NCLT Erred In Deciding On Merits After Reserving Matter On Maintainability: NCLAT Orders Reconsideration Of Pleas

A Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) observed that the NCLT had reserved the matter on maintainability and later proceeded to issue final order on merits, therefore the matter required to be considered afresh.

The Appellants had filed applications seeking exclusion of Respondent Nos. 3 and 4 from the Committee of Creditors (CoC) on the ground that they were related parties. The NCLT after hearing the parties had initially reserved the matter on maintainability but subsequently dismissed the applications holding that the issues raised in the case were already settled and the applications were not maintainable. It relied on earlier findings of the NCLAT in connected appeals.

The Appellants submitted that the NCLT had initially reserved the matter on maintainability and subsequently dismissed them on merits without providing an opportunity to argue on substantive issues. It was further submitted that the NCLT failed to address the substantive issue as to whether the Respondents were related parties.

Per contra, the Respondents submitted that the issue had already been decided in an earlier application under section 7 of the IBC and findings of the NCLAT in an earlier matter operated as res judicata. It was further submitted that the same issue whether the Respondents were related parties had been raised before the admission of the application under section 7 of the IBC before the NCLT and subsequently before the NCLAT and therefore could not be reopened.

The Tribunal, while agreeing with the submissions of the Appellants observed that the NCLT had initially reserved the matter on maintainability but its final order went beyond that limited scope, addressing issues on merits.

Based on the above, the Tribunal held that since the Adjudicating Authority had failed to hear both the parties, justice required the applications to be restored for fresh consideration.

Accordingly, the Tribunal set aside order holding that the NCLT will consider contentions, including those on locus and maintainability afresh.

Case Title: Rishi Gupta & Anr. Versus IDBI Trusteeship Services Ltd. & Ors.

Case Number:Company Appeal (AT) (Insolvency) No. 1596 of 2025

Judgment Date: 30/10/2025

For Appellants : Mr. Sumesh Dhawan, Mr. Rajat Joneja, Mr. Arpit Dwivedi, Ms. Sakshi Kapoor and Ms. Tina Aneja, Advocates.

For Respondents : Mr. Krishnendu Dutta, Sr. Advocate with Mr. Pranjit Bhattacharya, Ms. Salonee Shukla, Ms. Aashima Gautam, Mr. Yash Tandon and Mr. Sachin Jain, Advocates for R-1, R-3 & R-4.

Mr. Abhirup Dasgupta, Mr. Rahul Gupta, Mr. Rahul Dadhich and Ms. Vagisha Tiwari, Advocates for R-2.

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