property since no NCLT approval was obtained as required under the OTS sanction letter.

NCLAT Holds ICBC Cannot Retain ₹27.60 Crore FD as Reliance Owed No Dues, Lien Letter Limited to Debtor’s Own Liabilities

The National Company Law Appellate Tribunal (NCLAT) held that the Industrial and Commercial Bank of China Limited (ICBC) was not entitled to retain a fixed deposit of Rs. 27.60 crore belonging to Reliance Communication Infrastructure Limited (RCIL), as no dues were owed by the corporate debtor and the lien letter did not extend to the liabilities of other group companies.

The bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra, and Arun Baroka (Technical Members) observed that the wording of the lien letter referred only to “us,” which clearly meant RCIL. The tribunal explained that the lien could apply only to dues owed by RCIL and not to debts of any other group company.

It observed that RCIL had never availed any credit facility from ICBC and was not jointly liable with any other entity. The bench pointed out that under Section 171 of the Contract Act, a general lien can only be exercised for the customer’s own debts, and not for those of third parties.

The tribunal upheld the NCLT’s order directing the release of the fixed deposit with interest, holding that ICBC could not retain the amount as RCIL owed no dues to it.

Commercial Litigant Cannot Shift Blame to Counsel for Repeated Non-Appearance in Restoration Applications: NCLAT

The bench of the National Company Law Appellate Tribunal (NCLAT) has held that a commercial litigant cannot evade the consequences of repeated non-appearance and negligence in prosecuting proceedings by shifting blame to counsel, and the Adjudicating Authority is justified in dismissing restoration applications under Rule 48 of the NCLT Rules, 2016 when the litigant demonstrates persistent lack of diligence.

The Adjudicating Authority (NCLT Mumbai) dismissed both applications on 29.01.2025, citing the appellant’s gross negligence and lack of bona fide intent. Aggrieved, the appellant appealed under Section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC).

The NCLAT bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) observed that the appellant, as a commercial entity, failed to demonstrate due diligence. The Tribunal noted that the Section 9 application was dismissed after the appellant’s counsel remained absent despite prior notice of hearings. The first RA was also dismissed for non-appearance, and the second RA was filed after a 160-day delay without sufficient cause.

The NCLAT held that Rule 48 of the NCLT Rules, 2016 requires restoration applications to be filed within 30 days with sufficient cause for non-appearance, which the appellant failed to establish. The Tribunal distinguished the cited Supreme Court precedents, noting they applied to illiterate or remote litigants, not commercial entities aware of legal processes. The NCLAT affirmed that the Adjudicating Authority correctly dismissed the applications, as the appellant’s conduct demonstrated a deliberate pattern of negligence rather than inadvertent error.

Alleged Bias by Technical Member Not Proven: NCLAT declines to recall Dismissal Order

The bench of the National Company Law Appellate Tribunal (NCLAT) dismissed an application filed by Entegra Ltd., Appellant under Rule 11 of the NCLAT Rules, 2016, seeking recall of its order.

It was observed that a belated plea alleging bias against a Technical Member, based on his prior position as a nominee director of a lender institution, constitutes an abuse of process. and is not entertainable when raised after the dismissal of the statutory appeal before the Supreme Court.

The NCLAT had dismissed the Appellant’s appeal on 26.11.2024, which was further challenged before the Supreme Court. The Supreme Court appeal (Diary No. 2109/2025) was later dismissed on 25.04.2025 for non-compliance with a conditional order to cure defects.

The NCLAT bench comprising Justice Rakesh Kumar Jain, Mr. Barun Mitra, and Mr. Naresh Salecha (Technical Members), observed that the Appellant filed the recall application on 18.05.2025—after the Supreme Court dismissed its appeal—indicating it was a tactical afterthought.

The Tribunal noted the Appellant failed to explain why the bias issue was not raised earlier. The Pinochet precedent was inapplicable, as it involved direct personal interest (the judge’s wife’s role in a campaign against the litigant).

NCLT Barred from Adjudicating on Limitation in S. 95 Applications before Appointment of Resolution Professional: NCLAT allows appeal filed by Canara Bank

While allowing appeal filed by Canara Bank, the New Delhi bench of the National Company Law Appellate Tribunal (NCLAT) has held that the Adjudicating Authority, National Company Law Tribunal (NCLT) cannot perform judicial adjudication or dismiss applications under Section 95 of the Insolvency and Bankruptcy Code (IBC) on grounds of limitation at the initial stage before appointing a Resolution Professional (RP), as such premature adjudication violates the statutory scheme established by the Supreme Court in Dilip B Jiwrajka vs. Union of India.

The Supreme Court in the said ruling clarified that: “(i) The RP’s role under Section 97 is purely facilitative, involving fact-finding and submission of a recommendatory report under Section 99;

(ii) The Adjudicating Authority’s adjudicatory function commences only under Section 100 after receiving the RP’s report;

(iii) Preemptive adjudication of jurisdictional facts (including limitation) at the RP appointment stage would rewrite the statute and disrupt the statutory timeline.”

The NCLAT bench comprising Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan, and Mr. Naresh Salecha (Technical Member) observed that the NCLT’s dismissal of the Section 95 applications on limitation at the initial hearing stage was impermissible. The Tribunal emphasised that the Supreme Court’s judgment in Dilip B Jiwrajka unequivocally prohibits judicial adjudication before the RP’s appointment and report. The NCLT’s action short-circuited the statutory process under Sections 95–100 of the IBC.

The NCLAT held that the Adjudicating Authority is barred from adjudicating limitation (or any jurisdictional issue) until after the RP submits a report under Section 99. The appeals were accordingly allowed, the NCLT’s orders were set aside, and the Section 95 applications were restored.

NCLAT Upholds Rejection of Section 7 Application as Default Amount was Below ₹1 Crore, Sets Aside Penalty u/s 65

The National Company Law Appellate Tribunal (NCLAT) upheld the order of the Indore Bench of the National Company Law Tribunal (NCLT) rejecting a Section 7 application filed, after observing that the alleged default amount was below the statutory threshold of Rs. 1 crore under the Insolvency and Bankruptcy Code, 2016. The appellate tribunal set aside the penalty imposed under Section 65 of the Code.

The bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) observed that the NCLT had already recorded a finding that the corporate debtor had substantially repaid the claimed amount and that the remaining default was below Rs. 1 crore.

The appellate tribunal explained that under such circumstances, the NCLT was correct in rejecting the Section 7 application as the mandatory conditions of “debt” and “default” exceeding the statutory threshold were not met.

It was pointed out that there was no finding of any fraudulent or malicious intent on the part of the appellants to justify the imposition of a penalty under Section 65.

NCLAT Rules Monetisation of Unsold Units of Real Estate Project Impermissible without Revalidated Building Plan in Reverse CIRP

The National Company Law Appellate Tribunal (NCLAT) refused to allow the Interim Resolution Professional’s (IRP) request to monetise unsold units of the real estate project under a reverse Corporate Insolvency Resolution Process (CIRP), holding that such monetisation would not serve any purpose in the absence of a revalidated building plan.

The bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) observed that the building plan had not been revalidated, and a writ petition filed before the Allahabad High Court seeking revalidation had been dismissed.

The NCLAT explained that when construction could not commence due to lack of a valid plan, monetisation of unsold units would not achieve the stated objective of completing the project. It further observed that Noida’s conditional consent did not address the core issue of map revalidation.

Based on these findings, the NCLAT dismissed the IRP’s application seeking permission to monetise the unsold units. It also disposed of a related application by homebuyers after recording the IRP’s statement that no unit would be cancelled.

NCLAT Upholds CIRP Initiation by Central Bank Against Corporate Guarantor Despite Stamping and Novation Contentions, Dismisses Appeal of SEPL’s Ex Director

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has dismissed an appeal filed by Siddharth Satish Katariya, Ex-Director of Superfine Extrusions Private Limited (SEPL), challenging the initiation of Corporate Insolvency Resolution Process (CIRP)by Central Bank against the company, pointing to insufficient stamping.

The Tribunal upheld the order of the National Company Law Tribunal(NCLT) which had admitted a Section 7 application filed by Central Bank of India by holding that insufficiently stamped Deed of Guarantee is a curable defect and the onus to cure the same was on the Principal Borrower or the Corporate Guarantor as it was their obligation to pay the stamp duty.

A two-member bench comprising Justice Ashok Bhushan, Chairperson and Barun Mitra, Member (Technical) observed that insufficiently stamped Deed of Guarantee is a curable defect and the onus to cure the same was on the Principal Borrower or the Corporate Guarantor as it was their obligation to pay the stamp duty.

The Tribunal viewed that the core issues of debt and default were not contested by the appellant, and the technical objections raised could not defeat the substantive rights of the financial creditor to initiate insolvency proceedings.

NCLAT Confirms Bid-Rigging in UP Soil Testing Tenders, Upholds Penalties on Companies and Directors

The National Company Law Appellate Tribunal (NCLAT) has upheld the Competition Commission of India's (CCI) order finding several companies and their directors guilty of bid-rigging in soil testing tenders floated by the Uttar Pradesh Agriculture Department.

The case involved appeals filed by Austere Systems Pvt. Ltd., its Director Rahul Gajanan Teni, Fimo Infosolutions Pvt. Ltd., and its Director Jai Kumar Gupta against the CCI's April 4, 2022 order.

The NCLAT upheld the penalties imposed by the CCI and rejected the appellants' argument that penalties should be calculated based on "relevant turnover" (soil testing business only) rather than total turnover, noting that using relevant turnover would result in no penalty since the companies had no prior experience in soil testing.

The Commission in its findings had also observed that Austere Systems and Yash Solutions had geographically allocated the soil testing tenders of U.P. Government in 2017-18 by not bidding in each other's allocated regions and by submitting supporting bids in favour of each other.

The three-member bench comprising Justice Rakesh Kumar Jain, Member (Judicial), Justice Mohd. Faiz Alam Khan] Member (Judicial) and Mr. Indevar Pandey, Member (Technical) held that in absolute terms also the penalties imposed are not excessive and justified on the basis of role performed by the entities in the tenders floated by Agriculture Department, U.P. In the present case, Austere Systems was acting as the leader of the cartel and had provided support to other members of the cartel for bidding in the tenders, accordingly a higher absolute penalty on Austere is justified.

Non-Members cannot seek a waiver u/s 244 of Companies Act: NCLAT dismisses Madras Race Club Members' Oppression Petition

The Chennai bench of the National Company Law Appellate Tribunal (NCLAT) has quashed an order passed by the National Company Law Tribunal (NCLT) and dismissed an oppression petition filed by two individuals against the Madras Race Club, holding that non-members cannot seek a waiver under Section 244 of the Companies Act, 2013.

A bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) observed that Section 244 of the Companies Act explicitly confers the right to apply only on 'members of a company'. The term 'member' is statutorily defined and requires being entered in the register of members. The respondents' status as non-members was a settled fact, affirmed by prior NCLT and NCLAT orders.

The NCLAT rejected the respondents' contentions, stating that the NCLAT's earlier direction to the AGM was a 'gratuitous direction' to consider their case, not a creation of a substantive right to be deemed a member. The Tribunal emphasized that past membership does not grant an indefeasible right to initiate proceedings after lawful removal. It found that the 'exceptional circumstances' cited by the NCLT were hypothetical and not grounded in law, as allowing non-members to file would lead to procedural chaos and abuse of process.

Corporate Debtor Failed to Prove Pre-Existing Dispute over ₹8L Packaging Material Debt: NCLAT Upholds CIRP

The Bench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi recently upheld the initiation of the Corporate Insolvency Resolution Process (CIRP) against a corporate debtor (CD), noting that the CD failed to prove any pre-existing dispute regarding an outstanding ₹8.48 lakh operational debt that was claimed by the operational creditor.

Before NCLAT, the suspended director of Indian Denim, represented by Hemant Phalpher contended that there existed a genuine dispute concerning the quality and fitment of the packaging materials supplied which should have barred the initiation of CIRP. He further argued that the NCLT failed to appreciate the grievances raised by the debtor and that the claim was not undisputed.

The appellate bench comprising Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Naresh Salecha (Technical Member) rejected the contentions raised by the appellant, holding that the alleged dispute regarding the quality of the materials was raised for the first time in the reply before the NCLT without any letter or email or documentary proof in relation to their dissatisfaction.

The tribunal noted that the statutory demand notice issued under Section 8 of the IBC was never replied to, and no communication regarding defective goods was produced before either forum. The claim of inferior quality was, therefore, an afterthought raised merely to resist insolvency proceedings.

Part Payment by Corporate Debtor Extends Limitation Period for Filing Insolvency Application: NCLAT

The Bench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi recently ruled that a part payment made by the corporate debtor to the operational creditor against the total debt constitutes an acknowledgment of debt under the Limitation Act, 1963, thereby extending the limitation period for filing an insolvency application under the Insolvency and Bankruptcy Code, 2016 (IBC).

The NCLAT bench comprising Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Naresh Salecha (Technical Member) observed that the corporate debtor had made a part payment of ₹40,000 by cheque dated 17 May 2016 to the creditor, which was cleared on 20 May 2016.

The tribunal noted that such acknowledgment of debt or part payment within the initial three-year limitation period from the due date of the last invoice (2 December 2013) results in a fresh limitation period starting from the date of the acknowledgment or payment.

Accordingly, the NCLAT endorsed the reasoning of the Ahmedabad NCLT that the ₹40,000 payment effectively revived the limitation period and validated the claim raised by the operational creditors as timely as per the IBC.

Employees’ State Insurance Amount Lying with Corporate Debtor Not Part of Liquidation Estate: NCLAT

The Bench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi recently clarified that the Employees' State Insurance (ESI) amount lying with a corporate debtor during liquidation proceedings is not part of the liquidation estate as per the Insolvency and Bankruptcy Code, 2016 (IBC).

The ruling was rendered by the appellate tribunal against an appeal by the Regional Director of the ESI Corporation challenging an order passed by the National Company Law Tribunal (NCLT), Ahmedabad, which had dismissed an application filed by the appellant seeking segregation of ESI dues from the estate of Gupta Dyeing Printing Mills Pvt. Ltd., the corporate debtor herein that was undergoing liquidation.

The NCLAT Bench comprising Justice Rakesh Kumar Jain (Judicial Member), Justice Mohammad Faiz Alam Khan (Judicial Member) and Naresh Salecha (Technical Member), examined the case in light of statutory provisions and precedents presented.

NCLAT allowed the appeal observing that the present case was squarely covered by the decision of this court in the case of Nurani Subramanian (Supra) and that the judgments relied upon by the respondents were not applicable as the said judgments are not on the issue of ESI.

No Cogent Evidence to Appoint Forensic Auditor to Examine Fund Misappropriation in Company: NCLAT Dismisses Plea

The Bench of the National Company Law Appellate Tribunal (NCLAT) at New Delhi recently set aside a direction by the National Company Law Tribunal (NCLT), Mumbai that directed a forensic audit into the affairs of an iron and steel company, observing that there was no cogent evidence of fund misappropriation or lack of probity to justify such an audit.

Two appeals were instituted before the NCLAT on the basis of a long-running dispute between the shareholders of Arya Iron & Steel Co. Pvt. Ltd. (Arya Iron) The shareholders, namely - the Pawan Arya Group (Pawan Arya) and Ravi Arya Group (Ravi Arya) each held 25.5% of shares with the rest of the 49% held by Palm View Overseas Ltd. (PVOL).

A Bench comprising Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) observed that the NCLT had exceeded its jurisdiction prescribed under Section 242(4) of the Companies Act, 2013 which permitted the tribunal pass interim orders for regulating the affairs of the company upon such terms and conditions which are just and equitable.

The NCLAT noted that the NCLT order to appoint a forensic auditor is in the nature of an interim order, passed during the pendency of the Company Petition so as to enable the. NCLT to pass a final order. However, here the NCLT had dismissed the Company Petition on the ground no case was made out for oppression and mismanagement.

The NCLAT noted that none of the exceptional circumstances justifying such directions - such as a complete deadlock or equitable necessity for winding up - existed in this case. It further recorded that the NCLT had already found no lack of probity, no oppression and no mismanagement, making the direction for forensic audit legally unsustainable.

IBBI Cannot issue General Circular to Bar RP Appointment u/s 34(4)(b) of IBC: NCLAT Sets aside NCLT Order

The National Company Law Appellate Tribunal (NCLAT), has allowed an appeal filed by Resolution Professional of Rajesh Landmark Projects Private Limited by setting aside the NCLT order holding that the Insolvency and Bankruptcy Board of India (IBBI) cannot issue a general circular to bar the appointment of Resolution Professionals as liquidators under Section 34(4)(b) of the Insolvency Bankruptcy Code (IBC), 2016.

A two-member bench comprising Justice Ashok Bhushan, Chairperson, and Barun Mitra, Member (Technical), examined the legislative scheme under Section 34 of the IBC. The Tribunal observed that Section 34(1) clearly establishes that the RP shall act as liquidator unless replaced under the specific circumstances mentioned in Section 34(4).

The bench held that the power conferred on IBBI under Section 34(4)(b) is to recommend replacement of a particular RP based on specific facts related to that RP's work and conduct, and not a general power to issue a circular barring all RPs from being appointed as liquidators.

The NCLAT concluded that the IBBI had misinterpreted its powers under Section 34(4)(b) by issuing a general circular that militated against the legislative scheme of Section 34(1). The Tribunal emphasized that the power to recommend replacement must be exercised qua a particular RP in the CIRP of the corporate debtor, and not as a blanket directive applicable to all cases.

NCLAT dismisses Punjab National Bank’s appeal, upholds NCLT order rejecting Section 7 plea against Concast Morena as time-barred

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) dismissed an appeal filed by Punjab National Bank, upholding the National Company Law Tribunal's (NCLT) order that rejected the bank's Section 7 application against Concast Morena Road Projects Pvt. Ltd. as being time-barred.

The NCLAT bench comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member, Technical), agreed with the appellant on the point of disbursement, noting that the NCLT ought not to have taken a contrary view when the Corporate Debtor did not appear to dispute the claim. However, the Tribunal focused on the limitation issue as the deciding factor.

The NCLAT distinguished the facts of the present case from the Supreme Court's decision in Sesh Nath Singh. It was observed that in the Supreme Court case, the benefit of Section 14 was granted because the earlier proceedings (under SARFAESI) were prima facie without jurisdiction and had been stayed by the High Court.

The NCLAT held that the bank's recovery application before the Debt Recovery Tribunal (DRT) was a regular proceeding for recovery and not one that was stayed on jurisdictional grounds. Therefore, the special circumstances required to exclude time under Section 14 were not present, and the Supreme Court's ruling was not applicable.

NCLT must give reasons for reliefs not granted: NCLAT remands Katariya Infraproject matter

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) held that an adjudicating authority (National Company Law Tribunal (NCLT)) must provide explicit reasons for refusing to grant reliefs sought by a party and cannot simply ignore them.

Katariya Infraproject Pvt. Ltd. & Anr., the appellant, approached the NCLAT challenging an order passed by the Adjudicating Authority (NCLT). The appeal stemmed from an application where the appellant had prayed for various reliefs and concessions.

The NCLAT bench comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member, Technical), agreed with the appellant's submissions. Upon perusing the record, the bench observed that the impugned order from the Adjudicating Authority indeed showed no consideration of the reliefs claimed in Annexure-H and offered no reasons for their refusal. The Tribunal held that in the interest of justice, this failure to provide reasons was a significant flaw.

NCLAT dismisses personal guarantors' appeals against Bank of Baroda, upholds lower court's direction for document inspection

In a recent ruling, the National Company Law Appellate Tribunal (NCLAT) dismissed appeals filed by personal guarantors, upholding the National Company Law Tribunal's (NCLT) order that had directed the Bank of Baroda to permit document inspection.

The appeals were filed by Rajesh Jain and Shailesh Jain against an order passed by the NCLT, Mumbai Bench. The underlying proceedings were initiated by the Bank of Baroda under Section 95 of the IBC against the personal guarantors. The guarantors had filed applications (IAs) before the NCLT seeking directions for the bank to produce certain lending documents to verify the amount of debt claimed as repaid.

The NCLAT bench comprising Justice Ashok Bhushan (Chairperson) and Indevar Pandey (Member, Technical), analyzed the NCLT's order and observed that the direction for inspection within two weeks was sufficient to protect the appellants' interests. The Tribunal held that this specific direction adequately addressed the guarantors' need for access to the documents. The NCLAT concluded that the impugned order did not warrant interference under its appellate jurisdiction, as the mechanism for inspection was already provided for by the NCLT.