NCLAT Fortnightly: Important orders on IBC (Mar 1 – Mar 15, 2026)

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 March 1, 2026, to March 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 Liquidation stage.

1. In Mohd. Zaheer v. Ashu Agencies (Company Appeal (AT) (Insolvency) No. 1526 of 2025), the NCLAT upheld the admission of a Section 9 application filed by an operational creditor for unpaid dues arising out of supply of goods. While upholding the admission, it rejected the defense of novation under Section 62 of the Contract Act, 1872 on the basis of absence of a valid and enforceable substituted contract and observed that the purported no-objection letter could not amount to novation as it was unsupported by consideration and therefore unenforceable. It further held that Section 41 of the Contract Act, 1872 was inapplicable because there was no actual performance of the original promise by a third party and a mere promise or internal arrangement to transfer liability to the owners of the corporate debtor at the time could not discharge the corporate debtor. The NCLAT also reaffirmed that a corporate debtor cannot unilaterally shift its liability to a third party, and such an inter se arrangement between promoters does not bind an operational creditor who was not a party to it.

2. In Sri Bajrang Wind Park Developers v. Inox Wind Infrastructure Services Limited (Company Appeal (AT) (Insolvency) No. 630 of 2024), the NCLAT upheld the rejection of a Section 9 application filed by the operational creditor on the ground of existence of pre-existing dispute prior to the issuance of demand notice. The extensive pre-notice email exchanges between the parties reflected unresolved reconciliation of accounts, disputed deductions on account of liquidated damages, generation loss and idle charges, and disputes regarding invoices raised for multiple projects, which constituted genuine, substantial and non-spurious pre-existing disputes within the meaning of Section 5(6) of the Code. Lastly, it was also observed that the demand notice appeared premature as per Clause 38 of the work orders, which stipulated that default would accrue only upon expiry of 365 days from the date on which the invoice amount fell due, and the demand notice had been issued before such default crystallized on any of the invoices.

1. In Mohammed Ismail Ansari v. Mamta Binani (Company Appeal (AT) (Insolvency) No. 241 of 2026), the NCLAT held that a resolution plan cannot be interfered with when it complies with Section 30(2)(b) of the Code, particularly where operational creditors (including employees) are paid an amount not less than what they would receive in liquidation and not less than the amount payable to similarly situated creditors. The NCLAT held that where the liquidation value of operational creditors is nil, any payment above such value satisfies the statutory requirement. It was further held that statements recorded in prior proceedings regarding payment (such as payment of higher of 12 months’ salary or amount payable to unsecured financial creditors) must be interpreted in line with the actual distribution under the plan, and no violation arises if employees receive more than unsecured financial creditors.

2. In Minita D Raja v. The Cosmos Co-op Bank Limited (Company Appeal (AT) (Insolvency) No. 1799 of 2024), the NCLAT, after observing that Regulation 30A(7) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”) mandates payment of actual expenses till approval by the Adjudicating Authority, held that the Committee of Creditors (“CoC”) cannot deny payment of fees to a resolution professional for the period commencing from the filing of Section 12A withdrawal application. It was further held that the resolution professional is duty-bound to continue managing the affairs of the corporate debtor until formal closure and handover, and such work and responsibility of the resolution professional does not get over after the filing of Section 12A withdrawal application. 

The NCLAT also held that fixation of fees of the resolution professional is the exclusive domain of the CoC and the Adjudicating Authority has no jurisdiction to unilaterally fix, reduce or modify such fees except in limited circumstances provided under the regulations.

3. In IDFC First Bank Limited v. Jai Gokul Towers Private Limited (Company Appeal (AT) (Insolvency) Nos. 848 & 1009 of 2024), the NCLAT held that where an auction sale of the corporate debtor’s property had been duly confirmed prior to the commencement of CIRP, the sale becomes absolute upon such confirmation and title stands vested in the auction purchaser.  It was further observed that the subsequent issuance of a sale certificate is merely evidentiary and does not affect the transfer of title and the Section 14 moratorium does not get attracted basis the issuance of sale certificate post the commencement of CIRP, where the sale had attained finality prior to initiation of CIRP.

4. In Era Infra Engineering Limited v. Era Infrastructure (India) Limited (Company Appeal (AT) (Insolvency) Nos. 1693–1695 & 1697 of 2025), the NCLAT held that approval of a resolution plan in the CIRP of a holding company does not extinguish or eclipse the independent and secured debt of lenders against a subsidiary arising from separate loan agreements. The NCLAT held that liabilities arising from sponsor/shortfall undertakings (treated as unsecured debt in the holding company’s CIRP) are distinct from secured financial debts owed by the subsidiary in its capacity as a principal borrower, and resolution of the former does not discharge the latter.

5. The NCLAT, in Cosmic CRF Limited v. Myotic Trading Private Limited (Company Appeal (AT) (Insolvency) No. 859 of 2025 along with I.A. No. 4810 of 2025), had an occasion to examine the contours of Section 29A of the Code. After observing that Section 29A is a ‘see through provision’ allowing lifting of corporate veil to ascertain the de facto control of the resolution applicant, rather than relying merely on de jure status, such provision needs to be given a purposive interpretation.

In the context of the specific facts of the decision, it was observed that a ‘clean slate theory’ following a prior resolution process of a corporate debtor does not absolve the promoter of such corporate debtor from the disqualification scenarios mentioned under Section 29A. It was also observed that such ‘clean slate theory’ does not wipe off Section 29A(c) disqualification even if the NPA account become standard post approval of the plan.

6. In Suman Chopra v. Chandigarh Overseas Private Limited (Company Appeal (AT) (Insolvency) No. 1331 of 2025), the NCLAT upheld the rejection of a homebuyer's belated claim filed only four days before the CoC meeting convened to vote on the resolution plan, by holding that the claim was inadmissible under Regulations 13(1B) and 13(1C) of the CIRP Regulations  (which states that the resolution professional can only verify and collate claims only up to seven days before the CoC meeting scheduled for approval of the resolution plan). It was also observed that the issuance of a public announcement under constitutes deemed communication under the proviso to Regulation 6A of the CIRP Regulations, when it is not possible to send individual communication, and being unaware of the timelines of the claim management process cannot be deemed. In the process, the NCLAT also rejected the defense raised by the appellant contending that if the liability of the creditor is reflected in the records of the corporate debtor, such claims need to be forwarded to the resolution application for inclusion even if the claim if filed belatedly by observing that such a position has undergone change with Regulations 13(1B) and 13(1C) having come into force with effect from September 18, 2023.

7. In Tejinder Pal Setia v. Chandigarh Overseas Private Limited (Company Appeal (AT) (Insolvency) No. 1348 of 2025), the NCLAT upheld the rejection of the application filed by the suspended management of the corporate debtor seeking to place on record a transaction audit report commissioned by them at their own instance. It was observed that a transaction or forensic audit report commissioned suo motu by the suspended management of a corporate debtor, without the approval of the CoC, lacks credibility as it is akin to a report commissioned by an interested party which is inherently susceptible to conflict of interest and bias, which undermines the integrity of the report. It was further observed that the suspended management has no authority under the Code to appoint a transaction auditor at its own will, and that their appropriate role is limited to participating in and sharing insights with a transaction auditor appointed with CoC approval. The NCLAT also noted that the report was unsigned, unstamped and replete with comprehensive disclaimers that rendered it unreliable and questionable, and that sharing information it had received from the CoC or the resolution professional with such an auditor violated confidentiality of the commercial decisions of the CoC.

1. In Mangalam Global Enterprise Limited v. Catalyst Trusteeship Limited (Company Appeal (AT) (Insolvency) No. 114 of 2025), the NCLAT held that once a resolution plan has been approved and attained finality, all claims not submitted before the resolution professional and not forming part of the resolution plan stand extinguished, and cannot be subsequently enforced. The NCLAT further held that assets of the corporate debtor, including those reflected in the Information Memorandum, vest in the successful resolution applicant, and cannot be withheld on the basis of unsubstantiated or unfiled claims. It was also held that in the absence of any established lien or charge, such assets cannot be treated as encumbered or excluded from the resolution plan. The NCLAT reiterated that post-approval of the resolution plan, no new or belated claims can be entertained, and the successful resolution applicant is entitled to a ‘clean slate.’

2. In Rajeev Khurana v. Chandigarh Overseas Private Limited (Company Appeal (AT) (Insolvency) No. 1332 of 2025), the NCLAT upheld the dismissal of an application filed by an individual homebuyer under Section 60(5) of the Code seeking rejection of allegedly fraudulent claims admitted by the resolution professional, re-verification of the creditor list and an independent forensic audit, holding that a single homebuyer forming part of a class of financial creditors cannot independently maintain such an application without proper authorisation from the class, and will be bound by the collective commercial decision of the majority approving the resolution plan, especially when the intent was not to seek relief from the Adjudicating Authority to secure his own interest, but to exclude the claims of other creditors without even impleading them. It was further observed that allegations of fraud is required to be supported by unimpeachable evidence and not on conjectures, inferences and speculative assertions basis the report of a whistle-blower who himself is not a party in the present matter. When similar allegations had already been raised earlier by the suspended management and stood dismissed, then a claim at a belated stage constituted an attempt to propel roving and fishing enquiries to subvert and unsettle the resolution process. Lastly, the NCLAT observed that disciplinary actions taken by the Insolvency and Bankruptcy Board of India against the resolution professional in other CIRP proceedings for similar misconduct of admission of fraudulent claims are not relevant for invalidation of the claim verification exercise.

3. In Rakshit Dhirajlal Doshi v. Doshion Water Umbrella (Cuddalore) Private Limited (Company Appeal (AT) (Insolvency) No. 1855 of 2025), the NCLAT distinguished the scope of inquiry of preferential transaction under Section 43 of the Code and fraudulent transaction under Section 66 of the Code by overturning the order of the Adjudicating Authority which had classified the withdrawal of remuneration by the suspended directors of the corporate debtor for providing managerial services as fraudulent transactions, holding that to attract Section 66, the burden of proof is high and requires cogent evidence establishing beyond reasonable doubt a deliberate intent to cause wrongful loss to creditors, and that mere suspicion, presumption, or circumstantial inference is insufficient. It was observed that where the resolution professional had itself admitted the remuneration claims of the same directors for a subsequent financial year, it was arbitrary to characterize identical remuneration payments for the preceding period as fraudulent, especially when the services were rendered in the ordinary course of business, were duly reflected in the books of accounts, and no other similarly placed creditors' dues were outstanding. The NCLAT observed that routing of revenue generation of professional services from sister concern of a Corporate Debtor to make the withdrawals is a standard business practice and cannot be viewed as an attempt to siphon off funds. Further, the inability of the corporate debtor to meet its tax obligations when its account was classified as NPA cannot form a ground to defraud creditors or to carry on business with an intent to deceive.

1. In Ramachandran Subramanian v. Tecpro Systems Limited (Company Appeal (AT) (Ins.) No. 267 of 2026), the NCLAT dismissed the appeal preferred by the erstwhile liquidator challenging his replacement, by observing that a liquidator does not possess any personal or vested right to continue in the office, and performance during the tenure, even if commendable, did not create an indefeasible right. It was observed that the liquidator would lack the locus to maintain an appeal as he would not be a ‘person aggrieved’ within the meaning of Section 61 of the Code merely by virtue of being replaced by the Adjudicating Authority.

The NCLAT also examined whether Edelweiss Asset Reconstruction Company Limited ("EARCL") would qualify as a "related party" under Section 5(24) of the Code on the basis of its holding of pledged shares in the corporate debtor. The NCLAT observed that the mere holding of pledged shares, without their invocation, does not vest ownership or voting rights in the pledgee, and hence does not amount to control over the voting rights within the meaning of Section 5(24)(j) of the Code. It further held that the appointment of a board observer for oversight purposes, without any accompanying voting rights, does not amount to management control within the meaning of Section 5(24)(l). The NCLAT also found that the escrow arrangements and advisory monitoring conducted by EY were standard protective measures commonly employed in distressed lending transactions and could not be construed as EARCL having assumed managerial or policy control over the corporate debtor under Section 5(24)(m) of the Code. As regards the IBBI's observation that the resolution professional was "guided by" EARCL in appointing EY, being evidence of control under Section 5(24)(h) of the Code, the NCLAT clarified that this observation pertained solely to concerns about the professional independence of the resolution professional and could not be automatically extended to establish statutory control by a financial creditor. The NCLAT additionally noted that even if EARCL were to be treated as a related party, it would nonetheless be protected by the second proviso to Section 21(2) of the Code, which exempts a financial creditor regulated by a financial sector regulator from being excluded from participation in Committee of Creditors meetings.

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