NCLAT Rules No Grounds to Entertain NTADCL Appeal, Issues Clarification on Right to Defense Against IL&FS [Read Order]
After hearing both sides, the Appellate Tribunal observed that no grounds had been made out to interfere with impugned order passed by the NCLT
![NCLAT Rules No Grounds to Entertain NTADCL Appeal, Issues Clarification on Right to Defense Against IL&FS [Read Order]](https://images.taxscan.in/h-upload/2026/01/01/2116516-nclat-rules-grounds-entertain-ntadcl-appeal-issues-clarification.webp "NCLAT Rules No Grounds to Entertain NTADCL Appeal, Issues Clarification on Right to Defense Against IL&FS [Read Order]")
The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, has declined to interfere with an order of the National Company Law Tribunal (NCLT), Mumbai Bench-I, which rejected applications seeking directions for repayment and initiation of proceedings against an infrastructure financing entity enjoying moratorium protection. While disposing of the appeal, the...
The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, has declined to interfere with an order of the National Company Law Tribunal (NCLT), Mumbai Bench-I, which rejected applications seeking directions for repayment and initiation of proceedings against an infrastructure financing entity enjoying moratorium protection. While disposing of the appeal, the Appellate Tribunal clarified that all legal pleas would remain open if proceedings are initiated before any competent court in the future.
The appeal arose from an order dated June 26, 2025 passed by the NCLT in Company Application Nos. 511 of 2020 and 52 of 2024, filed by New Tirupur Area Development Corporation Ltd., seeking relief in connection with repayment obligations; while another application sought directions for continuation of scheduled payments.
The NCLT rejected both applications by placing reliance on the interim order dated October 15, 2018 passed by the NCLAT, wherein protection was granted restraining the initiation or continuation of proceedings against the infrastructure financing entity. In view of the said interim order, the Adjudicating Authority held that no proceedings could be initiated against the entity.
The Tribunal further observed that the application seeking repayment was in the nature of recovery proceedings, which fell within the jurisdiction of civil courts and not the NCLT.
Aggrieved by the rejection of its application, the appellant approached the NCLAT, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member). During the hearing, it was submitted on behalf of the appellant that although the appeal itself may not be entertained, a clarification should be issued to the effect that if the financing entity initiates proceedings in any court, all legal pleas and defences available to the appellant should remain open.
The respondent submitted that it had no objection to the issuance of such clarification in the event the appeal was not entertained. After hearing both sides, the Appellate Tribunal observed that no grounds had been made out to interfere with the impugned order passed by the NCLT.
Accordingly, while disposing of the appeal, the NCLAT clarified that if any application or proceeding is filed by Infrastructure Leasing & Financial Services Ltd. before any court, it would be open to the appellant to raise all pleas available, and the impugned NCLT order would not preclude the appellant from raising such pleas.
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