Administrative Action - Judicial Review of - Statutory Authorities - Interplay with IBC Moratorium - Held that the constitutional jurisdiction of the High Court under Article 226 is not curtailed by Section 14 of the IBC - The High Court is competent to entertain a writ petition and direct statutory authorities to process a redevelopment proposal in favour of a new developer, even during the pendency of CIRP - Such directions fall in the public law domain and do not encroach upon the NCLT's jurisdiction or offend the moratorium, especially where the corporate debtor has no subsisting contractual or proprietary interest in the project. [Relied on Gujarat Urja Vikas Nigam Ltd v. Amit Gupta and others 2021 7 SCC 209; Embassy Property Developments Pvt. Ltd. v. State of Karnataka and others 2020 13 SCC 308; Para 17, 20] A.A. Estates v. Kher Nagar Sukhsadan Co-Operative Housing Society Ltd., 2025 LiveLaw (SC) 1151 : 2025 INSC 1366

Article 226 - Constitutional Jurisdiction - Judicial Review of Administrative Action - Statutory Authorities - Interplay with IBC Moratorium - Held that the constitutional jurisdiction of the High Court under Article 226 is not curtailed by Section 14 of the IBC - The High Court is competent to entertain a writ petition and direct statutory authorities to process a redevelopment proposal in favour of a new developer, even during the pendency of CIRP - Such directions fall in the public law domain and do not encroach upon the NCLT's jurisdiction or offend the moratorium, especially where the corporate debtor has no subsisting contractual or proprietary interest in the project. [Relied on Gujarat Urja Vikas Nigam Ltd v. Amit Gupta and others 2021 7 SCC 209; Embassy Property Developments Pvt. Ltd. v. State of Karnataka and others 2020 13 SCC 308; Para 17, 20] A.A. Estates v. Kher Nagar Sukhsadan Co-Operative Housing Society Ltd., 2025 LiveLaw (SC) 1151 : 2025 INSC 1366

Companies Act, 2013; Section 212 and 447 - Punishment for Fraud - Investigation into affairs of company by Serious Fraud Investigation Office - Bail, including anticipatory bail, cannot be granted for an offence under Section 447 of the Act 2013 unless twin conditions are satisfied. Section 212 (6) of the Companies Act states that the offences covered under Section 447 are cognisable in nature and no person can be released on bail unless he satisfies the twin conditions, that are: (1) that a Public Prosecutor should be given an opportunity to oppose the application for such release; (2) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that the person is not guilty and is unlikely to commit any offence while on bail. Cryptic orders granting bail without adverting to the facts or the consideration of such restrictive conditions are perverse and liable to be set aside. (Relied: Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1; Union of India v. Kanhaiya Prasad, 2025 LiveLaw (SC) 201; Para 23 – 25)) Serious Fraud Investigation Office v. Aditya Sarda, 2025 LiveLaw (SC) 414 : 2025 INSC 477

Companies Act, 2013; Section 212 (6) and 447 – Code of Criminal Procedure, 1973 – Sections 82, 204 and 438 –Serious Fraud Investigation Office (SFIO) investigated Adarsh Group for illegal loans worth Rs. 1700 crores, alleging fraud and siphoning of funds. Special Court issued bailable and non-bailable warrants and initiated proclamation proceedings against accused for non-compliance. High Court granted anticipatory bail, ignoring mandatory bail conditions under Section 212(6) and 2 accused's absconding conduct. High Court orders set aside as perverse for disregarding legal provisions and Special Court proceedings. Accused directed to surrender. (Para 23 - 30) Serious Fraud Investigation Office v. Aditya Sarda, 2025 LiveLaw (SC) 414 : 2025 INSC 477

Contract Act, 1872 - Section 74 - Inapplicability to Court -Supervised Sales - Doctrine of Approbate and Reprobate - Conduct of Litigant - A forfeiture condition stipulated by the NCLT while granting an extension of time in a liquidation proceeding cannot be equated with a forfeiture clause in a private contract - a defaulting purchaser cannot invoke Section 74 of the Indian Contract Act to seek a refund on the grounds that the stakeholders suffered no actual loss - A party cannot "approbate and reprobate" by acting upon an order (e.g., making partial payments after an extension is granted) and subsequently assailing the conditions of that same order - Appeal dismissed. [Relied on: Kridhan Infrastructure Private Limited vs. Venkatesan Sankaranarayan and others, (2021) 6 SCC 94; Paras 12-19] Shri Karshni Alloys v. Ramakrishnan Sadasivan, 2025 LiveLaw (SC) 1195 : 2025 INSC 1411

NCLT, NCLAT Vacancies must be filled on war footing - RERA must be adequately staffed – Held, dedicated IBC benches with additional strength should be constituted - Services of retired judges may be utilized on ad hoc basis until regular appointments are made - Noted that though such directions were issued earlier also, no effective step has been taken in the ground - Directed the Union Government, within three months, to file a compliance report on measures taken to upgrade NCLT/NCLAT infrastructure nationwide - Recent closure of Chandigarh NCLT and portions of Delhi NCLT due to water seepage in Courtrooms and chambers of members underscores the urgency of robust infrastructural support - Noted that government shall prioritise e-filing, video conferencing and dedicated case management systems for IBS matters. [Para 24] Mansi Brar Fernandes v. Shubha Sharma, 2025 LiveLaw (SC) 903 : 2025 INSC 1110

Oppression and Mismanagement - Share transfer validity – Held, Oppression in company law has no straightjacket definition and takes many forms - Primary element of oppression is a 'lack of probity and fair dealing' that is 'burdensome, harsh and wrongful' and prejudices a portion of its members - While an isolated illegal act may not be oppressive, a series of illegal acts can collectively lead to the conclusion that they are part of a transaction intended to oppress the affected members - In a private limited company, the acts of directors are held to a finer standard to rule out the misuse of power for personal gain - Reducing a majority shareholder to a minority position through a mala fide act of the company or its directors is considered an act of oppression - A gift deed purportedly transferred shareholder's entire stake was found invalid because it violated the company's Articles of Association (AoA) - Clause 16 of AoA restricted share transfers by gift to a specific list of family members, which did not include a motherin-law - Share transfer forms were declared invalid because the share transfer form was signed by the appellant after its validity period had expired - Forms also showed clear overwriting and a mismatch of dates - Upheld the order of NCLT wherein it held the act of ousting appellant who held 98% of shares in company to be fraudulent and restored her directorship and shareholding - All actions of company in serial fashion demonstrate clear oppression and mismanagement in its affairs - Appeal allowed. [Para 29, 34-42, 43-50, 54] Shailja Krishna v. Satori Global Ltd., 2025 LiveLaw (SC) 866 : 2025 INSC 1065

Powers of NCLAT to Review Decisions of Statutory Authority under PMLA – The National Company Law Appellate Tribunal (NCLAT) lacks jurisdiction to exercise judicial review over decisions of statutory authorities under the Prevention of Money Laundering Act, 2002 (PMLA), as such matters fall within the realm of public law. In the present case, the NCLAT, in its order dated 17.02.2020 in Company Appeal No. 957 of 2019, erroneously stayed and declared illegal a Provisional Attachment Order (PAO) dated 10.10.2019 issued by the Directorate of Enforcement (ED) under Section 5 of PMLA, post the approval of a Resolution Plan by the National Company Law Tribunal (NCLT) on 05.09.2019 under the Insolvency and Bankruptcy Code, 2016 (IBC). The NCLAT's reliance on Section 32A of IBC, inserted w.e.f. 28.12.2019, to hold that the ED lacked power to attach assets of a Corporate Debtor post-approval of the Resolution Plan was held to be beyond its jurisdiction. As per the Supreme Court's ruling in Embassy Property Developments Pvt. Ltd. vs. State of Karnataka & Ors. [(2020) 13 SCC 308], neither NCLT under Section 60(5) nor NCLAT under Section 61 of IBC can review decisions under public law, including those under PMLA. Appeals under Section 61 are limited to orders passed by NCLT and, in cases of Resolution Plan approvals under Section 31, only on grounds specified in Section 61(3). Consequently, the NCLAT's findings on the PAO were declared coram non judice, being without legal authority and jurisdiction, especially as the issue was sub judice before the Supreme Court in related appeals. (Para 24 - 31) Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Sections 397 and 398 - Oppression and Mismanagement - Scope of NCLT's jurisdiction – Held, NCLT and its predecessor, the Company Law Board (CLB), have wide jurisdiction to decide on all matters incidental or integral to a complaint of oppression and mismanagement - NCLT is not denuded of its power to provide diverse reliefs simply because a matter involves allegations of fraud, manipulation and coercion that might typically require a full-fledged trial - A literal interpretation of law should be avoided if it would lead a company's total chaos or mismanagement - A court should lean toward a construction of the statute that retains jurisdiction to mold relief to benefit the company and its members - Tribunal's purpose is to bring an end to the matters complained by providing a solution, not to prolong them or to put an end to the company itself. [Paras 29 - 31] Shailja Krishna v. Satori Global Ltd., 2025 LiveLaw (SC) 866 : 2025 INSC 1065

Competition Act, 2002

CCI Act is enacted to establish a regulatory authority to prevent anti-competitive practices, promote competition, protect consumer interests, and ensure freedom of trade - Under Section 26 of the Act, the Commission may direct investigation by the Director General if a prima facie case exists - The DG's report must be forwarded to parties, inviting objections or suggestions before the Commission proceeds further - Section 27 empowers the Commission to pass orders to discontinue anticompetitive agreements or abuse of dominant position and impose penalties up to ten percent of average turnover or income of the preceding three years - Section 48 holds every person in charge of the company at the time of contravention liable unless they prove lack of knowledge or due diligence to prevent it. Directors or officers can also be held liable if contravention occurs with their consent or connivance - The principles of natural justice apply to the Commission's proceedings, and no penalty can be imposed without a show cause notice and opportunity to represent one's case - A single show cause notice based on the DG report suffices; no mandatory second notice with the proposed penalty details is required - The notice is to answer the contravention, not the proposed penalty - The Competition Appellate Tribunal (COMPAT) erred in setting aside penalties imposed on individual office bearers on procedural grounds since notice and opportunity were given in terms of the Act - Kerala Film Exhibitors Federation and its office bearers were held guilty of anti-competitive conduct in violation of Sections 3, 31, and 33b of the Act and imposed penalties - Appeal allowed. [Paras 16, 19, 23-27, 29, 32-34, 38, 47, 61] Competition Commission of India v. Kerala Film Exhibitors Federation, 2025 LiveLaw (SC) 955 : 2025 INSC 1167

Section 4 - The Competition Commission of India (CCI) alleged that Schott Glass India Pvt. Ltd. (Schott India), a dominant player in the market for neutral borosilicate glass tubing used in pharmaceutical packaging, abused its dominant position under Section 4 of the Act, 2002, through exclusionary pricing, discriminatory rebates, and restrictive agreements favoring its joint venture, Schott Kaisha. The CCI found a violation, but the Competition Appellate Tribunal (COMPAT) set aside the order, holding the practices commercially justified and non-anti-competitive. Aggrieved, the CCI appealed to the Supreme Court. Whether volume-based rebates, structured as tiered slabs (2%, 5%, 8%, and 12%) triggered by aggregate annual tonnage purchases and applied uniformly to all customers, constitute an abuse of dominant position under Section 4 of the Act, 2002. Held, COMPAT's order affirmed. Volume-based rebates do not amount to abuse of dominance where they are objectively tied to operational efficiencies, uniformly applied without regard to buyer identity, and mechanically triggered by volume thresholds. Such rebates incentivize stable, high-volume orders essential for amortizing capital costs in continuous-process industries like glass manufacturing, transmitting scale economies to downstream customers without distorting competition. No evidence of market foreclosure was found, as rival converters increased production and imports during the relevant period (2007-08 to 2011-12), and container prices to pharmaceutical companies remained stable. Rebate structures that rise solely with volume, are transparently communicated in advance, and promote efficiency cannot be condemned as "unfair" under Section 4(2)(a) absent proof of exclusionary effects under Section 4(2)(b)(i). Appeal dismissed. Competition Commission of India v. Schott Glass India Pvt. Ltd., 2025 LiveLaw (SC) 557 : 2025 INSC 668

Section 53T - Appeal under - The Competition Commission of India (CCI) alleged that the Respondent, a dominant entity in the relevant market, abused its dominant position by introducing a volume-based rebate scheme structured in four slabs, which allegedly favored its joint venture, Schott Kaisha, thereby distorting competition. The CCI held the Respondent liable for abuse of dominance. On appeal, the Competition Appellate Tribunal (COMPAT) set aside the CCI's order, finding the rebates commercially justified, uniformly applied to all buyers meeting volume thresholds, and non-anti-competitive. Aggrieved, the CCI appealed to the Supreme Court. Issues: 1. Whether the Respondent's volume-based rebate scheme constituted an abuse of dominant position under the Competition Act, 2002, merely due to its market size or structure. 2. Whether competition enforcement should adopt a rigid procedural approach or an effects-based standard, particularly in light of India's economic goals as a global manufacturing hub. 3. The true scope and purpose of the Competition Act—whether it penalizes success and dominance achieved through innovation or protects the competitive process from actual harm. Held: (Affirming COMPAT's order) 1. No Abuse of Dominance: The rebate scheme was non-discriminatory, based solely on purchase volume rather than buyer identity, and accessible to any purchaser meeting the specified slabs. It did not favor the joint venture or disrupt market competition, lacking evidence of anti-competitive effects. Dominance alone, without proof of harm to the competitive process, does not constitute abuse. 2. Effects-Based Standard Essential: Rigid, procedure-driven enforcement detached from market realities discourages long-term capital, innovation, and scale—critical for India's ambition to become a global manufacturing, life-sciences, and technology hub amid protectionist policies elsewhere (e.g., U.S. and Europe). An effects-based approach is a constitutional safeguard against arbitrary restraints on enterprise and a strategic imperative to foster investment and growth. 3. Purpose of Competition Law: The Act is not designed to punish success, market share, or dominance earned through effort and innovation. Its core aim is to preserve the competitive process—ensuring rivals can challenge incumbents on merits, consumers benefit from efficiency, and innovation thrives—without stifling productivity. Penalizing size sans tangible harm would undermine the law, freeze capital formation, and harm the public interest it protects. "Heavy-handed enforcement, divorced from market effects, would discourage the long-term capital and expertise the economy urgently needs. Appeal dismissed; no costs. Competition Commission of India v. Schott Glass India Pvt. Ltd., 2025 LiveLaw (SC) 557 : 2025 INSC 668

Insolvency and Bankruptcy Code, 2016

An arbitral award for claims not included in an approved IBC resolution plan is unenforceable, as such claims are extinguished upon approval under Section 31 of IBC. The Court allowed Electrosteel Steels Ltd.'s appeal against the enforcement of an Micro and Small Enterprises Facilitation Council (MSEFC) arbitral award, ruling it non-executable due to the approved resolution plan settling operational creditors' claims at nil. The Court clarified that objections to an award's execution under Section 47 CPC are permissible if the award is a nullity, independent of a challenge under Section 34 of the Arbitration Act, and that the MSEFC lacked jurisdiction to pass the award post-approval. (Para 50 - 52) Electrosteel Steel v. Ispat Carrier, 2025 LiveLaw (SC) 491 : 2025 INSC 525 : (2025) 7 SCC 773

Article 226 - Delay and Laches - Natural Justice in CIRP - The Court emphasized that the respondent's delay of nearly three years in approaching the High Court, despite being aware of the proceedings, was fatal to their case. The initiation of parallel proceedings under the IBC further undermined the justification for invoking writ jurisdiction. The High Court had set aside the resolution plan on the ground of violation of natural justice due to inadequate notice (less than 24 hours) for a Committee of Creditors (CoC) meeting. The Supreme Court, however, found that the delay in approaching the High Court and the availability of alternative remedies under the IBC rendered the writ petition untenable. Mohammed Enterprises v. Farooq Ali Khan, 2025 LiveLaw (SC) 19

Avoidance Transactions vs. Fraudulent / Wrongful Trading – Distinction Clarified - The Supreme Court elucidated the distinction between avoidance transactions under Chapter III and fraudulent or wrongful trading under Chapter VI of the IBC, 2016. Avoidance transactions, including preferential, undervalued, extortionate credit, and fraudulent transactions, are dealt with under Section 25(2)(j) and can be set aside by the Adjudicating Authority under Sections 44, 48, 49, and 51, focusing on ascertainable properties and persons involved. In contrast, fraudulent or wrongful trading under Section 66 requires a deeper inquiry into the intent behind the corporate debtor's business activities, with the Adjudicating Authority empowered to order contributions to the debtor's assets by individuals knowingly engaged in such activities. The Court emphasized that Section 66 applications are excluded from Section 25(2), operating in distinct situations, and the filing of avoidance applications under Section 26 does not affect insolvency proceedings. (Para 61) Piramal Capital and Housing Finance Ltd. v. 63 Moons Technologies, 2025 LiveLaw (SC) 374 : 2025 INSC 421

CIRP initiated against BPSL (one of RBI's "dirty dozen") on 26.07.2017 by Punjab National Bank - JSW Steel's plan (total ₹19,700 crore: ₹19,350 crore to financial creditors; ₹350 crore to operational creditors vs. ₹733 crore claims) approved by CoC via e-voting (15-16.10.2018); filed with NCLT on 14.02.2019 - NCLT approved on 05.09.2019 with conditions; NCLAT modified/approved on 17.02.2020. Appeals by ex-promoters/creditors (e.g., Sanjay Singhal, Kalyani Transco) challenging procedural lapses/delays. Held, 1. Timelines under S.12 IBC (pre-2019 amendment): Mandatory 180+90=270 days from admission (max. 330 including litigation); RP filed Section 31 application after 1.5 years without extension under Section 12(2) or Regulation 39(4) (15-day pre-maximum filing); Arcelormittal India Private Limited v. Satish Kumar Gupta and Others, (2019) 2 SCC 1 and ESSAR Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta, (2020) 8 SCC 531 followed – Held, plan ex facie invalid; NCLT gravely erred in entertaining / approving post-expiry. 2. Avoidance Transactions (Ch. III IBC): RP statutorily obligated to file applications for preferential / undervalued / extortionate / fraudulent pre-CIRP transactions, especially for "dirty dozen" debtor – Held, RP's failure vitiates process. 3. RP's Other Non-Compliances: No certification of JSW's Section 29A eligibility; unverified Section 30(2) compliance (lawful, priority to operational creditors); Regulation 38(1) violated by prioritizing financial over operational creditors (pre-2019) – Held, RP abdicated duties. 4. CoC's Commercial Wisdom: Must ensure time-bound revival, asset maximization, statutory compliance (Sections 12, 29A, 30(2); Regulation 38 feasibility / viability); not mere rhetoric – Held, CoC approved non-feasible / non-compliant plan; contradictory affidavits (criticized JSW delays, then accepted ₹19,350 crore belatedly) indicate collusion / lack of bona fides, vitiating wisdom. 5. JSW's Delay Tactics: Challenged NCLT conditions via NCLAT appeal; post-NCLAT, delayed 2+ years citing appeal pendency (no stay granted); filed interim applications to prolong – State Bank of India and Others v. Consortium of Murari Lal Jalan and Florian Fritsch and Another, 2024 LiveLaw (SC) 866 followed – Held, mala fide misuse of process; cannot ratify violations or grant leeway for non-implementation; dishonest intent in securing high score via misrepresentation, then stalling amid steel price rise. NCLAT/NCLT orders set aside; JSW plan illegal; process vitiated ab initio. CoC/RP faulted for non-discharge of duties; undue creditor prejudice from delays. (No explicit remand specified; implies re-initiation / fresh compliance.) Reinforces strict timelines, RP/CoC accountability, and zero tolerance for procedural abuse / delays in IBC; prioritizes creditor interests over tactical litigation. (Para 43, 53, 57, 64, 71, 72, 73, 77, 78, 82) Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Condonation of Delay - National Company Law Appellate Tribunal (NCLAT) - Lengthy Orders - Verbose Submissions - The Supreme Court expressed concern regarding the NCLAT's practice of issuing excessively lengthy orders, particularly in applications for condonation of delay, citing a 17-page order in the present case. The Court acknowledged that while detailed orders may sometimes be necessary, it also pointed to the role of "verbose and unnecessary long submissions of the members of the Bar" in contributing to such lengthy adjudications. The Court observed a trend of lengthy submissions and pleadings from legal practitioners before the NCLAT, even in routine matters like condonation of delay. (Para 4) Power Infrastructure India v. Power Finance Corporation Ltd., 2025 LiveLaw (SC) 285

Corporate Insolvency Resolution Process (CIRP) – Resolution Plan – Approval – Timelines – Avoidance Transactions – Commercial Wisdom of CoC – Delay Tactics – Sections 12, 29A, 30(2); Regulations 38, 39(4) IBBI (IRPCP) 2016 – Held, Resolution Plan of JSW Steel for BPSL set aside as illegal and contrary to IBC; mandatory 270-day limit (pre-2019 amendment) violated; RP failed to file avoidance applications, certify eligibility/compliance; CoC exercised no commercial wisdom, took contradictory stands; JSW adopted mala fide delays misusing judicial process; NCLT erred in post-expiry approval; fresh compliance mandated. Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Corporate Insolvency Resolution Process (CIRP) – Section 7 IBC – Financial Creditor – Financial Debt – Cumulative Redeemable Preference Shares (CRPS) – Commercial Effect of Borrowing (Section 5(8)(f) IBC – Held, a holder of Cumulative Redeemable Preference Shares (CRPS) is a shareholder and not a financial creditor and cannot initiate the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against the Corporate Debtor. EPC Constructions v. Matix Fertilizers and Chemicals, 2025 LiveLaw (SC) 1036 : 2025 INSC 1259

Corporate Insolvency Resolution Process (CIRP) initiated against BPSL in 2017 at the behest of Punjab National Bank. JSW's ₹19,700 crore plan—allocating ₹19,350 crore to financial creditors and ₹350 crore to operational creditors (against admitted claims of ₹733 crore)—was approved by CoC, National Company Law Tribunal (NCLT) on September 5, 2019, and National Company Law Appellate Tribunal (NCLAT) on February 17, 2022. However, JSW wilfully delayed implementation for two years post-approval, made misrepresentations to CoC, and contravened plan terms, frustrating IBC objectives. Appeals allowed from operational creditors. Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

CRPS Holder is a Shareholder, Not a Creditor - A CRPS is part of the company's share capital, and the amount paid is neither a loan nor a debt - Difference between Debt and Preference share - Held that Preference shareholders are not in the position of creditors and cannot, as a matter of right, claim a return of their share money except in a winding-up - An unredeemed preference shareholder does not automatically assume the character of a 'creditor' - Held that preference shares are part of the company's share capital and the amounts paid up on them are not loans. Dividends are paid on the preference shares when company earns a profit-if the dividends were paid without profits or in excess of profits made, it would amount to an illegal return of the capital - Amount paid up on preference shares not being loans, they do not qualify as a debt. [Relied on Lalchand Surana vs. M/s Hyderabad Vanaspathy Ltd 1988 SCC OnLine AP 290.; Para 19, 20, 26, 27] EPC Constructions v. Matix Fertilizers and Chemicals, 2025 LiveLaw (SC) 1036 : 2025 INSC 1259

Finality of CIRP Proceedings - The Supreme Court reiterated the importance of timely conclusion of CIRP proceedings, as delays undermine the objectives of the IBC. The Court set aside the High Court's order and directed the Adjudicating Authority to resume the proceedings from the stage they were interdicted and conclude them expeditiously. The Supreme Court allowed the appeals, set aside the High Court's judgment, and restored the resolution plan approved by the CoC. The Adjudicating Authority was directed to expedite the completion of the CIRP proceedings. Mohammed Enterprises v. Farooq Ali Khan, 2025 LiveLaw (SC) 19

Financial Debt - Test of Time Value of Money - Held that for a debt to be classified as a 'financial debt' under Section 5(8) of the IBC, the basic element is that it ought to be a disbursal against the consideration for the time value of money - The requirement of a 'debt' and 'disbursal against consideration for the time value of money' remains an essential part of all sub-clauses of Section 5(8) - The paid-up amounts towards shares, being part of the share capital, do not possess the character of a debt and, therefore, do not fall within the definition of 'financial debt' - Appeals dismissed. [Para 29-42, 47, 48] EPC Constructions v. Matix Fertilizers and Chemicals, 2025 LiveLaw (SC) 1036 : 2025 INSC 1259

Interference with IBC Proceedings via Writ Jurisdiction – Whether the High Court, under Article 226, can halt insolvency proceedings against a personal guarantor at the preliminary stage by determining waiver of liability, bypassing the statutory mechanism under the IBC. Held, the appointment of a Resolution Professional under Section 97 of the IBC to examine and report on the debt (under Section 99) is a mandatory preliminary step. The Adjudicating Authority is not required to ascertain the existence of debt before this stage. The High Court's exercise of writ jurisdiction was erroneous as it: (i) disrupted the statutory process under the IBC, and (ii) prematurely adjudicated the existence of debt, a mixed question of law and fact within the Adjudicating Authority's jurisdiction under Section 100 of the IBC. While High Courts possess judicial review powers, they should not act as the decision-making authority in place of statutory tribunals tasked with adjudicating specific legal and factual issues. The Supreme Court set aside the High Court's order, which had barred insolvency proceedings against a personal guarantor by holding that the guarantor's liability was waived, as it interfered with the IBC's statutory framework. The appellant's application before the Adjudicating Authority was restored, with directions for expeditious disposal, considering the matter's pendency since 2021. [Relied on: Dilip B. Jiwrajka v. Union of India, 2023 LiveLaw (SC) 1010 and Mohammed Enterprises (Tanzania) Ltd v. Farooq Ali Khan, 2025 LiveLaw (SC) 19; Para 9, 11, 12] Bank of Baroda v. Farooq Ali Khan, 2025 LiveLaw (SC) 234 : 2025 INSC 253 : AIR 2025 SC 1591

Issues - 1. Whether the RP discharged statutory duties under IBC and CIRP Regulations during BPSL's CIRP. 2. Whether CoC exercised commercial wisdom in approving JSW's non-compliant plan, and protected creditor interests. 3. Whether JSW's post-approval non-compliance and misrepresentations rendered the plan void. 4. Validity of NCLT/NCLAT approvals under Sections 30(2) and 31(2) IBC. Held: 1. RP's Failure: The RP utterly failed in statutory duties, warranting condemnation for enabling flawed CIRP. 2. CoC's Lapse: CoC abdicated commercial wisdom by approving a plan in "flagrant violation" of mandatory IBC provisions and CIRP Regulations; contradictory stances before Court and acceptance of JSW payments without demur undermined creditor protection. 3. JSW's Conduct: JSW's wilful non-compliance for two years, absent legal impediments, and misrepresentations to secure the bid constituted abuse of process; such delays frustrated IBC's revival objective, vitiating proceedings. 4. Plan's Invalidity: JSW's plan non-conformant with Section 30(2) IBC (e.g., inadequate creditor distributions); NCLT erred in not rejecting it under Section 31(2); NCLAT's judgment perverse and coram non judice. NCLT/NCLAT orders quashed; JSW's plan rejected; liquidation of BPSL directed forthwith. JSW's payments to creditors and equity infusions recoverable per CoC's undertaking (to refund within two months if appeals succeed, as recorded on March 6, 2020). State's appeal (Odisha) on dues dismissed without adjudication. Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Jurisdiction of High Court under Article 226 in Insolvency Matters - Held, the High Court should not exercise its discretionary jurisdiction under Article 226 of the Constitution to interfere with Corporate Insolvency Resolution Process (CIRP) proceedings under the Insolvency and Bankruptcy Code (IBC), 2016, especially when statutory remedies are available. The IBC is a complete code with its own checks, balances, and appellate mechanisms. Mohammed Enterprises v. Farooq Ali Khan, 2025 LiveLaw (SC) 19

Liquidation Process - Private Sale - Regulation 33(2)(d) vs. 33(2)(c) - NCLT Rules, 2016 — Rule 15 — Power to Extend Time and Impose Forfeiture - Supreme Court clarified that a sale initiated after the failure of public auctions and the decision of stakeholders to sell assets at scrap value, which then proceeds via an application for NCLT approval, falls squarely under Regulation 33(2)(d) (sale with prior permission of Adjudicating Authority) rather than Regulation 33(2)(c) - Under Rule 15 - the NCLT has the power to extend time for payment upon such terms as the justice of the case requires - Where a purchaser fails to meet their own committed timelines and seeks extensions, the NCLT is justified in stipulating a forfeiture clause for any future deviations to ensure the expeditious resolution of the liquidation process. Shri Karshni Alloys v. Ramakrishnan Sadasivan, 2025 LiveLaw (SC) 1195 : 2025 INSC 1411

Resolution Plan - Supreme Court disapproved the delay in implementation of the Resolution Plan, holding it was unjustified and contrary to the Code's mandate - Held that payments to financial creditors must precede operational creditors unless otherwise specified in the Resolution Plan, overruling contrary practice - It further found that the Resolution Plan approval freezes claims and bars fresh claims outside the authorized plan, ensuring certainty for the Successful Resolution Applicant - Recognized the dilatory tactics by erstwhile promoters attempting to derail CIRP, imposing costs on frivolous applications and emphasizing the primacy of timely resolution in public interest - Held that commercial decisions of CoCs are binding and beyond judicial review save for limited exceptions enumerated in the IBC - Appeals allowed. [Para 6, 7, 13, 14, 16–18, 46-49, 56-58, 64, 65, 67–68, 120, 134-136, 164-165, 187-190] Kalyani Transco v. Bhushan Power and Steel Ltd., 2025 LiveLaw (SC) 954 : 2025 INSC 1165

Resolution Plan Approval – Commercial Wisdom of Committee of Creditors (CoC) Upheld - The Supreme Court upheld Piramal Capital and Housing Finance Ltd.'s resolution plan for Dewan Housing Finance Corporation Ltd. (DHFL), setting aside the NCLAT's January 2022 order that directed reconsideration of the plan's valuation of ₹45,000 crore in avoidance transactions at a nominal ₹1. The Court affirmed the commercial wisdom of the Committee of Creditors (CoC), which approved the plan with 93.65% votes, emphasizing that NCLAT overstepped its jurisdiction by modifying the plan. Recoveries from avoidance transactions under Sections 43, 45, and 50 were allocated to the CoC, while proceeds from fraudulent trading under Section 66 were assigned to Piramal. Appeals by fixed deposit holders, non-convertible debenture holders (including 63 Moons Technologies), and former promoter Kapil Wadhawan, challenging the distribution mechanism and valuation, were dismissed, as the plan complied with RBI and NHB regulations. The NCLT was directed to decide pending avoidance applications afresh. (Para 102) Piramal Capital and Housing Finance Ltd. v. 63 Moons Technologies, 2025 LiveLaw (SC) 374 : 2025 INSC 421

Section 7 - Limitation Act, 1963 - Section 18 - Acknowledgement of debt - Article 137 of 1st schedule to Limitation Act - NCLAT dismissed application by appellant as time barred, holding that balance sheet did not name creditor and therefore did not qualify as acknowledgment of debt - Whether an entry in the balance sheet for F.Y. 2019-20 constituted a valid acknowledgment of debt under Section 18 of the Limitation Act, 1963, in context of section 7 of IBC – Held, an acknowledgment must relate to a present subsisting liability and indicate jural relationship between parties with an intention to admit such relationship - Intention can be inferred by implication from the admission's nature and surrounding circumstances can be considered - Entries in balance sheets, financial statements of previous years constitute a valid acknowledgement of debt - Even if the name of creditor is not mentioned, still the balance sheets can qualify as acknowledgements under section 18 and it extends period of limitation - Section 238A of IBC makes Limitation Act, 1963 applicable to proceedings under the Code with Article 137 governing 3 year limitation period from the date the right to apply accrues - Appeal allowed. [Paras 22, 33-38, 41] IL & FS Financial Services v. Adhunik Meghalaya Steels, 2025 LiveLaw (SC) 753 : 2025 INSC 911

Section 7 & 5 - Financial creditor - Homebuyer v. Speculative Investor – Held, a genuine homebuyer under the IBC is one who intends to take physical possession of the residential unit, whereas a 'speculative investor' is one who enters a transaction with the sole purpose of generating profits and no intention to obtain possession - the determination of whether an allottee is a speculative investor is a factual inquiry guided by the parties intent, considering factors like the nature of the contract, number of units purchased and presence of assured returns or buy-back clauses - Schemes with assured returns, compulsory buybacks, or excessive exit options are in reality 'finality derivatives masquerading as housing contracts. [Paras 18-20] Mansi Brar Fernandes v. Shubha Sharma, 2025 LiveLaw (SC) 903 : 2025 INSC 1110

Section 7(5)(b) Proviso - Application for initiation of Corporate Insolvency Resolution Process (CIRP) by a financial creditor -Rejection for incompleteness - Mandatory requirement of notice to the applicant to rectify the defect within seven days of receipt of such notice prior to rejection - Held that Notice issued by the Joint Registrar of the NCLT under Rule 28 of the NCLT Rules, 2016 (general scrutiny/defect removal provision) is insufficient and cannot substitute the specific, mandatory notice required under the proviso to Section 7(5)(b) of the IBC - The notice under the IBC must be given to the applicant itself to rectify the defect in the application within seven days of the receipt of such notice - Service on an authorised representative, while permissible under Rule 38(5) of the NCLT Rules, was held insufficient to satisfy the mandate of the IBC in this context, as the IBC is the substantive legislation. [Relied on Dena Bank vs. C. Shivakumar Reddy and another, (2021) 10 SCC 330; Paras 11-16] Livein Aqua Solutions v. HDFC Bank, 2025 LiveLaw (SC) 1135 : 2025 INSC 1349

Section 79 (15) - "excluded debts" - Damages awarded by NCDRC for deficiency in service fall under "excluded debts" under Section 79(15) of IBC, thus not covered by moratorium. The definition of "excluded debts" under Section 79(15) of the IBC, which includes fines and statutory penalties, reinforces that such liabilities remain enforceable despite an ongoing insolvency process. (Para 32 & 33) Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth, 2025 LiveLaw (SC) 284 : 2025 INSC 314 : (2025) 4 SCC 629

Section 8 and 9 - Corporate Insolvency Resolution Process (CIRP) - Pre-existing Dispute - Moonshine Defence - Supreme Court set aside the NCLAT judgment which had dismissed an operational creditor's Section 9 application on the grounds of a "pre-existing dispute" - Held that a dispute must be "substantial and not mere moonshine" to warrant rejection of a CIRP application - In this case, the Corporate Debtor (CD) had explicitly confirmed its ledger account showing a debt of shortly before the demand notice - The CD continued making payments even after raising minor grievances in correspondence, which negated the existence of a bona fide dispute - Clarified that the adjudicating authority must "separate the grain from the chaff" and reject spurious or illusory defenses. Saraswati Wire and Cable Industries v. Mohammad Moinuddin Khan, 2025 LiveLaw (SC) 1200 : 2025 INSC 1410

Sections 8 and 9 - Operational creditor (Visa Coke Limited) supplied coke to corporate debtor (Mesco Kalinga Steel Limited) and issued demand notice dated 31.03.2021 under Section 8 IBC to debtor's KMP at registered office, claiming unpaid operational debt. Debtor neither repaid nor disputed debt within 10 days. Operational creditor filed Section 9 petition before NCLT, which dismissed it holding notice invalid as not addressed directly to corporate debtor. NCLAT upheld dismissal. During pendency, debtor sought settlement (unfruitful) but showed no prejudice from service on KMP. Operational creditor appealed to Supreme Court. Held, Section 8 mandates delivery of demand notice to "corporate debtor" but does not prescribe mode; service on KMP at registered office, addressed in official capacity and demanding payment from debtor, achieves statutory object without procedural irregularity causing prejudice. Notice deemed served on corporate debtor. Technical rejection of Section 9 petition unsustainable; appeal allowed. (Paras 14-18) Visa Coke v. Mesco Kalinga Steel, 2025 LiveLaw (SC) 505 : 2025 INSC 597 : (2025) 9 SCC 461

Sections 8 and 9 - Purpose of notice - to afford opportunity to corporate debtor to repay operational debt or raise genuine dispute - is fulfilled where notice explicitly demands payment from corporate debtor and no prejudice is demonstrated by debtor due to mode of service. Substantive rights of operational creditor ought not to be defeated on mere technicalities. NCLT/NCLAT orders rejecting Section 9 petition on ground of non-service directly on corporate debtor set aside; matter remanded to NCLT for adjudication on merits. (Para 14) Visa Coke v. Mesco Kalinga Steel, 2025 LiveLaw (SC) 505 : 2025 INSC 597 : (2025) 9 SCC 461

Sections 8 and 9 - Service of demand notice under Section 8 on Key Managerial Personnel (KMP) of corporate debtor at its registered office - Validity of – Held, Delivery of demand notice under Section 8 to KMP of corporate debtor, in their official capacity at registered office, constitutes substantial compliance with statutory requirement and amounts to deemed service, thereby validly triggering insolvency resolution process under Section 9. (Para 14) Visa Coke v. Mesco Kalinga Steel, 2025 LiveLaw (SC) 505 : 2025 INSC 597 : (2025) 9 SCC 461

Section 9 - Delay in filing application – Held that NCLAT erred in attributing delay to the operational creditor for waiting from August 2021 to February 2023 to file the Section 9 application - Supreme Court noted that a separate CIRP was already active against the CD during this period, and the creditor had correctly attempted to lodge its claim with the then-Interim Resolution Professional - The creditor filed its own application only after a withdrawal application was moved in the earlier CIRP - Appeal allowed. [Relied on Mobilox Innovations Private Limited vs. Kirusa Software Private Limited (2018) 1 SCC 353; IBA Health (India) Private Limited vs. Info-Drive Systems Sdn. Bhd. (2010) 10 SCC 553; Tata Consultancy Services Limited vs. SK Wheels Private Limited (2022) 2 SCC 583; Paras 10-20] Saraswati Wire and Cable Industries v. Mohammad Moinuddin Khan, 2025 LiveLaw (SC) 1200 : 2025 INSC 1410

Section 14 & 17 - Where the cause of action for an offence under Section 138 NI Act arises after the imposition of a moratorium under Section 14 IBC, proceedings under Section 138 of the NI Act cannot be initiated against the Director of the Corporate Debtor. Upon the imposition of a moratorium and the appointment of an Interim Resolution Professional (IRP) under Section 17 of the IBC, the management of the Corporate Debtor vests in the IRP, and the powers of the Board of Directors are suspended. Consequently, the Director lacks the capacity to fulfil the demand raised by a notice under Section 138 NI Act. The judgment in P. Mohan Raj v. M/s Shah Brothers Ispat Pvt. Ltd. (2021) 6 SCC 258 is distinguishable, as in that case, the cause of action under Section 138 NI Act arose before the imposition of the moratorium. Proceedings under section 138 of the NI Act are quashed, when the cause of action arises after the imposition of moratorium, and the director of the company has been suspended from his duties, and the IRP has taken over the management of the company. (Para 11 - 13) Vishnoo Mittal v. Shakti Trading Company, 2025 LiveLaw (SC) 314 : 2025 INSC 346 : AIR 2025 SC 1741 : (2025) 9 SCC 417

Section 14 and 96 - Distinction between the moratorium applicable to a corporate debtor under Section 14 of the IBC and the interim moratorium applicable to individuals and personal guarantors under Section 96 of the IBC - The former is much broader in scope and stays all proceedings against the corporate debtor, including execution and enforcement actions. However, Section 96 of the IBC is more limited in its scope, staying only "legal actions or proceedings in respect of any debt." Unlike corporate insolvency proceedings, where the goal is a comprehensive resolution of the company's liabilities, individual insolvency proceedings are designed primarily for restructuring personal debts and providing relief to the debtor. The legislative intent behind limiting the scope of the interim moratorium under Section 96 of the IBC must be respected, and a blanket stay on all regulatory penalties would result in defeating the objectives of consumer protection laws. (Para 30) Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth, 2025 LiveLaw (SC) 284 : 2025 INSC 314 : (2025) 4 SCC 629

Sections 14, 238 - Moratorium under Section 14 of IBC does not bar property attachments under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act). The MPID Act, enacted under the State List, enables recovery for victims of financial fraud through asset attachment, and such vesting with the State Competent Authority is unaffected by the IBC moratorium. No inconsistency exists between the IBC and MPID Act, negating claims of repugnancy under Article 254 of the Constitution. Arising from the 2013 NSEL scam involving ₹5,600 crore in defaults, the case involved a challenge to property attachments under the MPID Act during an IBC moratorium. The Court, exercising its powers under Article 142, upheld the actions of a Supreme Court appointed Committee in executing decrees and distributing proceeds from attached properties to ensure equitable distribution to depositors, despite the IBC moratorium. Section 238 of the IBC was held inapplicable due to the absence of conflict between the two statutes. (Paras 48, 51, 52) National Spot Exchange Ltd. v. Union of India, 2025 LiveLaw (SC) 577 : 2025 INSC 694 : (2025) 8 SCC 393

Sections 30(2) and 33(1) - the Supreme Court set aside the approval of JSW Steel Ltd.'s resolution plan for the corporate debtor, Bhushan Power & Steel Ltd. (BPSL), holding it illegal, non-compliant with Section 30(2) IBC, and vitiated by the Resolution Professional's (RP) dereliction of statutory duties and the Committee of Creditors' (CoC) failure to exercise commercial wisdom. The Court ordered immediate liquidation of BPSL under Section 33(1) IBC, invoking Article 142 of the Constitution to prevent further abuse of process. Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Sections 31, 32A, 60, 61 – Companies Act, 2013 – Sections 408, 410 – Prevention of Money Laundering Act, 2002 (PMLA) – Provisional attachment of assets – Jurisdiction of NCLT/NCLAT – Judicial review under public law – Interference with statutory authorities – Held, the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT), being creatures of the Companies Act, 2013, and exercising circumscribed jurisdiction under the IBC, lack the power to review or interfere with actions of statutory authorities like the Enforcement Directorate (ED) under the PMLA, which operates in the realm of public law. Such interference, including staying provisional attachment orders post-approval of a resolution plan under Section 32A IBC or declaring investigations abated, exceeds their statutory mandate and renders findings coram non judice. The phrase "arising out of or in relation to the insolvency resolution" in Section 60(5)(c) IBC does not encompass judicial review of public law decisions by government or statutory bodies. [Referred: Embassy Property Developments Pvt. Ltd. v. State of Karnataka, (2020) 13 SCC 308, Para 27, 30] Kalyani Transco v. Bhushan Steel and Power Ltd, 2025 LiveLaw (SC) 524 : 2025 INSC 622

Section 31 - Contempt of Court - JSW Steel Ltd., successful resolution applicant (SRA) for a corporate debtor under IBC, faced demand notices from Chhattisgarh tax authorities for pre-resolution plan dues (GST and other taxes) despite NCLT approval of the plan under Section 31. Authorities had not filed claims during resolution process and were aware of binding precedent in Ghanshyam Mishra and Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 (covering JSW's case). JSW filed contempt petition alleging willful disobedience. Whether issuance of demand notices for extinguished pre-plan statutory claims post-NCLT approval amounts to contempt, and whether authorities entitled to benefit of doubt despite non-participation in NCLT proceedings. Held; Reaffirming Ghanshyam Mishra, all stakeholder claims (including statutory dues to Central/State governments or local authorities) not part of approved resolution plan stand extinguished from approval date; no proceedings can continue or initiate thereon. Echoing Essar Steel, (2020) 8 SCC 531 SRA cannot face "undecided" post-approval claims, as all must be submitted to RP/CoC for finality. Demands were "totally contemptuous" as authorities proceeded despite notice of binding precedent; non-participation in NCLT does not exempt binding effect of approved plan. However, accepting unconditional apology and good faith contention (first post-Ghanshyam Mishra enforcement case), no punishment imposed; benefit of doubt extended. Demand notices and recovery proceedings quashed; petition disposed. (Para 17, 22, 27) Jsw Steel v. Pratishtha Thakur Haritwal, 2025 LiveLaw (SC) 361 : 2025 INSC 401 : (2025) 9 SCC 673

Section 31(1) – Effect of Resolution Plan Approval - Post-Resolution Income Tax Demand - Held, once a Resolution Plan is approved by the Adjudicating Authority, all claims not included therein, including statutory dues owed to the Central Government, stand extinguished. (Para 8) Vaibhav Goel v. Deputy Commissioner of Income Tax, 2025 LiveLaw (SC) 330 : 2025 INSC 375 : (2025) 8 SCC 511

Section 31(4) proviso - Approval of the resolution plan - A resolution plan under the Insolvency and Bankruptcy Code, containing a proposed combination (a merger or amalgamation of entities), should only be placed before the Committee of Creditors (CoC), after it has been approved by the Competition Commission of India (CCI). Independent Sugar Corporation v. Girish Sriram Juneja, 2025 LiveLaw (SC) 126

Section 31(4) proviso - Mandatory Nature of CCI Approval - Literal Interpretation - Whether the approval of the Competition Commission of India (CCI) for a proposed combination must be obtained prior to the approval of a resolution plan by the Committee of Creditors (CoC) under Section 31(4) of the Insolvency and Bankruptcy Code (IBC), 2016. Whether the proviso to Section 31(4) of the IBC, which mandates CCI approval before CoC approval, is mandatory or directory. Held, the proviso to Section 31(4) of the IBC is mandatory, requiring CCI approval for combinations before the CoC approves the resolution plan. The legislative intent was to ensure that combinations do not adversely affect competition, and thus, prior CCI approval is essential. The Court rejected the purposive interpretation argued by AGI Greenpac and upheld a literal interpretation of the proviso, stating that the language is clear and unambiguous. The Court noted that the proviso creates an exception for combinations, requiring stricter compliance. Independent Sugar Corporation v. Girish Sriram Juneja, 2025 LiveLaw (SC) 126

Section 31(4) proviso - Procedural Lapses - Consequences of Non-Compliance - Whether procedural lapses in the CCI's approval process, including the failure to issue a show cause notice to the target company, vitiate the approval of the combination. The Court found that the CCI's failure to issue a show cause notice to the target company (HNGIL) was a procedural lapse. However, it did not vitiate the CCI's approval, as the Resolution Professional (RP) did not object to the process. The Court set aside the approval of AGI Greenpac's resolution plan, as it was approved by the CoC without the requisite CCI approval. The Court directed the CoC to reconsider INSCO's resolution plan and any other plans that had obtained CCI approval as of the date of the CoC's original approval. Independent Sugar Corporation v. Girish Sriram Juneja, 2025 LiveLaw (SC) 126

Section 31(4) proviso - The appeal arose from the Corporate Insolvency Resolution Process (CIRP) of Hindustan National Glass and Industries Ltd. (HNGIL), a major player in the glass packaging industry. AGI Greenpac Ltd., the successful resolution applicant, proposed a combination with HNGIL, which would result in a significant market share in the glass packaging industry, raising concerns of an Appreciable Adverse Effect on Competition (AAEC). The appellant, Independent Sugar Corporation Ltd. (INSCO), challenged the approval of AGI Greenpac's resolution plan, arguing that the CCI's approval was not obtained prior to the CoC's approval, as required under the proviso to Section 31(4) of the IBC. The National Company Law Appellate Tribunal (NCLAT) held that while CCI approval is mandatory, the requirement to obtain it prior to CoC approval is directory, not mandatory. The Supreme Court allowed the appeal, holding that the proviso to Section 31(4) of the IBC is mandatory, and CCI approval must be obtained before the CoC approves a resolution plan containing a combination. The Court emphasized the importance of adhering to statutory timelines and procedural requirements to ensure the integrity of the insolvency resolution process and competition law. The Court underscored the importance of maintaining a balance between the objectives of the IBC and the Competition Act, ensuring that the resolution process does not distort market dynamics. The Court highlighted that conditional approvals, such as the divestment of assets, must be rigorously monitored to prevent anti-competitive practices. The Court reiterated that procedural safeguards are non-negotiable and must be strictly followed to ensure fairness and transparency in the regulatory process. Independent Sugar Corporation v. Girish Sriram Juneja, 2025 LiveLaw (SC) 126

Section 61 - National Company Law Appellate Tribunal (NCLAT) Rules; 2016 - Rule 22 - The incident which triggers the running of the limitation period under the IBC is the date of pronouncement of the Order and in case of non-pronouncement of the Order when the hearing concludes, the date on which the Order is pronounced or uploaded on the website. Where the judgment was pronounced in open Court, the period of limitation starts running from that very day. However, the party is entitled to exclude the period, as per Section 12(1) of the Limitation Act 1963, during which the certified copy of the order was under preparation on an application filed by that party. When a party does not apply for certified copy, the period of limitation would start from the very next day of pronouncement of the order as the date of the pronouncement of order is excluded as per Section 61. Exemption from filing of certified copy cannot be claimed as a matter of right in terms of the statutory requirements of the Rules. The benefit of Section 12(2) of the Limitation Act is available only on an application for grant of certified copy of the Order having been filed till the date of preparation of the said certified copy. Since no such steps have been taken by the appellant for applying the certified copy, the appeal was beyond limitation. (Para 24 - 27) A. Rajendra v. Gonuganta Madhusudhan Rao, 2025 LiveLaw (SC) 392 : 2025 INSC 447

Section 61(2) - Condonation of Delay - Limitation - Hyper-technical Approach - Foreign Company – Held, while timelines under the IBC are crucial, a hyper-technical approach by the National Company Law Appellate Tribunal (NCLAT) can lead to undue delays, defeating the purpose of the Code. In a case where an appeal was e-filed within the permissible 15-day condonation period under Section 61(2) of the IBC, but the hard copy was filed after a weekend holiday, the delay adequately explained. The appellant's status as a foreign company, the NCLAT should have exercised discretion and condoned the delay. The Court set aside the NCLAT's order rejecting the condonation of delay and directed the NCLAT to proceed with hearing the appeal on merits. (Para 2, 5 & 6) Power Infrastructure India v. Power Finance Corporation Ltd., 2025 LiveLaw (SC) 285

Section 61(2) - The National Company Law Appellate Tribunal (NCLAT) lacks jurisdiction to condone delays in filing appeals beyond the 45-day limit (30 days + 15 days condonable) prescribed under Section 61(2) of the IBC. The limitation period commences from the date of order pronouncement, rejecting the respondent's contention that it began later due to disclosure to the stock exchange. The appeal, filed on 24.05.2022, was time-barred as it exceeded the 45-day limit ending on 22.05.2022, with no relief under Section 4 of the Limitation Act, 1963, as the initial 30-day period ended on a working day (07.05.2022). NCLAT cannot condone delays beyond 15 days, even on equitable grounds, to uphold the IBC's time-bound appellate framework. The appeal was allowed, reinforcing the strict limitation regime under the IBC. [Relied on: Kalpraj Dharamshi v. Kotak Investment Advisors Ltd., (2021) 10 SCC 401 (Paras 10-13) Tata Steel Ltd. v. Raj Kumar Banerjee, 2025 LiveLaw (SC) 542 : (2025) 9 SCC 483

Section 62 – Appeal - Section 14 - Moratorium - IBC Moratorium doesn't bar voluntary surrender of corporate debtor's leased property to lessor if retaining the asset is deemed unviable and the Committees of Creditors (CoC) endorses decision - Held that commercial wisdom of the CoC should be given primacy during CIRP (Corporate Insolvency Resolution Process) - this case was distinguished from a simple recovery of property barred by Section 14(1)(d) of the IBC, as the CoC and Resolution Professional themselves desired to return the property due to adverse financial implications of retaining it - The respondent was stalling the process for “undisclosed and extraneous reasons” - Section 14(1)(d) of the IBC states that once the adjudicating authority, by order, declares a moratorium, it would prohibit, amongst other acts, the recovery of any property by an owner or lessor where such property is occupied by or is in the possession of the corporate debtor - Set aside NCLAT's order and restored NCLT's order. [Paras 9, 10] Sincere Securities v. Chandrakant Khemka, 2025 LiveLaw (SC) 774 : 2025 INSC 931

Section 62 - Corporate Insolvency Resolution Proceedings (CIRP) - The Supreme Court quashed the NCLT and NCLAT judgments approving the Resolution Plan and directed initiation of liquidation proceedings - It was held that the Resolution Plan was not in conformity with statutory provisions, particularly Sections 30(2) and 31(2) of the IBC - The Court clarified the concept of "person aggrieved" under Section 61 of the IBC, including personal guarantors and erstwhile promoters, who have locus standi to challenge Resolution Plans - Held the strict timelines mandated by Section 12 of the IBC for completion of CIRP to avoid delays that frustrate the Code's objective of timely insolvency resolution - The Court reiterated the non-justiciability of the commercial wisdom of CoCs (Committee of Creditors) in approving Resolution Plans - Supreme Court held that the CoC loses authority upon approval of the Resolution Plan by the Adjudicating Authority, and the "erstwhile CoC" has no statutory recognition postapproval. Kalyani Transco v. Bhushan Power and Steel Ltd., 2025 LiveLaw (SC) 954 : 2025 INSC 1165

Section 62 - Whether the claim of appellants which was verified and included in the list of creditors, should be treated as 'belated claimants' under Clause 18.4 of the Resolution Plan, entitling them to only a 50% refund and whether they are entitled to possession of their apartment – Held, once a claim is verified and admitted by the Resolution Professional (RP), it cannot be treated as 'belated' to deny substantive relief under a resolution plan - Noted that central issue did not hinge on whether the appellants initial physical claim was validly filed on Jan 11, 2019 - the undisputed fact was that the appellants' claim was resubmitted on February 7, 2020 and was subsequently verified by the Resolution Professional and included in the published list of financial creditors - Once a claim is verified and incorporated into the list of creditors, it gains full legal recognition within the CIRP - The appellants' case did not fall under Clause 18.4 of Resolution Plan, which is a 'residuary' clause for claims that were not filed, not verified, or not communicated to the resolution applicant - Since the appellant's claim was verified and admitted, it was to be treated under Clause 18.4(ii) read with Clause 18.4 (vi)(a), which applies to allottees with verified and admitted claims and provides for the delivery of possession or an equivalent alternative unit - The Resolution Plan itself distinguishes between verified claims and belated or unverified claims- Relegating the appellants, who had paid a substantial amount and had their claim admitted, to the status of a mere refund claimant would be a misapplication of the plan and would undermine the purpose of the IBC - It would be unjust to deny possession to bona fide homebuyers who have paid a significant amount and had their claim duly verified and admitted - Appeal allowed and directed Resolution applicant to execute the conveyance deed and hand over possession of the flat to the appellants. [Paras 32 - 38] Amit Nehra v. Pawan Kumar Garg, 2025 LiveLaw (SC) 882 : 2025 INSC 1086

Section 95 and 96 - Whether the execution of penalty orders imposed by the NCDRC can be stayed during an interim moratorium under IBC. The appellant, a real estate developer, faced multiple penalties (27 in total) imposed by the NCDRC for failing to deliver possession of residential units to homebuyers within the agreed timeline. The appellant sought a stay on the penalty proceedings, citing an interim moratorium triggered under Section 96 of the IBC due to insolvency proceedings initiated against them under Section 95 of the IBC. The NCDRC rejected the application, holding that consumer claims and penalties do not fall within the moratorium under the IBC. Held, regulatory penalties imposed under the Consumer Protection Act for non-compliance with consumer rights do not fall 2 within the scope of the interim moratorium under Section 96 of the IBC. The decision reinforces the distinction between debt recovery proceedings and regulatory actions, ensuring that consumer protection mechanisms remain effective even during insolvency proceedings. (Para 37) Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth, 2025 LiveLaw (SC) 284 : 2025 INSC 314 : (2025) 4 SCC 629

Section 96 - Consumer Protection Act, 1986; Section 27 – Penalties imposed by the NCDRC are regulatory and punitive in nature, aimed at ensuring compliance with consumer protection laws, and do not fall within the definition of "debt" under the IBC. The interim moratorium under Section 96 of the IBC applies only to debts and does not extend to regulatory penalties or criminal proceedings. The Court distinguished between civil debt recovery proceedings and regulatory penalties, emphasizing that the latter serve a public interest function and cannot be stayed under the IBC moratorium. The Court rejected the appellant's reliance on precedents related to Section 138 of the Negotiable Instruments Act, noting that penalties under the Consumer Protection Act are distinct and serve a different purpose. The appeal was dismissed, and the appellant was directed to comply with the NCDRC's penalty orders. (Para 29, 38, 40) Saranga Anilkumar Aggarwal v. Bhavesh Dhirajlal Sheth, 2025 LiveLaw (SC) 284 : 2025 INSC 314 : (2025) 4 SCC 629

Provincial Insolvency Act, 1920; Section 37 - Annulment of Insolvency and Initial Litigation - The insolvency process was annulled after liabilities were discharged under Section 35 - Supreme Court stayed the district court's transfer order - After remand, the District Court dismissed the transfer application and directed cancellation of the sale deed executed by the official receiver - Supreme Court emphasized the duty of appellate courts to carefully examine trial court's factual findings, interfere only on material irregularity or evidential flaws, and provide detailed reasons when reversing findings of fact - Supreme Court restored the District Court's judgment dismissing the transfer application and cancelled the sale deed executed by the official receiver – Held, Section 37 of the Act states that completed, final, lawful transactions done by the Insolvency Receiver should remain valid even if the insolvency is later annulled - The High Court had erred in assuming that the 1983 transfer deed was final and beyond challenge - Section 37 protects only those transactions which are validly and conclusively carried out during insolvency - A transfer that is based on fabricated documents or on an order which is later annulled cannot be treated as “duly made” and therefore cannot be shielded under the saving clause. [Paras 15-18, 25, 27-29] Singamasetty Bhagavath Guptha v. Allam Karibasappa, 2025 LiveLaw (SC) 959 : 2025 INSC 1159