The following is a snapshot of the important orders passed by the National Company Law Appellate Tribunal (“NCLAT”) under the Insolvency and Bankruptcy Code, 2016 (“Code”) during the period between February 1, 2026 and February 15, 2026.
For ease of reference, the orders have been categorized and dealt with in the following categories i.e., Pre-Corporate Insolvency Resolution Process (“CIRP”), CIRP stage, Post-CIRP stage, and Miscellaneous stage.
1. In Religare Finvest Limited v. Strategic Credit Capital Private Limited (Company Appeal (AT) (Insolvency) No. 398 of 2023), a three-member NCLAT bench dismissed the financial creditor's appeal, ruling that CIRP proceedings under Section 7 of the Code cannot be initiated against a Financial Service Provider (“FSP”) and clarifying that the relevant date for determining FSP status is the date of the underlying financial transaction, not the date the petition is filed.
Interestingly, the decision does not take into account an earlier decision in Equitas Small Finance Bank Limited v. Jumbo Finvest (India) Limited (Company Appeal (AT) (Insolvency) No. 1771 of 2025), where a smaller two-member Bench had held that the relevant date for determination of an FSP status would be the date of filing of the petition. If the principle laid down in the Equitas case were applied to the facts of the instant case, the defence of being an FSP taken corporate debtor would not be applicable, because its NBFC registration was cancelled prior to the date of filing of the petition.
2. In Vinita Agarwala v. Power Pack Steel Industries Private Limited (Company Appeal (AT) (Insolvency) No. 436 of 2022), the NCLAT held that once a financial creditor establishes the existence of a financial debt and default within the meaning of Sections 5(8) and 7 of the Code, the Section 7 application cannot be rejected on the ground that the corporate debtor accepted the amounts in alleged violation of Section 73 of the Companies Act, 2013. The NCLAT held that the corporate debtor cannot take advantage of its own breach of statutory provisions relating to acceptance of deposits to defeat insolvency proceedings. It was further held that Section 73 of the Companies Act does not interdict the repayment of such amounts nor bar initiation of CIRP, and while violations under the Companies Act may attract penalties, they do not render the debt unenforceable under the Code. It was also observed that the existence of a dispute regarding the claim is not a ground to reject a Section 7 application.
3. In Akshay Kumar Bhatia v. Cue Learn Private Limited (Company Appeal (AT) (Ins) No.454 of 2025), the NCLAT observed that where the debt and default under a contract are clouded by a reasonably plausible pre‑existing dispute on interpretation of material terms of the endorsement agreement, such as whether the claim would constitute operational debt under Section 5(21) of the Code or merely damages for breach of contract, CIRP proceedings cannot be initiated as a recovery mechanism under Section 9 of the Code. It was also noted that mere right to claim damages would not constitute any debt within the meaning of an ‘operational debt’, and any such claim for liquidated damages would require adjudication before a competent civil court and cannot be pursued under CIRP.
4. In Srei Equipment Finance Limited v. Roadwings International Private Limited (Company Appeal (AT) (Insolvency) No. 46 of 2025), the NCLAT held that a Section 7 application filed through a duly authorised power of attorney holder is maintainable where such authorisation was validly granted, continued to subsist, and was subsequently ratified by the Implementation and Monitoring Committee and thereafter by the reconstituted board of directors. The NCLAT held that the Resolution Professional / Implementation and Monitoring Committee is empowered under the Code to delegate functions and take assistance of officers or employees of the corporate debtor, including for initiation and conduct of legal proceedings, and such delegation does not violate the principle of delegatus non potest delegare.
5. In Vinodkumar Nihalchand Parmar v. Dee Plone Polyster Private Limited (Company Appeal (AT) (Insolvency) No. 1395 of 2025), the NCLAT held that once the existence of a financial debt and default is established and remains undisputed, technical or procedural defects cannot defeat the initiation of CIRP. The NCLAT held that defects relating to authorisation, non-filing of information utility records, inadequate stamping of documents, non-filing of Section 65B certificate, or non-compliance with Rule 4(3) of the Insolvency and Bankruptcy (Application to Adjudication Authority) Rules, 2016 are curable and do not render a Section 7 application invalid at the admission stage.
1. In RR Securities & Finance Private Limited v. DMC Infrastructure Private Limited (Company Appeal (AT) (Insolvency) No. 2015 of 2025), the NCLAT held that rights arising from a collaboration-cum-redevelopment agreement and an assignment deed, which were expressly contingent upon removal of encumbrances over the subject property, did not mature into enforceable claims when such conditions precedent remain unfulfilled, based on which a claim in CIRP could be admitted. It was further held that a purported corporate guarantee in the form of a unilateral letter, not duly executed with the consent of the principal debtor, guarantor, and creditor, and lacking stamping/ notarization, did not constitute a valid or binding guarantee under Section 126 of the Indian Contract Act, 1872. It was also observed that while disputes involving the authenticity and genuineness of contractual documents do not fall strictly within the remit of the resolution professional, there was nothing unusual on the part of the resolution professional to take notice that there existed grounds for doubting the authenticity and bona fides of the documents based on which claims were raised.
2. In Subrata Sardar v. Central Bank of India (Company Appeal (AT) (Ins.) No. 45 of 2025), the NCLAT held that a corporate guarantor’s liability is co-extensive with that of the principal borrower and not merely contingent, and that describing such liability as “contingent” in the balance sheets does not alter its legal nature nor negate acknowledgment of debt for the purposes of limitation. The NCLAT further held that audited balance sheets reflecting the guarantee liability constitute a valid acknowledgment under Section 18 of the Limitation Act, 1963, thereby extending the limitation for a Section 7 application. Finally, it was held that standard terms of guarantee containing a couple of blank spaces in recital, but not in the operative portion, does not affect the enforceability of such a document.
3. In Jasvinder Singh Makan v. Anish Kumar Sanghi (Company Appeal (AT) (Ins.) Nos. 2025 of 2024 & 735 of 2025), the NCLAT observed that payments credited and routed through a common account of the corporate debtor to discharge the personal loan liability of a related party director within the two-year look-back period preceding the insolvency commencement date would constitute preferential transactions under Section 43 of the Code. The NCLAT affirmed that repayment of unsecured loans to a related party director, at a time when a secured financial creditor had substantial outstanding dues, cannot be characterised as a transaction undertaken in the ordinary course of business within the meaning of Section 43(3)(a) of the Code. It was further held that the source of funds is immaterial for the purposes of Section 43(4), and what is determinative is the effect of the transaction, namely, the reduction in the liability of the corporate debtor towards a related party. Further, it was also reiterated by the NCLAT that the timelines prescribed under Section 35A are directory to guide the resolution professional and not mandatory in nature and non-compliance does not bar the filing or maintainability of an application.
1. In Puro Natural Sugars JV v. Shree Warana Sahakari Bank Limited (Company Appeal (AT) (Insolvency) No. 1003 of 2025), the NCLAT held that once a resolution plan expressly provides for the extinguishment and release of all encumbrances, security interests, liens and attachments over the assets of the promoters, directors and personal guarantors, such a release operates comprehensively and is binding under Section 31 of the Code and a dissenting financial creditor cannot question the adequacy of the amount approved by the CoC for the release of such securities including that of the personal guarantors. The NCLAT clarified that creditors cannot continue recovery or enforcement actions, including attachments under the Maharashtra Co-operative Societies Act, 1960, after the entire debt has been resolved under an approved resolution plan.
2. In Pragiti Construction v. Committee of Creditors of Rancom Healthcare Private Limited (Company Appeal (AT) (Ins.) No. 2330 & 2331 of 2024), the NCLAT observed that the second part of the proviso to Section 30(5) of the Code only vests the voting right in a resolution plan with a financial creditor, and not an operational creditor, even when such operational creditor is the sole member of the committee of creditors (“CoC”). It was further observed that when such sole operational creditor submits and approves his own resolution plan by exercising 100% of the voting rights, such approval would be void ab initio, as it violates the statutory bar under Section 30(5) due to material irregularity, conflict of interest and violation of principles of natural justice, and liquidation of the corporate debtor would be the only recourse in such a scenario.
In our view, NCLAT’s reliance on the literal interpretation on the expression ‘financial creditor’ in the proviso to Section 30(5) fails to take into account that the Code in itself does not recognize that an operational creditor could also be a member of the CoC, which concept is introduced and brought to effect only in terms of Regulation 16 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Accordingly, in our view, the expression ‘financial creditor’ used in the proviso to Section 30(5) should have been given a purposive construction to include any member of the CoC, irrespective of the nature of the debt held by such creditor. In other words, where the CoC comprises solely of operational creditors (such as in the instant case), the purposive interpretation would have allowed even an operational creditor to vote on a resolution plan submitted by such an operational creditor.
3. In Nivaya Resources Private Limited v. Divyesh Desai (Company Appeal (AT) (Insolvency) No. 85 of 2026), the NCLAT observed that once a resolution plan has been approved by the CoC and the Adjudicating Authority, the successful resolution applicant (“SRA”) is bound by it and cannot resile on grounds of uncertainty regarding the status of the lease of the sole asset or on account of a likelihood of adverse action by a third party due to prior breaches after having conducted due diligence, especially where the nature and status of such asset, including its leasehold character and any subsisting breaches was clearly disclosed in the information memorandum and the CIRP process, and relevant legal challenge to the asset's status had already been resolved in the favour of corporate debtor prior to the submission of the plan.
4. In National Bank for Agriculture and Rural Development v. SREI Equipment Finance Limited (Company Appeal (AT) (Insolvency) No. 532 of 2024), the NCLAT observed that by virtue of Section 29 of the NABARD Act, 1981, the sums received by a financial service provider in the repayment or realisation of loans and advances refinanced by NABARD are deemed to be held in trust for NABARD, and such receivables constitute third-party assets which do not form part of the asset pool of the corporate debtor for distribution among creditors under the Code. The NCLAT further held that the mere filing of a claim in a wrong form (Form-C) by NABARD did not amount to a waiver of its statutory rights under Section 29 of the NABARD Act, particularly where the claim was accompanied by a detailed statement of facts asserting such rights, and where NABARD had consistently and repeatedly asserted its entitlement to priority over receivables both before and after initiation of CIRP. It was also held that the obligation to take control and custody of third-party assets separately rested with the administrator under Rule 10 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019, read with the Central government Notification dated January 30, 2020, and it was not incumbent upon NABARD to separately identify the accounts.
1. In Anuj Rana v. Monica (Company Appeal (AT) (Insolvency) No. 2048 of 2025), the NCLAT observed that an appeal under Section 19 of the Contempt of Courts Act, 1971 read with Section 425 of the Companies Act, 2013 is not maintainable against an order dismissing a contempt application in limine, since such order is not issued in exercise of jurisdiction to punish for contempt. Further, it was noted that the secured creditor taking possession of the mortgaged assets of the personal guarantor would not be a violation of the moratorium, since Section 14 of the Code does not protect the property of the personal guarantor nor does it bar proceedings under the SARFAESI Act, 2002 against such property.
2. In Harish Kumar Mittal v. State Bank of India (Company Appeal (AT) (Insolvency) No. 2363 of 2024), the NCLAT held that an appeal by a personal guarantor against an order admitting an application under Section 95 of the Code is maintainable under Section 61 of the Code, notwithstanding that Section 61 falls under Part II of the Code while Section 95 falls under Part III of the Code. It rejected the contention that since Section 61(1) provides that "any person aggrieved by the order of the Adjudicating Authority under this Part may prefer an appeal to the NCLAT," an appeal against an order passed under Part III proceedings could not be maintained under a provision which is itself contained in Part II. It was observed that Section 60(1), which falls in Chapter VI under the heading "Adjudicating Authority for Corporate Persons," expressly designates the NCLAT as the adjudicating authority for insolvency resolution proceedings against corporate persons including their personal guarantors. Since Section 61(1) immediately follows in the same chapter and provides the appellate remedy against orders of the Adjudicating Authority, both provisions must be read harmoniously and not in isolation. To read Section 61(1) as excluding personal guarantors from its appellate remedy would leave them without any avenue of appeal, which could not have been the legislative intent. Accordingly, Section 61 was held to be applicable to orders passed in proceedings under Section 95, which falls under Part III of the Code.
It was additionally held that the existence of a pre-existing dispute is irrelevant for the purpose of admission of an application under Section 95 of the Code. Lastly, it was also noted that even though Section 100 of the Code does not explicitly contemplate a right of hearing being given to the debtor, the Adjudicating Authority can, in compliance with the principles of natural justice, provide the debtor a chance to be heard before arriving at a final decision.
About the authors: Arka Majumdar is a Partner, Aakriti Garodia and Milind Anand are Associates at Argus Partners.