Annual Corporate Law Case Digests : NCLAT Rulings of 2025 (Part 9)

ICICI Bank's Status as Secured Creditor Upheld: NCLAT Sets Aside NCLT Order Directing Release of Fixed Deposit Collateral

ICICI Bank Lt vs Resolution Professional of Darjeeling Organic Tea Pvt. Ltd

CITATION : 2025 TAXSCAN (NCLAT) 402

The Principal Bench of National Company Law Appellate Tribunal (NCLAT), New Delhi, upheld ICICI Bank’s status as a secured financial creditor, holding that fixed deposits pledged as cash collateral constitute valid security during insolvency proceedings. The Tribunal set aside the NCLT’s earlier direction to release the fixed deposits, allowing the appeal and confirmed ICICI Bank’s right to retain its collateral.

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

The Tribunal, after considering the submissions made, held that the judgment cited by the respondent had no applicability to the present case. It found no waiver by the bank regarding release of fixed deposits held as security for non-fund based facilities extended to the corporate debtor, rendering the impugned order unsustainable.

Post‑Dated Cheques Amount to Acknowledgement of Unpaid Financial Debt: NCLAT Sets Aside NCLT Order Against NBFC

Sinki Commodities Pvt. Ltd vs ABC Floors Pvt. Ltd

CITATION : 2025 TAXSCAN (NCLAT) 403

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has overturned the Kolkata Bench of the National Company Law Tribunal (NCLT),The NCLAT held that post‑dated cheques issued by the corporate debtor amounted to clear acknowledgement of liability and established the existence of unpaid financial debt.

The two-member bench of Ashok Bhushan (Chairperson) and Barun Mitra(Technical Member) highlighted that the essence of financial debt under Section 5(8) is disbursement for “time value of money.”

Even in the absence of a formal sanction letter, the transaction was clearly a commercial borrowing with agreed interest. The NCLAT noted that while RBI guidelines are binding on NBFCs, breach of such guidelines does not erase the existence of financial debt under the IBC, which is a special legislation designed for time‑bound insolvency resolution.

The tribunal also rejected the corporate debtor’s argument that the arrangement had been novated by the issuance of fresh post‑dated cheques extending up to March 2022. Instead, it held that the cheques themselves constituted an acknowledgement of continuing liability. Letters dated 17 September 2019 and 24 September 2019, along with the cheques, demonstrated that the debt remained unpaid and that the debtor recognised its obligation.

In its operative findings, the NCLAT concluded that the financial creditor had successfully proved default. It held that the NCLT erred in rejecting the Section 7 application and set aside the impugned order.

Requirements u/r 25 & 26 of Mediation Rules Satisfied: NCLAT Holds Settlement Agreement Valid

Sonali Prashant Shinde vs Vikram Vilasrao Salunke

CITATION : 2025 TAXSCAN (NCLAT) 404

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has upheld the validity of consent terms executed during mediation in the appellants dispute. The Tribunal, however, found that the agreement was reduced to writing, signed by the parties, and duly submitted by the mediator, satisfying Rule 25. It further held that Rule 26’s 14‑day timeline is directory, not mandatory, and therefore no procedural breach occurred.

The bench of Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) further noted that the appellants had themselves filed applications to revoke the consent terms months after signing them, which were heard together with the mediator’s report.

The NCLT, after considering all submissions, dismissed the applications on 3 October 2023. The NCLAT endorsed this approach, holding that the procedural sequence did not undermine the validity of the settlement.

By linking Rule 25 and Rule 26, the NCLAT underscored that the mediation process had been conducted in accordance with law. The settlement agreement was properly documented, signed, and submitted, and the Tribunal’s subsequent order recorded satisfaction with the settlement.

Non‑Cooperation with RP and Related‑Party Diversions Prove Intent to Defraud Creditors: NCLAT Upholds S.66 Directions Against Directors

Rana Sarkar vs Bimal Agarwal

CITATION : 2025 TAXSCAN (NCLAT) 405

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, has upheld an NCLT Kolkata order directing the suspended directors of Dagcon (India) Pvt. Ltd. to contribute over ₹10.54 crore to the corporate debtor’s assets under Section 66 of the Insolvency and Bankruptcy Code (IBC).

The tribunal held that the pattern of withdrawals, absence of books of accounts, and unexplained related‑party transactions along with non-cooperation with the Resolution Professional demonstrated an intent to defraud creditors, attracting Section 66(1) of the IBC.

The two-member bench comprising Mohd. Faiz Alam Khan (Judicial Member) and Naresh Salecha (Technical Member) rejected these claims, noting contradictions in his statements and the absence of any documentary proof of resignation. The tribunal held that mere denial cannot rebut documentary evidence of withdrawals and related‑party transfers.

Relying on the statutory framework of Section 66, the NCLAT reiterated that fraudulent trading is established when business is carried on with the intent to defraud creditors or for a fraudulent purpose.

Shareholder Has Locus to Challenge Collusive CIRP: NCLAT Holds “Any Person Aggrieved” u/s 61 Must Be Read Widely, Distinguishes Park Energy Case

Balkishan Shrikisan Baldawa vs Agri-Tech (India) Limited

CITATION : 2025 TAXSCAN (NCLAT) 406

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has delivered a detailed and consequential judgment holding that shareholders can be “aggrieved persons” under Section 61 of the Insolvency and Bankruptcy Code (IBC) when alleging collusive and fraudulent initiation of the corporate insolvency resolution process (CIRP).

The ruling not only quashes the CIRP against Techindia Nirman Ltd. but also imposes a penalty of ₹25 lakh on Agri-Tech (India) Ltd., the financial creditor, under Section 65 of the Code.

NCLAT distinguished Park Energy, noting it did not consider the Supreme Court’s broader interpretation. It held that Section 61 explicitly allows appeals by “any person aggrieved,” and that shareholders alleging fraud are directly affected. The Tribunal concluded that Baldawa had locus and the appeal was maintainable.

On merits, NCLAT found the Section 7 petition collusive. It noted that the loan agreement did not align with audited financials, which recorded nil interest and classified the advance as operational. Statutory auditors negated the existence of any written agreement.

The three-membered bench of Mohd. Faiz Alam Khan (Judicial Member), Arun Baroka (Technical Member) and Indevar Pandey (Technical Member) concluded that the CIRP was fraudulently initiated by related parties to wipe out public shareholding.

NCLT to Reconsider Rs. 92 Lakh Penalty Imposed for Non-Holding of AGMs Due to Directorial Deadlock: NCLAT

Tanvi Construction Pvt Ltd & Anr vs Registrar of Companies, Mumbai

CITATION : 2025 TAXSCAN (NCLAT) 407

The Principal Bench of National Company Law Appellate Tribunal (NCLAT), New Delhi, remanded the matter to NCLT Mumbai to reconsider the ₹92 lakh penalty imposed for non-holding of AGMs from 2016 to 2023 and stated that the default arose due to an unintentional deadlock between directors, preventing statutory compliance. Thus, NCLT has been directed to re-examine the penalty after hearing both parties, with the matter listed on 19.11.2025.

The Tribunal consisted of Judicial Member, Justice Yogesh Khanna and Technical Member, Ajai Das Mehrotra, heard and reviewed the matter.

The Tribunal, after considering the material on record, observed that the company's annual profit (Rs. 50 Lakhs) was half the penalty imposed (Rs. 92 Lakhs) for the 7-year default period. Considering this fact, the Tribunal held it appropriate for NCLT to reconsider and decide afresh regarding further reduction of penalty, if any, after hearing both parties.

NCLAT Admits CCI Clarification: WhatsApp Advertising Data Sharing also Subject to Opt‑Out and Revocable Consent

WhatsApp LLC vs Competition Commission of India & Ors

CITATION : 2025 TAXSCAN (NCLAT) 408

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, has delivered a crucial clarification in the ongoing competition law proceedings involving WhatsApp LLC and its parent company Meta Platforms.

By allowing the Competition Commission of India’s (CCI) application, the Tribunal has extended the scope of remedial directions, originally confined to non-advertising data sharing, to also cover advertising-related uses of WhatsApp user data.

NCLAT agreed with the Commission’s interpretation. It clarified that the remedial directions requiring user optionality, revocable consent, and transparency obligations apply to all non‑WhatsApp purposes, including advertising. In effect, the Tribunal closed the gap left by setting aside para 247.1, ensuring that advertising data sharing is not exempt from the safeguards designed to restore user choice.

IBC Fraudulent Trading: NCLAT Directs Suspended Director to Contribute ₹8.71 Crore with 12% Interest to Corporate Debtor

Swapan Kumar Saha vs Ashok Kumar Agarwal

CITATION : 2025 TAXSCAN (NCLAT) 409

The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, upheld the National Company Law Tribunal (NCLT) order directing contribution to the assets of a corporate debtor after finding that a share transaction with a related party was carried out with the intent to defraud creditors.

Addressing the legal issue concerning the scope of Section 66 of the Code, the NCLAT, comprising Justice Ashok Bhushan (Chairperson), Arun Baroka (Technical Member) held that Sections 66(1) and 66(2) operate independently and are not required to be read conjunctively.

The Tribunal observed that Section 66(1) applies where the business of the corporate debtor is carried on with intent to defraud creditors or for any fraudulent purpose, whereas Section 66(2) specifically deals with wrongful trading by directors who knew or ought to have known that insolvency was unavoidable.

On the issue of natural justice, the Appellate Tribunal rejected the appellant’s contention that adequate opportunity of hearing had not been granted. It noted that multiple opportunities were afforded before the Adjudicating Authority and that the impugned order had duly recorded and considered the appellant’s submissions.

NCLAT allows Correction Application, Orders Correction of Errors in Previous Order Pertaining to CIRP Status and Pending High Court Litigation

Sandeep G. Raheja vs Omkara Asset Reconstruction Pvt. Ltd. & Anr. CITATION : 2025 TAXSCAN (NCLAT) 410

The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, has allowed an application seeking correction of inadvertent errors in an earlier order passed in an insolvency appeal. The Bench directed the necessary rectifications to be carried out and a corrected copy of the order be uploaded.

The Appellate Tribunal, comprising JusticeAshok Bhushan (Chairperson) and Barun Mitra (Technical Member), noted the request for correction in the penultimate paragraph of the earlier order, where the words “assertion as undertaken” were sought to be deleted and substituted with the words “Information Memorandum”.

The Tribunal directed a correction in the last paragraph of the order to clarify that in view of the order allowing the correction application, no separate order was required to be passed in the amendment application.