National Company Law Appellate Tribunal judgments

The NCLAT upheld jurisdiction under Section 60(5) IBC to direct buyer's directors to pay Rs. 3 crore in unpaid BPA consideration, piercing the corporate veil to impose personal liability on them as controlling minds. This empowers liquidators to pursue directors personally for unpaid acquisition dues, affirming corporate structure cannot shield controlling persons from contractual obligations in insolvency.

The NCLAT held that a PIN code mismatch in invoices does not rebut the supply presumption under IBC Section 9 when TDS deductions and GST input tax credit establish debt and default, clarifying that minor clerical errors cannot defeat insolvency claims.

The NCLAT held that under Section 154 IBC a bankrupt's estate vests in the trustee immediately, making post-bankruptcy withdrawals unauthorized even if claimed as excluded assets exceeding statutory limits, and affecting personal guarantors and debtors.

The NCLAT Chennai Bench held ESI contributions are trust assets excluded from liquidation estate under IBC Sec 36(4)(a)(i), overturning a plan paying only 1% of the claim and affirming priority for employees' statutory dues in insolvency.

NCLAT Chennai held that at the first-motion stage of a scheme merger under Sections 230-232 of the Companies Act 2013, tribunals cannot reject the scheme merely because shareholders and creditors have not yet voted; the matter must proceed to their approval. The ruling clarifies that premature tribunal interference undermines the statutory merger process and affects companies seeking amalgamations.

This bars parties from using limitation to defeat restoration where counsel’s misconduct caused delay, affecting stakeholders in IBC.

NCLAT Chennai held that the Committee of Creditors may replace a Resolution Professional under Section 22 of the IBC provided the replacement is not contrary to the Code, expunging adverse findings against the former RP and remitting his fee claim to the NCLT for adjudication.

The NCLAT held that Section 238 of the IBC overrides rent control laws, letting a liquidator evict occupants under Section 60(5)(c) without rent control proceedings. This speeds asset recovery in insolvency, affecting liquidators, creditors and occupants.

The NCLAT held that a fraud-initiation claim under Section 65 IBC must be raised before the Adjudicating Authority and cannot be raised for the first time on appeal, forcing parties to raise such allegations at the CIRP stage to avoid belated challenges.

NCLAT ruled that guarantors remain liable for total debt despite deed clause limiting liability to mortgaged property value, upholding DRT’s crystallised debt and confirming that guarantee provisions override security clauses under IBC Section 114.

NCLAT upheld the Swiss Challenge method as a valid share-valuation tool in oppression cases under Sections 241-242 of the Companies Act 2013, stressing that notice must precede any director disqualification and giving family firms way to break deadlocks.

NCLAT ruled that advance payments for undelivered goods qualify as operational debt under Section 9 of the IBC, and that a demand notice sent via FedEx meets procedural requirements if delivery is proven. The decision expands creditors ability to trigger insolvency proceedings and validates courier based notice service.

NCLAT held that circumstantial evidence of removed hypothecated machinery suffices to prove fraudulent trading under Sec 66 IBC, upholding ₹17.23 crore liability against suspended directors, noting a single asset swap can trigger Sec 66 liability in context.

NCLAT held that the IBBI Liquidation Process (Second Amendment) Regulations, 2025 apply prospectively only and cannot affect liquidation already started under the earlier regime. The ruling shields ongoing liquidation from retrospective changes, impacting creditors, liquidators and purchasers.

The NCLAT held that a without-prejudice deposit cannot substitute the mandatory adjudication of debt, default, and maintainability under Section 7 IBC. Setting aside an NCLT order that closed proceedings upon deposit, the tribunal ruled such deposits do not dispense with the creditor's right to a full determination of statutory prerequisites for CIRP initiation.

The NCLAT Principal Bench ruled that Section 60(2) IBC mandates personal guarantor insolvency proceedings to be heard by the same NCLT bench adjudicating the corporate debtor's CIRP. The tribunal upheld the New Delhi Principal Bench's refusal to transfer a guarantor's case to Chandigarh, confirming that jurisdiction vests exclusively with the bench seized of the main corporate insolvency process.

The NCLAT ruled that Section 32A immunity applies to purchasers acquiring a corporate debtor as a going concern during liquidation, extending clean slate protection to the period between the liquidation order and the sale certificate. This shields buyers from pre-existing liabilities and aligns liquidation sales with resolution plan safeguards.

NCLAT rules that a personal guarantor filing a Section 94 application after a SARFAESI possession notice has been issued, and enjoying a two-year interim moratorium, constitutes abuse of process to frustrate secured creditor recovery. The ruling clarifies that the IBC moratorium for guarantors does not override SARFAESI enforcement once possession proceedings have commenced.

The NCLAT upheld Section 7 admission, holding that continuing failure to deliver possession generates a fresh cause of action daily under Section 22 Limitation Act. Pendency of High Court winding-up proceedings does not bar NCLT from admitting a corporate debtor. Homebuyers' claims thus survive limitation through continuing default, and IBC initiation isn't stalled by parallel liquidation petitions.

The tribunal held that where the sole financial creditor is paid in full and the operational creditor accepts enhanced settlement, leaving only CIRP costs unresolved, withdrawal under Section 12A is permissible despite procedural non-compliance with Regulation 30A. The ruling prioritizes commercial resolution over technical defaults, allowing corporate debtors to exit insolvency once all substantive claims are satisfied.

NCLAT quashed NCLT orders directing ED and CBI investigations under Section 213(b) without recording satisfaction of statutory prerequisites or hearing affected parties, holding that procedural safeguards are mandatory before ordering corporate investigations.

The NCLAT ruled that the Adjudicating Authority possesses residuary jurisdiction under Section 60(5)(c) of the IBC to issue consequential directions necessary for implementing a going concern sale during liquidation. The tribunal extended the 'clean slate' doctrine - typically applied in resolution plans - to liquidation proceedings, ensuring that a successful auction purchaser receives the corporate debtor's assets free from encumbrances. This decision clarifies the AA's powers to facilitate liquidation sales and protects buyers from legacy claims, impacting liquidators, successful bidders, and secured creditors.

NCLAT ruled that under Section 61(2) IBC an appeal must be filed within 30 days and only a 15-day condonable period is allowed. Delays beyond 15 days, even with justified reasons, will be rejected, compelling appellants such as home-buyers to act promptly.

By setting aside a ₹1,885 cr inflated claim and correcting the information memorandum, the NCLAT affirmed that a guarantor can claim subrogation rights under the IBC. The ruling tightens claim valuation standards and protects guarantors in corporate insolvency cases.