NCLT Mumbai Grants Interim Protection To Provogue Liquidator From Arrest Over IBC Actions

The National Company Law Tribunal (NCLT) at Mumbai recently protected a liquidator from arrest by the Economic Offences Wing in a dispute arising from actions taken under the Insolvency and Bankruptcy Code.

The tribunal said that section 236 of the Code bars courts from taking cognisance of IBC offences unless a complaint is filed by the Insolvency and Bankruptcy Board of India or the Central Government.

The court, comprising Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer, noted that the allegations against Amit Gupta, the liquidator of insolvent Provogue (India) Ltd., a fashion and apparel company, flowed from his role as an insolvency professional acting under Code.

It observed that “despite same allegations on the applicant in the Disciplinary Committee Proceedings, IBBI has not initiated any criminal proceedings against the applicant. It is pertinent to refer to Section 233 and Section 236 of the IBC,”. It therefore granted interim protection from coercive action.

The case relates to the insolvency and liquidation of Provogue (India) Ltd., which was admitted on to CIRP followed by a plea by Andhra Bank. Amit Gupta was appointed as the resolution professional and later continued as the liquidator. In November 2024, the IBBI Disciplinary Committee cancelled his registration, citing lapses in the liquidation process.

After this, the suspended managing director lodged a fresh FIR, leading the Economic Offences Wing, Mumbai, to register a criminal complaint alleging irregularities in valuation and recovery of assets.

Gupta approached the NCLT under section 60(5) read with section 233 of the IBC. He said his actions were taken in good faith while discharging statutory duties. He also argued that section 236 allows prosecution for IBC offences only on a complaint by the IBBI or the Central Government, and that an FIR by a suspended director was without any lega standing.

The suspended director, however objected to any interim relief, relying on the Supreme Court precedent that IPC offences can be examined even on a private complaint.

The tribunal noted that the issues examined by the IBBI and those forming the subject matter of the FIR were “similar in nature” and arose from acts done under the Code.

It observed that the matter concerned “the role of the applicant as an RP registered with IBBI and offence arising out of the acts done under the Code.” On this basis, it directed that “no coercive step for arrest of the applicant shall be taken till further orders,”.

It further clarified that while the order would not affect proceedings before the sessions court.

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