NCLAT Fortnightly: Important orders on IBC (Dec 1 – Dec 15, 2025)

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 December 1, 2025 to December 15, 2025.

For ease of reference, the orders have been categorized and dealt with in the following categories i.e., Pre-admission stage, Corporate Insolvency Resolution Process (“CIRP”) stage, Liquidation and Miscellaneous.

1. In Shri. Chikali Nagaraju v. Ispat Corp Limited (Company Appeal (AT) (Insolvency) No. 1594 of 2025), the NCLAT, after observing that allowing an amendment application to revise the date of default does not curtail the corporate debtor’s right to raise grounds to oppose the application on merit, held that a financial creditor can amend the date of default, which was originally identified to fall within the Section 10A period, when there was material to indicate that default had been committed prior to the Section 10A period. It was further noted that the issuance of demand or recall notices during the Section 10A period does not create a fresh default but merely confirms or crystallises an earlier default.

2. In Zameer Pawan Kumar Agarwal v. Pankaj Prabhudayal Goenka (Company Appeal (AT) (Ins.) No. 1118 of 2025), the NCLAT held that an application filed by a personal guarantor under Section 94 of the Code is governed by the law of limitation, and the right to apply accrues at least from the date of issuance of the recovery certificate or demand notice evidencing default. The NCLAT held that a one-time settlement proposal submitted by the guarantor to the bank does not constitute an acknowledgment under Section 18 of the Limitation Act, 1963 so as to extend the limitation for filing a Section 94 application.

1. In Union Bank of India v. KSL and Industries Limited (Company Appeal (AT) (Ins) No. 121 of 2024), the NCLAT reiterated that while default is relevant for the initiation of CIRP, such default is not necessary for admission of the claim. Accordingly, it held that the claim of a financial creditor against the corporate guarantor would be maintainable even when the corporate guarantee was not invoked prior to the commencement of CIRP, since it was irrelevant whether the cause of action for invoking the guarantee had arisen or not.

2. In Surender Modi v. Vibrant Buildwell Private Limited (Company Appeal (AT) (Ins.) No. 1734 of 2025), the NCLAT held that while claims filed during the COVID-19 exclusion period are not barred by limitation in view of the Supreme Court’s suo motu orders, the Adjudicating Authority and the resolution professional are entitled to examine the authenticity, tenability, and genuineness of the documents forming the basis of such claims. The NCLAT affirmed that amounts reflected in the corporate debtor’s audited financial statements as “Other Advances” or “Other Long-Term Liabilities,” and not as borrowings, do not constitute “financial debt” under Section 5(8) of the Code. It further held that claims based on loan agreements suffering from serious inconsistencies, lack of proper stamping, absence of corporate authorization, and prolonged unexplained inaction in seeking repayment can be rejected as non-bona fide.

3. In UP Jal Vidyut Nigam Limited v. Essar Power M.P. Limited (Company Appeal (AT) (Ins.) No. 19 of 2022), the NCLAT held that where the legality and recoverability of an operational creditor’s invoices are already sub-judice before a High Court prior to the commencement of CIRP, the resolution professional is justified in treating such claims as contingent and admitting them at a notional value under the insolvency regulations, despite Regulation 14 of the CIRP Regulations requiring the resolution professional to make a best estimate of the amount of the claim based on the information available to him. The NCLAT affirmed that a resolution professional has only administrative powers to collate and verify claims and cannot adjudicate disputed claims, and that admitting the full claim amount in such circumstances would amount to usurping the jurisdiction of the High Court.

4. In Balkishan Shrikisan Baldawa v. Agri-Tech (India) Limited (Company Appeal (AT) (Ins.) No. 970 of 2025), the appellant who was the shareholder of the corporate debtor had appealed against the order of the Adjudicating Authority rejecting his application, filed challenging the admission of CIRP by alleging fraud perpetrated by the financial creditor and the corporate debtor, both of whom were related parties. Allowing that appeal, the NCLAT had observed that the initiation of CIRP by a financial creditor and corporate debtor that are related parties under common management, undertaken not for genuine insolvency resolution but to achieve extraneous objectives and circumvent statutory safeguards, attracts Section 65 of the Code.

The significance of this decision, however, lies in the fact that it recognized an independent right of a shareholder to maintain an appeal under Section 61 of the Code as an aggrieved person and deviated from the earlier decision, including the decision in Park Energy Private Limited v. State Bank of India (Company Appeal (AT) (CH) (Ins) No.62/2023), which had questioned the locus of a shareholder to challenge initiation of CIRP.

5. In Rare Asset Reconstruction Company Limited v. VR2 Land Development Private Limited (Company Appeal (AT) (Insolvency) No. 289-291 of 2024), the NCLAT observed that the disqualification of a creditor as a ‘related party’ under the first proviso to Section 21(2) of the Code is attached to the creditor in praesenti and not the debt itself. Hence, when a loan given to the corporate debtor is assigned in good faith to an unrelated independent third-party asset reconstruction company that has no common directors or shareholders with the corporate debtor, the assignee cannot be treated as a related party and be disqualified or restricted from participating in the committee of creditors (“CoC”). It is also noted that the resolution professional can examine whether an assignment has been done with a mala fide intention of circumventing the disqualification.

1. In Ess Dee Aluminium Limited v. Lucky Holdings Private Limited (Company Appeal (AT) (Ins.) No. 186 of 2023), the NCLAT held that where the successful auction purchaser failed to demonstrate readiness and made repeated requests for additional time, the same justified the forfeiture of Earnest Money Deposit (“EMD”), undertaken in accordance with statutory terms. It was further observed that provisions of Section 74 of the Indian Contract Act, 1872, have no application to the forfeiture of EMD in liquidation auctions, as such forfeiture is not in the nature of a contractual penalty but a statutory consequence of default.

2. In Omkara Asset Reconstruction Private Limited v. Chinar Realty Private Limited (Company Appeal (AT) (Ins.) No. 914 of 2025), the NCLAT held that under the Code, the authority to select a liquidator vest solely with the CoC, while the Adjudicating Authority’s role is limited to the formal appointment of the liquidator so selected, subject to confirmation by the IBBI. The NCLAT clarified that Section 34(1) read with Section 34(4)(c) of the Code empowers the Adjudicating Authority only to replace a resolution professional who is unwilling to act as liquidator but does not confer any independent power to appoint a liquidator of its own choice, except in exceptional cases involving fraud, collusion, or gross misconduct undermining the statutory process. It was also observed that the Adjudicating Authority does not have any participatory role in selecting the resolution professional nor is vested with any authority to supersede the CoC’s decision, even where the resolution professional selected by the CoC has not given consent to act as liquidator or is facing disciplinary action.

3. In Anil Limited v. Adani Infrastructure & Developers Private Limited (Company Appeal (AT) (Ins) No. 2316 of 2024), the NCLAT delved into the question of whether a successful auction purchaser would be liable to pay interest on the balance sale consideration for the period of extension granted by the Adjudicating Authority for payment of the sale consideration in a liquidation auction under Section 35 of the Code. Answering the question in the positive, the NCLAT observed that the timeline under Rule 12 of Schedule I to the IBBI Liquidation Process Regulations, 2016 (requiring payment of balance sale consideration within 30 days) is mandatory and not discretionary in nature, and accordingly, an interest of 12% would be levied. It was further observed that when the sale is on an ‘as is where is’ basis, and the tender document clearly stated that the payment timelines are not dependent on any completion of the process of transfer of title, the non-execution of conveyance deed due to attachment of property by the Sales Tax Department could not be taken as an excuse for delay in payment.

4. The NCLAT, in Securities and Exchange Board of India v. Annies Apparel Private Limited (Company Appeal (AT) (Insolvency) No. 1421 of 2024), dealt with the admissibility of a claim arising from a statutory penalty imposed after the liquidation commencement date (“LCD”). In this case, Securities and Exchange Board of India (“SEBI”) had initiated regulatory proceedings prior to liquidation, but the adjudication order imposing a monetary penalty was passed only after liquidation had commenced. The claim filed by SEBI was rejected by the liquidator on the ground that liability had not arisen or crystallised as on the LCD. The view of the liquidator was affirmed by the NCLAT, which had observed that as the statutory scheme freezes liabilities as of the LCD, a claim filed based on an order passed post the LCD cannot be entertained by the liquidator.

Whilst the decision merely reiterates the view long being espoused by NCLAT in several earlier decisions (such as RPFC v. Protocol Marine Service, RPFC v. Gujarat Foils), in our humble view, it is open to criticism for over-reliance on temporal finality.

The decisions treat the LCD date as an absolute cut-off for the existence of claims. While temporal certainty is important in liquidation, the Code itself does not expressly state that only finally adjudicated liabilities as of the LCD may be admitted. Instead, it requires claims to be proved “as on” that date- a phrase capable of encompassing liabilities that have arisen in substance but await formal determination. By equating “not yet adjudicated” with “non-existent,” NCLAT privileges procedural finality over substantive justice. This approach simplifies liquidation but does so at the cost of excluding legitimate liabilities that are merely unquantified at the critical date and goes against the concept of ‘claim’ recognised under the Code, which is defined very broadly as a right to payment, whether or not reduced to judgment, fixed, matured, disputed or undisputed and is not dependent upon crystallisation or final adjudication.

The NCLAT’s refusal to admit SEBI’s claim also overlooks the function of Regulation 25 of the Liquidation Process Regulations, which expressly empowers the liquidator to estimate claims whose amount is not precise due to contingency or other reasons. Where the proceedings were initiated prior to the LCD and were founded on alleged pre-liquidation misconduct, with only the quantification of liability occurring later, in our humble opinion, the liquidator could not have refused such admission without estimating the amount as available on LCD.

We can examine this issue from another perspective. Section 33(5) of the Code implicitly recognises the permissibility of continuation of legal proceedings after a liquidation order, which were pending as on the LCD. However, if the approach espoused by NCLAT has to be applied, such continuation becomes economically meaningless where the proceeding results in a monetary liability after the LCD, which, as per NCLAT, cannot be admitted. This creates a conceptual inconsistency with the Code in permitting adjudication to continue, but refusing to recognise the outcome.

1. In Tahsildar, Kanayannur Taluk v. Mr. Vibin Vincent (Company Appeal (AT) (CH) (Ins) No. 594/2025), the NCLAT observed that the benefit of exclusion of time under Section 12 of the Limitation Act, 1963, cannot be availed when the application to obtain a certified copy of the impugned order is filed after 30 days of the pronouncement of the order.

About the authors: Arka Majumdar is a Partner, Aakriti Garodia and Milind Anand are Associates at Argus Partners.