NCLAT Upholds CCI’s Jurisdiction Under Section 4 of the Competition Act to Probe WhatsApp - Meta Data-Sharing Practices

In a landmark judgment, the National Company Law Appellate Tribunal (NCLAT) has upheld the Competition Commission of India’s (CCI) jurisdiction to investigate WhatsApp and its parent company, Meta Platforms Inc., for alleged abuse of dominance under Section 4 of the Competition Act, 2002.

The case originated from the CCI’s suo motu order of March 2021, directing an investigation into WhatsApp’s 2021 update that required users to consent to expanded data sharing with Meta group entities as a condition for continued service.

The Tribunal comprising Justice Ashok Bhusan[Chairperson] and Mr Arun Baroka [ Technical Member] stated that while privacy laws address individual consent and protection, competition law examines whether such policies are used as tools of market abuse. “The mere overlap in subject matter does not oust the jurisdiction of the CCI.

NCLAT Dismisses Section 9 Application for Non-Service of Demand Notice u/s 8

The National Company Law Appellate Tribunal (NCLAT) , principal bench, New Delhi has dismissed an appeal challenging the rejection of a Section 9 application filed under the Insolvency and Bankruptcy Code (IBC), holding that the statutory requirement of serving a Section 8 demand notice on the corporate debtor was not fulfilled.

The Tribunal held that this constituted an afterthought, lacking procedural propriety and credibility, and could not cure the fundamental defect in the original application.

In its detailed analysis, the bench comprising Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) noted that the appellant had failed to demonstrate valid service of the Section 8 notice either to the registered office of the corporate debtor or to any of its directors.

The Tribunal relied on the statutory mandate under Section 8 of the IBC read with Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, emphasizing that strict compliance with these preconditions is mandatory before a Section 9 application can be entertained.

The appellate bench further clarified that procedural lapses cannot be remedied by post-hearing submissions or belated affidavits, and that such attempts do not establish maintainability of the application.

The bench comprising Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member), after examining the record, upheld the NCLT’s findings. It noted that the appellants had failed to produce any evidence before the NCLT to justify the transactions, and that their attempt to introduce documents at the appellate stage did not meet the strict conditions under Order XLI Rule 27 of the CPC.

The Tribunal emphasised that additional evidence cannot be admitted in an appeal merely to fill gaps left by negligence at trial. It also rejected the argument that directors are free to carry on parallel business during CIRP, holding that diversion of receivables through accounts opened in the corporate debtor’s name clearly constituted fraud.

Non‑submission of final Resolution Plan bars challenge: NCLAT upholds CIRP and approved plan

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld the approval of the resolution plan , rejecting the challenge mounted by the appellant.

The appeal arose from the order of the National Company Law Tribunal (NCLT), which had dismissed the consortium’s application questioning the Letter of Intent issued in favour of the respondent and seeking its disqualification under Section 29A of the Insolvency and Bankruptcy Code, 2016.

The NCLAT concurred with the NCLT’s findings. Ashok Bhushan(Chairperson) and Arun Baroka (Technical Member) , delivering the judgment, emphasised that non‑submission of a final resolution plan bars an applicant from questioning the CIRP outcome.

The Tribunal observed that the consortium neither participated in the challenge mechanism nor submitted a compliant plan, and therefore could not later allege irregularities.

The NCLAT also examined the allegations of ineligibility under Section 29A. It held that the Share Purchase Agreement of 2019 between Varutha’s shareholders and M3M group entities never fructified, as the Enforcement Directorate had attached the land and shares were never transferred.

Fraud Allegations in CIRP Not Grounds for Revisiting Delay Condonation Order: NCLAT Dismisses SEBI’s Recall Application

The principal bench of the National Company Law Appellate Tribunal (NCLAT) has dismissed SEBI’s attempt to recall a NCLAT judgment rejecting its delay condonation application in a CIRP-related appeal.

SEBI filed an IA before the Tribunal seeking recall of its judgment dated 21.11.2024 in Company Appeal. The appeal had challenged an NCLT order. SEBI argued that its application for condonation of delay had been rejected without considering relevant grounds, including the exclusion of time under Section 14 of the Limitation Act.

The bench comprising Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) examined established principles governing recall of judgments, referring to precedents such as Greater Noida Industrial Development Authority v. Prabhjit Singh Soni (2024) and Union Bank of India v. Dinkar T. Venkatasubramanian (2020).

It noted that recall applications are limited to cases of error apparent on the face of the record, clerical mistakes, or circumstances where justice demands intervention. Allegations of fraud in the CIRP were unrelated to the delay condonation order and therefore did not constitute valid grounds for recall.

NCLAT Admits Tremco's Insolvency Plea Against Brite Proofings Over Rs. 18.74 Crore Debt, Initiates CIRP

The National Company Law Appellate Tribunal (Principal Bench, New Delhi) has admitted a Section 9 application filed by Tremco CPG (India) Private Limited against Brite Proofings Private Limited, leading to the initiation of a Corporate Insolvency ResolutionProcess (CIRP).

The Tribunal held that the Operational Creditor had established the existence of a debt exceeding the statutory threshold and a default, and that the Corporate Debtor's contentions regarding a pre-existing dispute and procedural defects were untenable.

A division bench comprising Justice S. Kakar and Justice N. Sharma, after a detailed analysis of the pleadings and documents, rejected the contentions of the Corporate Debtor. The Tribunal found that a Board Resolution passed by the Operational Creditor had duly authorized the signatory to file the application before any court or tribunal in India, thereby overcoming the territorial limitation in the Power of Attorney. Regarding the alleged pre-existing dispute, the bench observed that the Corporate Debtor's claims were vague and unsubstantiated, relying on general grievances without linking them to specific invoices.

The Tribunal emphasized that the Corporate Debtor had accepted the goods and made payments without raising any quality concerns at the relevant time, and its own email admissions of an outstanding debt of over Rs. 1 crore, which was above the statutory threshold, contradicted its claim of a dispute.

ED’s Pre-CIRP Attachment Ceases Post Plan Approval: NCLAT Extends S. 32A Protection to Respondent

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has ruled that the Enforcement Directorate’s (ED) provisional attachment of the respondent properties and accounts made before initiation of insolvency proceedings ceases to operate once a resolution plan is approved.

The dispute arose from the resolution process of Alchemist Infra Realty Ltd., a real estate company incorporated in 2008.

After hearing all parties, the bench comprising Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member)upheld the appellant’s submissions. It was held that once the resolution plan was approved on 4 July 2024, Section 32A immunity extended to the debtor’s assets, and ED’s provisional attachment ceased to operate.

NCLAT found the NCLT wrong in directing the SRA to approach PMLA authorities, clarifying that Section 32A itself provides statutory protection.

Claim for Accrued Interest Beyond NCLT Orders Unsustainable: NCLAT Dismisses IA Seeking ₹15.15 Cr

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has dismissed the Interlocutory Application (IA) filed in the Company Appeal seeking 15.15 cr accrued interest. It was held that claims for such accrued interest were unsustainable beyond the NCLT orders.

The application sought directions for the release of ₹15.15 crore, claimed as interest accrued on amounts payable to the appellant pursuant to earlier orders of the National Company Law Tribunal (NCLT), Allahabad Bench, and NCLAT itself.

After hearing both sides, the bench comprising Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) rejected the appellant's claim. The Tribunal noted that neither the interim order of nor the final judgment fixed any time limit for release or directed payment of interest in case of delay.

It emphasised that its final judgment had conclusively held the ₹750 crore deposit and accrued interest to be assets of the respondent, and had set aside NCLT’s direction granting proportionate interest to the appellant. Consequently, the appellant's claim for ₹15.15 crore was unsustainable.

Tripartite Loan to Homebuyers Not Financial Debt of Builder: NCLAT Upholds RP’s Rejection of UCO Bank’s ₹18.82 Cr Claim

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has dismissed appeals filed by UCO Bank challenging the rejection of its claim in the Corporate Insolvency Resolution Process (CIRP) and the subsequent approval of the resolution plan.

The Tribunal ruled that loans sanctioned by UCO Bank to homebuyers under Tripartite Agreements did not constitute financial debt owed by the corporate debtor.

In its judgment, a two-member bench comprising Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) examined the Tripartite Agreements relied upon by the Bank. The Tribunal noted that while the agreements permitted the Bank to sell or alienate units in case of borrower default, they did not impose any repayment obligation on the builder. Clauses cited by UCO Bank, including those binding the builder to certain terms, were found insufficient to establish a direct financial liability of the corporate debtor.

The Tribunal emphasized that the definition of “financial debt” under Section 5(8) IBC requires disbursal against consideration for the time value of money, which was absent in the builder’s relationship with the Bank.

The Tribunal further observed that decrees obtained by UCO Bank from the DebtRecovery Tribunal (DRT) against borrowers and the company prior to CIRP initiation were not the basis of its claim in Form-C and could not alter the nature of the transaction.

The Tribunal also noted that avoidance applications under Section 66 IBC were pending with respect to certain transactions, and any recoveries therefrom could be passed on to the Bank subject to approval of the successful resolution applicant.

Unregistered MoDT & Mere Sale Agreement Confer No Title: NCLAT Upholds Liquidator’s Right to Recover CD’s Title Deeds

Mr. V. Jaisankar vs Mr. Mahalingam Suresh Kumar

CITATION : 2025 TAXSCAN (NCLAT) 380

In a recent case, the National Company Law Appellate Tribunal (NCLAT), Chennai Bench, considered whether the appellant could retain the original title deeds of a property belonging to the corporate debtor.

The appeal arose from an order of the NCLT, Chennai, which had directed the appellant to hand over the deeds to the liquidator appointed in the liquidation proceedings of the corporate debtor.

The two-member bench of Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member)rejected these contentions. It reiterated the settled principle that a mere agreement for sale does not transfer title to immovable property.

Since no sale deed was executed within the stipulated period, ownership continued to vest with the corporate debtor. The tribunal also noted that the appellant had not pursued any civil remedy for specific performance of the agreement.

RP’s Admission of Claim Amounts to Debt Acknowledgement u/s 18 of Limitation Act: NCLAT holds S. 7 CIRP Petitions Within Limitation

The National Company Law Appellate Tribunal (NCLAT), principal bench, New Delhi, in a recent case, had held CIRP under section 7 of the Insolvency and Bankruptcy Code (IBC) 2016 within the limitation period as the Resolution Professional’s (RP) admission of claim amounted to debt acknowledgement under section 18 of the Limitation Act, thus initiating a new limitation period

The appeals arose from orders of the National Company Law Tribunal (NCLT), Jaipur Bench, dated 22 January 2025, admitting two separate petitions under Section 7 of the Insolvency and Bankruptcy Code (IBC) filed by Omkara Asset Reconstruction Pvt Ltd, the assignee of loans originally advanced by Dewan Housing Finance Corporation Limited (DHFL).

The two-member bench comprising N. Seshasayee (Judicial Member) and Arun Baroka (Technical Member) clarified that limitation is a mixed question of law and fact, and tribunals must compute limitation independently under Section 3 of the Limitation Act.

It distinguished between “date of default” in Part IV of the petition (cause of action) and computation of limitation (remedy). Importantly, the tribunal held that once CIRP is admitted, the RP assumes full authority to act on behalf of the corporate debtor under Sections 17–25 IBC. Admission of claims by the RP therefore constitutes an acknowledgement of liability, which qualifies under Section 18 of the Limitation Act.

NCLAT Invokes S. 231 to Oversee Corporate Debtor Revival, Grants Final 60‑Day Extension for Arrangement Scheme Implementation

C GANESH vs ASHOK SESHADRI

CITATION : 2025 TAXSCAN (NCLAT) 382

In a significant ruling, the National Company Law Appellate Tribunal (NCLAT), Chennai, has invoked its supervisory power of Tribunal under section 231 and granted a final 60-day extension to implement the arrangement scheme under sections 230-232 of the Insolvency and Bankruptcy Code (IBC) 2016.

The Tribunal quashed the cancellation of the Scheme of Arrangement earlier ordered by the National Company Law Tribunal (NCLT), Chennai.

The two-member bench comprising Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member), after considering submissions, acknowledged the tension between revival and liquidation.

It noted precedents such as Ashok Dattatray Atre v. SBI and Prakash Oil Depot v. G. Madhusudhan Rao, where courts recognised the Tribunal’s jurisdiction to extend timelines for scheme implementation. The tribunal emphasised that Section 231 empowers the Tribunal not only to supervise but also to issue directions or modifications necessary for the proper implementation of a compromise or arrangement.Balancing these considerations, the Tribunal granted the appellant a final 60‑day extension to comply with the sanctioned scheme.

Mere Shareholder Status Bars Appeal u/s 61: NCLAT Upholds NCLT Admission of CIRP on Corporate Guarantees

Peninsula Holdings andInvestments Pvt. Ltd. vs JM Financial Credit Solutions Limited

CITATION : 2025 TAXSCAN (NCLAT) 383

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has dismissed the appeal filed by the appellant under Section 61 of the Insolvency and BankruptcyCode, 2016 (IBC), holding that mere shareholder status does not confer locus standi as a “person aggrieved” under Section 61.

NCLAT examined whether preference shares could alter the appellant’s status. It noted that while in Sanjay D. Kakade v. HDFC Ventures Trustee Co. Ltd. (2023), preference shares with assured returns were treated as financial debt due to their commercial effect of borrowing, the Supreme Court in EPC Constructions India Ltd. v. Matix Fertilizers and Chemicals Ltd. (2025) had clarified that redeemable preference shares are part of share capital, not debt.

Unless contractual terms impose binding repayment obligations akin to borrowing, preference shares remain equity‑like instruments. In the present case, Peninsula Holdings had not produced sufficient documentation to establish creditor status, and its appeal was premised on shareholding alone.

The two-member bench comprising Ashok Bhushan (Chairperson) and Indevar Pandey (Technical Member)concluded that Peninsula Holdings was a “mere shareholder” and therefore lacked locus standi under Section 61.

Corporate Guarantee Constitutes Financial Debt u/s 5(8)(i): NCLAT Upholds NCLT’s Admission of S.7 Petition

In a recent case, the principal bench of the National Company Law Appellate Tribunal (NCLAT), New Delhi, upheld the order of the National Company Law Tribunal (NCLT), which had admitted a Section 7 application against the corporate debtor based on guarantees executed in favour of the financial creditor, the respondent.

The two-member bench comprising Ashok Bhushan (Chairperson) and Indevar Pandey (Technical Member) upheld the NCLT’s admission order. It ruled that once a corporate entity voluntarily binds itself as a guarantor, it becomes independently answerable for the debt, and such liability constitutes “financial debt” under Section 5(8)(i) of the IBC.

The Tribunal confirmed that the statutory twin test for admission under Section 7, existence of financial debt and occurrence of default, was satisfied. It rejected the appellant’s plea that the creditor should have first proceeded against the AOP, holding that the liability of borrower and guarantor is concurrent and the creditor’s choice cannot be questioned.

The Tribunal further observed that the NCLT’s order disclosed clear satisfaction regarding debt and default, supported by documentary evidence, and there was no material irregularity or perversity.

It emphasised that the appellant’s grievance was essentially rooted in its desire to protect its investment interest, which does not amount to a legal injury under the IBC. Once insolvency is admitted, management vests in the Interim Resolution Professional, and shareholders must participate through statutory mechanisms rather than contest admission.

Balance Sheet Acknowledgement Binds Guarantor u/s 128 Contract Act: NCLAT Sets Aside NCLT’s Limitation Bar in SBI's Section 95 Petition

The National Company Law Appellate Tribunal (NCLAT) Principal Bench, New Delhi, has allowed the section 95 petition filed by the State Bank of India (SBI) against the respondent, ruling that the petition is not time-barred and the acknowledgement of debt in the balance sheet binds the guarantor of the corporate debtor (CD) under section 128 of the Contract Act.

The appellate tribunal framed three issues: (i) limitation, (ii) validity of balance sheet acknowledgements, and (iii) invocation of the guarantee. It held that the recall notice of 30 September 2016 constituted the invocation of the guarantee, fixing default on 7 October 2016

The two-member bench comprising Yogesh Khanna (Judicial Member) and Indevar Pandey (Technical Member) observed that the balance sheets of the corporate debtor acknowledging dues, even if signed by suspended directors, are valid under law and bind the guarantor by virtue of the guarantee deed clauses and Section 128 of the Contract Act.

Such acknowledgements extended the limitation under Section 18 of the Limitation Act, keeping the Section 95 petition filed in October 2021 within time, especially with the Supreme Court’s COVID-19 extension orders.

Advance Payment for Scrap Sale Qualifies as Operational Debt u/s 5(21): NCLAT Upholds CIRP Admission

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld the admission of a Section 9 petition against the respondent holding that the advance payment for scrap sale qualified and fell under the purview of the operational debt under section 5[21].

The dispute stems from a sale agreement dated 31.01.2019 between Vasundhara Seamless Stainless Tubes Pvt. Ltd. (Corporate Debtor) and B.N. Enterprises (Operational Creditor), under which machinery and scrap were to be sold for ₹1 crore.

The NCLAT noted that the corporate debtor had indeed received ₹1 crore under the 2019 agreement but failed to produce evidence, such as delivery receipts or transport records, to substantiate its claim that the scrap had been lifted.

The two-member bench comprising Yogesh Khanna (Judicial Member) and Indevar Pandey (Technical Member) held that mere assertions could not rebut documentary evidence of repeated demands and balance sheet entries acknowledging liability. It was observed that advance payments made for goods or services fall within the ambit of operational debt, and failure to deliver or refund constitutes default under Section 3(12) of the IBC.

Forgery Allegations on Subsequent Guarantees Cannot Discharge an Earlier Continuing Guarantee: NCLAT Upholds SBI’s Section 95 Petition

The National Company Law Appellate Tribunal ( NCLAT ), Principal Bench, New Delhi, has upheld the initiation of insolvency resolution proceedings against a personal guarantor under Section 95 of the Insolvency and Bankruptcy Code, 2016, holding that the forgery allegations on subsequent guarantees post the resignation of the guarantor from the company cannot discharge a continuing guarantee.

The Tribunal examined the 2009 guarantee deed, which explicitly stated that it was a continuing guarantee covering amounts advanced under credit facilities, irrevocable and enforceable notwithstanding disputes, and unaffected by variations in loan terms.

The two-member bench comprising Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that Aggarwal’s liability under the 2009 deed continued despite his resignation and alleged forgery of later documents.

The resignation did not amount to revocation of the guarantee, and the absence of express communication to the bank reinforced liability. Allegations of forgery were treated as collateral disputes, insufficient to negate the binding nature of the 2009 deed.

On limitation, the Tribunal noted that demand was made in July 2019 and default continued thereafter, keeping the claim within limitation. The RP’s additional report was held permissible, as NCLT had granted liberty to file, and the appellant had the opportunity to respond.

S.19 of Contempt of Courts Act Limited to Punishment Orders: NCLAT Rejects Appeal Against Dismissal of Contempt

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has ruled that appeals against dismissal of contempt petitions are not maintainable under Section 19 of the Contempt of Courts Act, 1971, as the provision applies only to orders imposing punishment.

While acknowledging the debate, the Tribunal refrained from conclusively deciding the applicability of Section 425 to IBC proceedings, noting that the issue is pending consideration in other matters. For these appeals, it limited itself to the narrower ground: since no punishment was imposed, appeals under Section 19 were not maintainable.

The two-member bench of SharadKumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) further clarified that contempt proceedings are essentially between the court or tribunal and the alleged contemnor. Applicants act only as informers, bringing alleged disobedience to the tribunal’s attention. Once contempt petitions are filed, the matter lies exclusively between the tribunal and the contemnor. Consequently, dismissal of contempt petitions does not confer a right of appeal under Section 19.

Respondents’ Admission of Demand Notice in SC Pleadings Overrides Technical Objections: NCLAT Sets Aside Rejection of SBI’s Application u/s 95

The National Company Law Appellate Tribunal (NCLAT), Chennai bench, has overturned the rejection of State Bank of India’s (SBI) insolvency applications under Section 95 of the Insolvency and Bankruptcy Code, 2016, against personal guarantors of respondents. The tribunal held that the respondents’ own admission of receiving a demand notice in their writ petitions before the Supreme Court overrides technical objections about service.

The two-member bench of SharadKumar Sharma (Judicial Member) and Jatindranath Swain(Technical Member) observed that “admission of a particular fact is the best evidence” and once respondents acknowledged receipt, they could not later deny service by raising technical objections.

It was observed that the purpose of the service is to impart knowledge of impending proceedings, which was clearly achieved since the guarantors had sufficient awareness to challenge the provisions of the Code before the Apex Court. In such circumstances, the tribunal held that rejection of SBI’s applications on the ground of non‑service was unsustainable.

NCLAT upholds ₹36.53 Crore Liability against Former Directors in Fraudulent Trading Case

The NCLAT bench, comprising Justice Mohd. Faiz Alam Khan (Member Judicial) and Naresh Salecha (Member Technical), found the transaction highly unusual and against commercial wisdom. They noted that the payment schedule required 99% payment before the seller even acquired the debt from KotakMahindra Bank, indicating a pre-arranged mechanism to siphon funds from the corporate debtor.

The Tribunal rejected arguments about time limitations, noting that the legislature intentionally provided no look-back period for fraudulent transactions. They clarified that the NCLT had jurisdiction to consider the validity of the MOU as it was central to determining whether fraudulent trading had occurred.

ED Attachment Not Verified: NCLAT says NCLT Committed ‘Manifest Illegality’, Directs Fresh Inquiry

The National Company Law Appellate Tribunal (NCLAT) has set aside an order passed by the National Company Law Tribunal (NCLT), Mumbai, and remanded the matter for fresh consideration, holding that NCLT committed ‘Manifest Illegality’. The bench held after considering the failure to verify the Directorate of Enforcement (ED) attachment

The NCLAT bench, comprising Justice Mohd. Faiz Alam Khan and Indevar Pandey, found that the NCLT had committed a "manifest illegality" by not ascertaining whether the flat was actually attached by the ED. The Appellate Tribunal held that it was the NCLT's duty to adjudicate on this fundamental issue.

The NCLAT has now remanded the case back to the NCLT with directions to determine whether Flat No. 2402 was attached by the ED. If the flat was not attached, the NCLT would have the jurisdiction to order its release. The Appellate Tribunal has directed the NCLT to dispose of the matter within one month of the first appearance of the parties.

Form‑B Contemplates Mutual Dealings: NCLAT Admits CNH Industrial’s ₹3.40 Cr Net Claim After Set‑off but Confirms Nil Payout in CIRP

CNH Industries vs SREI Equipment Finance Ltd. & Anr

CITATION : 2025 TAXSCAN (NCLAT) 391

The National Company Law Appellate Tribunal (NCLAT), principal bench, New Delhi, in a recent case, has clarified that Form B under the CIRP Regulations permits disclosure of mutual dealings and set‑off at the claim stage.

NCLAT examined Regulation 7 and Form‑B, noting that Column 8 specifically requires operational creditors to disclose “details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set‑off against the claim.”

The two-member bench of Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that this provision clearly permits creditors to present net claims after set‑off. It rejected the argument that a moratorium prevents such disclosure, clarifying that filing a claim with set‑off is not an enforcement action but part of the insolvency process itself.

Recall Application u/r 11 Cannot be Utilised as Camouflage to Seek Review of an Order Decided on Merits: NCLAT

The National Company Law AppellateTribunal (NCLAT) Chennai bench has ruled that recall applications filed under Rule 11 of the NCLT Rules, 2016, cannot be misused as a disguise to seek review of orders already decided on merits.

The judgment further referred to the Supreme Court’s decision in Greater Noida Industrial Development Authority v. Prabhjit Singh Soni, which distinguished between procedural review and review on the merits.

The Court had held that procedural review, akin to recall, is an inherent power to set aside palpably erroneous orders passed under misapprehension or in violation of natural justice. However, a review of merits involves re‑examination of substantive findings, which is not an inherent power.

Applying these principles, the two-member bench of Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) concluded that RCC E‑Construct had voluntarily participated in the proceedings leading to the 24 March 2025 order, which was passed after hearing its submissions.

The grounds of “grave injustice” and “lack of opportunity to file replies” were found to be vague and insufficient to invoke recall jurisdiction. Since the order was passed on merits, the recall application was in effect a review attempt, which is impermissible under Rule 11.

When Dept Admits No Service Tax Liability, It cannot Deny Refund of Deposit made during Investigation on Limitation: Chhattisgarh HC

In a recent ruling, the Chhattisgarh High Court observed that when the Department itself accepts that no service tax liability exists, it cannot reject a refund of the amount deposited during investigation by invoking limitations and procedural lapses.

The Division Bench of Justice Rajani Dubey and Justice Amitendra Kishore Prasad explained that the appellant’s payment during investigation could not be treated as service tax because no assessment or determination of liability had taken place.

The court pointed out that Article 265 of theConstitution bars retention of amounts without authority of law and that once the Department itself accepted non-liability through its closure letter, it could not rely on technicalities to deny refund. The court observed that procedural lapses cannot override the right to recover money paid under a mistaken belief, especially when the Department has already confirmed that no tax was due.

NCLAT affirms NCLT's Power to Declare Fraudulent Transactions Void

In a recent ruling, the National Company Law Appellate Tribunal(NCLAT), New Delhi bench has affirmed that the National Company Law Tribunal has jurisdiction to examine and declare documents void ab initio when they are found to be fraudulent, even though such power is not explicitly mentioned in Section 66 of the Insolvency and Bankruptcy Code.

The NCLAT bench, comprising Justice Mohd. Faiz Alam Khan (Member Judicial) and Naresh Salecha (Member Technical), found the transaction highly unusual and against commercial wisdom. They noted that the payment schedule required 99% payment before the seller even acquired the debt from Kotak Mahindra Bank, indicating a pre-arranged mechanism to siphon funds from the corporate debtor.

The Tribunal rejected arguments about time limitations, noting that the legislature intentionally provided no look-back period for fraudulent transactions. They clarified that the NCLT had jurisdiction to consider the validity of the MOU as it was central to determining whether fraudulent trading had occurred.

The NCLAT distinguished between documents that are "void ab initio" (which can be ignored by courts as they are non-existent in the eyes of law) and "voidable" documents (which require a declaration from a competent court). The MOU was deemed void ab initio due to fraud, and thus the NCLT was within its rights to ignore it without needing a separate civil court declaration.

Authorisation Lapse in Insolvency Petition: NCLAT allows 98 Homebuyers to cure the defect

The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, has permitted 98 homebuyers to cure the authorisation defect in their insolvency petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016.

The tribunal held that the adjudicating authority ought to have allowed the filing of individual affidavits to validate the authorisation, noting that the Section 7 application was initiated on behalf of 98 homebuyers of the Avenue 54 project who formed a registered welfare association.

The Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), observed that Form-1 under Rule 4 of the IBC Rules requires specific authorisation by financial creditors but does not prohibit the filing of an application through an authorised representative. The tribunal held that a defect in authorisation is not fatal and must be allowed to be corrected.

The NCLAT noted that the NCLT had rejected the filing of affidavits at a later stage of rejoinder despite the fact that the petition was filed on behalf of numerous homebuyers and the authorisation issue was capable of rectification.

Liquidator Cannot Short-Circuit Jurisdiction": NCLAT Refuses to Adjudicate Disputed Contractual Dues Against UP Rajkiya Nirman Nigam

Pooja Bahry vs Uttar Pradesh Rajkiya Nigam Limited

CITATION : 2025 TAXSCAN (NCLAT) 396

The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising [Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical, in Company Appeal (AT) (Insolvency) No. 1561 of 2023, upheld the NCLT's decision that the liquidator cannot invoke the NCLT's summary jurisdiction to recover a disputed contractual debt from Uttar Pradesh Rajkiya Nirman Nigam Limited (URNL). The NCLAT held that the Liquidator had attempted to "sidestep and short-circuit the jurisdiction of other authorities" for the enforcement of uncrystallized dues.

The Liquidator sought directions against URNL and Uttar Pradesh Power Transmission Corporation Limited (UPPTCL) to recover an outstanding receivable of ₹172.58 lakhs. The core argument according to theAppellant was that the outstanding amount reflected in the Corporate Debtor’s audited balance sheet, constituted a legally enforceable and admitted liability that automatically formed part of the liquidation estate. Therefore, the recovery fell within the broad powers of the NCLT under Section 60(5)(c) of the IBC.

No CIRP for COVID-Period Default: NCLAT Affirms NCLT Order Rejecting Application u/s 10A

The National Company Law Appellate Tribunal (NCLAT) Principal Bench at New Delhi has upheld the dismissal of a Section 7 application under the Insolvency and Bankruptcy Code, 2016, holding that no Corporate Insolvency Resolution Process (CIRP) can be initiated where the date of default falls within the period suspended by Section 10A during the COVID-19 pandemic.

The Tribunal reiterated that once a creditor specifies a particular default date in the demand notice and the petition, the proceedings must proceed on that basis, and a CIRP application is not maintainable for such barred defaults.

The bench, comprising Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member), was hearing an appeal filed by Raja Som Sehrawat, who had claimed that a sum of Rs. 3.3 crore disbursed in July 2020 constituted a financial debt repayable within three months.

The Appellate Tribunal emphasised that Section 10A prohibits not just filing during the exclusion window, but permanently bars any application for defaults arising in that period. As long as the default arose during the suspended timeline, the creditor cannot attempt to rely on subsequent conduct or alleged extensions to escape the statutory bar.

No Procedural Lapse by Resolution Professional: NCLAT Upholds Order Rejecting Repayment Plans of Guarantors

Reena Paul vs CA FrancisMathew

CITATION : 2025 TAXSCAN (NCLAT) 398

The National Company Law Appellate Tribunal (NCLAT) at Chennai has upheld the rejection of repayment plans submitted by personal guarantors undergoing insolvency proceedings under the Insolvency andBankruptcy Code, 2016, holding that the Resolution Professional (RP) and the Adjudicating Authority acted strictly in accordance with the statutory framework.

The Tribunal found no illegality or procedural lapse in the evaluation process and confirmed that the guarantors themselves had failed to file any revised or compliant repayment proposals within the timelines prescribed under the Code.

The NCLAT observed that the repayment plans placed before the RP did not satisfy the requirements under Section 105 and Section 115 of the Code, particularly concerning repayment structure, priority of payments, timelines, asset details, and viability assessment.

The Appellate Tribunal also rejected the contention that the RP had treated the proceedings as a form of group insolvency. It held that the RP had evaluated each plan independently, and the Adjudicating Authority had rightly remarked that the non-filing of a revised plan left no option but to reject the initial plans.

Suspended Directors Have No Right to Valuation Reports Rejected by COC u/s 24 of IBC: NCLAT

Manish Bagrodia Director(Suspended Powers) of Winsome Yarns Limited vs Anil Kohli ResolutionProfessional of Winsome Yards Limited

CITATION : 2025 TAXSCAN (NCLAT) 399

The Principal Bench of the National Company Law Appellate Tribunal (NCLAT), New Delhi, ruled that suspended directors of a corporate debtor cannot demand access to valuation reports rejected by the CoC, as they are not CoC members under Section 24 of the IBC, 2016.

The Tribunal consisted of Chairperson, Justice Ashok Bhushan and Technical Member, Barun Mitra, heard and reviewed the matter.

The Tribunal, after considering the arguments and minutes of the COC meetings, found no deliberate lapse or discrimination by the RP and stated that the initial valuation reports were received on the day of the 9th CoC meeting and thus could not have been circulated with the agenda.

Further, The Tribunal affirmed that the CoC's decision to reject the initial reports and obtain new ones fell within its commercial wisdom, which should not be interfered with. Since the final, relevant valuation reports and resolution plans were provided to the Appellant, the NCLAT concluded that he had no legal right to demand access to reports that were discarded and no longer relevant to the CIRP.

Interlocutory Orders Merge with Final Dismissal, Cannot Be Used Independently: NCLAT Bars Extraction of Stray Findings from Dismissed Company Petition

The Tribunal comprising Judicial Member, Justice Sharad Kumar Sharma and Technical Member, Jatindranath Swain, heard and reviewed the matter, rejected the respondent’s arguments.

The Tribunal, after considering the submissions made, held that once a main proceeding is dismissed on merits, all interlocutory orders passed during its pendency merge with the final order and cease to have independent existence and emphasized that the dismissal of the Company Petition in its entirety meant that no relief was granted to the Respondents.

The Tribunal stated that any stray findings or observations in the dismissal order could not be extracted to imply a partial grant of relief, especially when the dismissal itself remained unchallenged by the Respondents.

Date of Default Not Mandatory in Invoice-Based Demand Notice: NCLAT Sets Aside Section 9 Rejection

M/S. METALS AND METALELECTRIC PRIVATE LIMITED vs M/S. PRINCE FOUNDATIONS LIMITED

CITATION : 2025 TAXSCAN (NCLAT) 401

The Chennai Bench of National Company Law Appellate Tribunal (NCLAT) clarified that a specific date of default was not mandatory in Form-4 invoice-based demand notices under Section 9 of the IBC, 2016. The Tribunal held that default was established from the invoices themselves and limitation runs from the last transaction in continuous dealings.

It further ruled that discrepancies in default dates were curable procedural defects. Accordingly, the rejection of the Section 9 application was set aside and the matter remanded to NCLT Chennai for decision on merits.

The NCLAT found logic in this argument, agreeing that the interest clause made the invoices "running invoices," and thus, computing limitations solely from 7 days after the invoice date was incorrect.

The Tribunal consisted of Judicial Member, Justice Sharad Kumar Sharma and Technical Member, Jatindranath Swain, heard and reviewed the matter.

The NCLAT observed that the discrepancies cited by the NCLT for rejecting the application were not among the specific conditions for rejection enumerated under Section 9(5)(ii) of the I&B Code, 2016. It also stated that a discrepancy in the date of default is generally a rectifiable defect.