Issues: Whether statutory ESI contributions payable by a corporate debtor are trust assets excluded from the liquidation estate under Section 36(4)(a)(i) of the Insolvency and Bankruptcy Code, 2016, rather than ordinary operational debts subject to distribution under Section 53.

Analysis: Section 40(4) of the Employees' State Insurance Act, 1948 governs the employer's statutory obligation to deposit ESI contributions, including amounts recoverable from employees' wages. Amounts so retained for statutory employee-benefit purposes are held in trust and constitute third-party assets. Section 36(4)(a)(i) of the Insolvency and Bankruptcy Code, 2016 excludes such trust assets from the liquidation estate. Filing the claim in Form B is procedural and does not alter the substantive character of the contributions or estop the claimant from invoking the statutory exclusion. The absence of an express reference to ESI contributions in Section 36(4)(a)(iii) does not affect the independent exclusion available under Section 36(4)(a)(i).

Conclusion: ESI contributions falling within Section 40(4) of the Employees' State Insurance Act, 1948 are trust assets excluded from the liquidation estate under Section 36(4)(a)(i) of the Insolvency and Bankruptcy Code, 2016. They cannot be treated as ordinary Government or operational creditor dues or subjected to the Section 53 waterfall; the qualifying amount must be determined from the statutory records and contribution period.

Issues: Whether adjournment of the resolution-plan approval proceedings pending decision on the request to replace the resolution professional was warranted.

Analysis: The application seeking replacement of the resolution professional, on which the adjournment request rested, had been withdrawn. The pending resolution-plan approval application, approved by the entire Committee of Creditors, was unrelated to that replacement request. The prolonged pendency of the insolvency process, repeated interlocutory applications, an earlier unsuccessful settlement proposal, and the undertaking to cooperate in expeditious hearings supported refusal of a further adjournment.

Conclusion: The refusal of adjournment and the associated costs were sustained. The adverse remarks against counsel were directed not to operate to counsel's prejudice.

Issues: (i) Whether a liquidator may continue an eviction application instituted by the resolution professional after liquidation; (ii) Whether the Adjudicating Authority may direct eviction of occupants from properties of the corporate debtor forming part of the liquidation estate notwithstanding rent-control protections.

Issue (i): Whether a liquidator may continue an eviction application instituted by the resolution professional after liquidation.

Analysis: The substitution of the liquidator in the pending application did not render it infructuous. The substance of the application was recovery and protection of assets of the corporate debtor. The liquidator's powers and duties under Section 35, including custody, control, preservation and realisation of assets, are materially pari materia to the resolution professional's powers relied upon in the original application. Recovery of a liquidation-estate asset is a mandatory statutory duty rather than a discretionary exercise.

Conclusion: The liquidator was entitled, and was statutorily obliged, to continue the pending eviction application after liquidation.

Issue (ii): Whether the Adjudicating Authority may direct eviction of occupants from properties of the corporate debtor forming part of the liquidation estate notwithstanding rent-control protections.

Analysis: The properties were owned by the corporate debtor and consequently vested in the liquidation estate under Sections 36(1) and 36(3)(a). The alleged thirty-year leases were unregistered and therefore could not establish their terms in evidence under Section 49 of the Registration Act. The occupants had not paid rent and were related parties connected with the suspended management, supporting the finding of unauthorized occupation. The recovery of estate assets had a direct and complete nexus with liquidation, bringing the dispute within the Adjudicating Authority's jurisdiction under Section 60(5)(c). The Insolvency and Bankruptcy Code is a later special insolvency legislation, and its overriding effect under Section 238 prevails over inconsistent rent-control procedure. The constitutional objection did not alter this position because recovery of the liquidation estate is incidental to the insolvency and liquidation framework, not an impermissible adjudication of ordinary landlord-tenant disputes.

Conclusion: The Adjudicating Authority had jurisdiction to order recovery of the properties for the liquidation estate, and rent-control protections did not bar eviction of the unauthorized occupants in the circumstances.

Final Conclusion: Assets owned by the corporate debtor must be brought under the liquidator's custody and control for their preservation and realisation in liquidation.

Ratio Decidendi: Where property owned by a corporate debtor forms part of the liquidation estate, the liquidator may seek its recovery before the Adjudicating Authority under Section 60(5)(c), and inconsistent rent-control procedure yields to the Insolvency and Bankruptcy Code where occupation lacks a valid enforceable tenancy.

Issues: (i) Whether Clause 24 of the Deed of Guarantee restricted the personal guarantors' liability to the market value of their mortgaged properties; (ii) Whether the repayment plans could be approved despite failing to secure the prescribed creditor voting threshold.

Issue (i): Whether Clause 24 of the Deed of Guarantee restricted the personal guarantors' liability to the market value of their mortgaged properties.

Analysis: Clauses 1, 6 and 9 imposed joint and several liability for the full principal amount, interest, costs and charges, irrespective of enforcement or realisation of securities. On harmonious construction, Clause 24 concerned the security arrangement and did not override the primary liability undertaken under the earlier clauses. A final and unchallenged debt-recovery adjudication had already crystallised the guarantors' liability, which could not be reopened through collateral proceedings under Section 114.

Conclusion: Clause 24 did not cap the personal guarantors' liability at the value of their mortgaged properties; they remained jointly and severally liable for the crystallised debt. The issue is against the appellants.

Issue (ii): Whether the repayment plans could be approved despite failing to secure the prescribed creditor voting threshold.

Analysis: Under Sections 111 and 114, approval required affirmative votes representing the statutory 66% voting share. The repayment plans did not obtain that threshold. The Adjudicating Authority could not substitute its own view for the creditors' commercial decision or independently approve an unapproved plan.

Conclusion: The repayment plans could not be approved without the requisite 66% creditor approval, and their rejection remained effective. The issue is against the appellants.

Final Conclusion: The finality of the guarantors' full liability and the creditors' rejection of repayment plans lacking statutory approval govern the insolvency process.

Ratio Decidendi: A finally determined personal-guarantee liability cannot be re-agitated in collateral repayment-plan proceedings, and a repayment plan lacking the statutory creditor majority cannot be independently approved.

Issues: Whether a post-admission settlement before constitution of the Committee of Creditors permits the Appellate Tribunal to set aside a Section 9 admission order and terminate the corporate insolvency resolution process under Rule 11, instead of following Section 12A.

Analysis: The amended Section 12A prescribes the statutory mechanism for withdrawal of an admitted insolvency application through an application by the resolution professional, subject to the conditions and restrictions in that provision. Its non-obstante restriction applies to withdrawal before constitution of the Committee of Creditors and after issuance of the first invitation for resolution plans. A settlement reached after commencement of the corporate insolvency resolution process, even with the operational creditor's consent and before constitution of the Committee of Creditors, does not by itself efface the admission order or permit bypass of that statutory mechanism.

Conclusion: The request to directly set aside the admission order under Rule 11 could not be granted. The settlement may be placed by the interim resolution professional before the Adjudicating Authority through an appropriate application under Section 12A for consideration in accordance with law.

Issues: (i) Whether removal and replacement of creditors' hypothecated machinery with substantially lower-value equipment constituted fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code, 2016, justifying contribution to the corporate debtor's assets; (ii) Whether the contribution amount required reduction for depreciation of the financed machinery and the realisable value of the machinery found at the premises.

Issue (i): Whether removal and replacement of creditors' hypothecated machinery with substantially lower-value equipment constituted fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code, 2016, justifying contribution to the corporate debtor's assets.

Analysis: Section 66 permits contribution where the corporate debtor's business is carried on with intent to defraud creditors or for a fraudulent purpose. The financed machinery, its invoices, and hypothecation were supported by contemporaneous documents. No contemporaneous evidence established creditor consent to substitute the secured machinery or accounted for acquisition of the alleged replacement machinery. Independent valuation reports identified the machinery at site as lower-value rotogravure machinery; physical indications showed that machinery had earlier been removed; and missing or mismatched identification details prevented verification against the financed assets. The delayed handing over of possession, absence of supporting purchase records, and lack of approval for substitution cumulatively supported an inference of fraudulent purpose on a preponderance of probabilities. Earlier possession proceedings under the SARFAESI Act did not create estoppel, and the dispute over precise technical identity did not oust jurisdiction under Section 66. Fraudulent trading need not be established by a series of transactions or direct proof of intent where compelling documentary and circumstantial evidence establishes removal of valuable secured assets from creditors' reach.

Conclusion: The removal and replacement of the hypothecated machinery constituted fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code, 2016, and contribution to the corporate debtor's assets was justified against the Appellants.

Issue (ii): Whether the contribution amount required reduction for depreciation of the financed machinery and the realisable value of the machinery found at the premises.

Analysis: The contribution remedy under Section 66 is directed at restoring the corporate debtor's depleted asset position. No material established that the quantified value of the removed financed machinery was arbitrary or unsupported. The assertions concerning depreciation and the value of the substituted machinery did not displace the finding that the financed and hypothecated machinery had been removed to the detriment of the corporate debtor and its creditors.

Conclusion: The contribution amount of Rs. 17,23,05,603.50 did not warrant reduction and was upheld.

Final Conclusion: The contribution remedy remains enforceable to restore the corporate debtor's depleted asset base, and the liquidation process may continue for preservation and realisation of its assets.

Ratio Decidendi: Fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code, 2016 may be established through cumulative documentary and circumstantial evidence showing removal of secured high-value assets and their unexplained replacement with substantially lower-value assets, without direct proof of fraudulent intent or a series of transactions.

Issues: Whether the corporate debtor's forfeited right to file a reply in the insolvency application should be restored.

Analysis: A party should ordinarily receive an opportunity to contest proceedings on merits unless doing so causes grave prejudice to the opposite party. The lapse was confined to not filing the reply along with the response to the interim-moratorium application. A time-bound opportunity to file the reply, coupled with advance service, a corresponding opportunity for rejoinder, and costs, adequately preserved procedural fairness without impeding expeditious disposal of the insolvency application.

Conclusion: The corporate debtor was entitled to a final opportunity to file its reply in the insolvency application, subject to costs.

Issues: (i) Whether service of the demand notice by private courier at the corporate debtor's registered office satisfied Section 8 of the Insolvency and Bankruptcy Code, 2016 and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016; (ii) Whether the operational debt met the Rs. 1 crore threshold and the damages correspondence disclosed a genuine pre-existing dispute; and (iii) Whether the Section 9 application was maintainable notwithstanding the corporate debtor's claimed solvency.

Issue (i): Whether service of the demand notice by private courier at the corporate debtor's registered office satisfied Section 8 of the Insolvency and Bankruptcy Code, 2016 and Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

Analysis: The notice was dispatched to the registered office and the record established delivery through tracking details. The purpose of Section 8 and Rule 5 is to give the corporate debtor notice of the claim and an opportunity to pay or raise a genuine dispute. Actual delivery and knowledge constituted substantial compliance; procedural law, being the handmaid of justice, could not permit a technical objection to the courier mode to defeat the proceeding.

Conclusion: The issue was decided in favour of the appellant: the demand notice was duly served and the objection to its mode of service was unsustainable.

Issue (ii): Whether the operational debt met the Rs. 1 crore threshold and the damages correspondence disclosed a genuine pre-existing dispute.

Analysis: For foreign currency conversion, the exchange rate prevailing on the date of the demand notice was relevant in the circumstances. On that basis, the admitted unpaid advances exceeded Rs. 1 crore even after excluding the USD 16,766 damages component. The corporate debtor had acknowledged receipt of the advances, undertaken to repay them, neither supplied the goods nor returned the money. Correspondence concerning damages to a separate consignment did not create a genuine pre-existing dispute over the admitted advances and amounted to a moonshine dispute.

Conclusion: The issue was decided in favour of the appellant: the statutory threshold was met and no genuine pre-existing dispute existed regarding the admitted advance amounts.

Issue (iii): Whether the Section 9 application was maintainable notwithstanding the corporate debtor's claimed solvency.

Analysis: Although insolvency proceedings cannot be used for recovery of genuinely disputed claims, the material established an operational debt, default, compliance with the demand-notice requirement, and absence of a genuine dispute. The corporate debtor's claimed solvency did not displace the statutory requirements for initiation of proceedings under Section 9.

Conclusion: The issue was decided in favour of the appellant: the Section 9 application was maintainable.

Final Conclusion: The statutory prerequisites for commencing the corporate insolvency resolution process were established, with payment of the entire admitted liability before the admission order remaining capable of preventing commencement of the process.

Ratio Decidendi: A Section 9 application is maintainable where effective service of the demand notice, an operational debt above the statutory threshold, and absence of a genuine pre-existing dispute concerning admitted unpaid advances are established.

Issues: (i) Whether the resolution applicant's non-disclosure of pending proceedings and attachment under the Prevention of Money Laundering Act rendered it ineligible or vitiated the resolution plan under Section 29A and Regulation 39(1)(c); (ii) Whether interference with the Committee of Creditors' approval of the resolution plan was warranted on alleged deficiencies in feasibility, valuation, source of funds, and treatment of the appellant's claimed secured-creditor status.

Issue (i): Whether the resolution applicant's non-disclosure of pending proceedings and attachment under the Prevention of Money Laundering Act rendered it ineligible or vitiated the resolution plan under Section 29A and Regulation 39(1)(c).

Analysis: Section 29A(d) prescribes ineligibility on the basis of the specified conviction, not merely the pendency of an inquiry, investigation, criminal proceeding, or attachment action. Although attachment of proceeds of crime is civil in form, it is connected with alleged criminal activity; nevertheless, attachment or pending proceedings alone do not establish the statutory disqualification. Regulation 39(1)(c) must be harmoniously read with Section 29A. The Committee of Creditors was apprised of the proceedings, deferred voting, obtained an independent eligibility assessment, deliberated on the disclosures and feasibility of the plan, and approved it after being fully informed. Any omission consequently did not establish a material irregularity affecting the integrity of the resolution process.

Conclusion: The pending proceedings and alleged non-disclosure did not render the resolution applicant ineligible or invalidate the resolution plan. The issue is against the appellant.

Issue (ii): Whether interference with the Committee of Creditors' approval of the resolution plan was warranted on alleged deficiencies in feasibility, valuation, source of funds, and treatment of the appellant's claimed secured-creditor status.

Analysis: Judicial review of a plan approved by the requisite majority is confined to statutory non-compliance under Section 30(2) and the limited appellate grounds under Section 61(3); it does not permit substitution of the Committee of Creditors' commercial wisdom on feasibility, viability, valuation, or funding arrangements. The plan disclosed its funding sources and payment structure. Appointment of a third valuer is discretionary under Regulation 35(1)(b), and a plan need not match liquidation value. The appellant's secured-creditor status remained sub judice, while the plan provided for automatic modification of distribution among secured financial creditors if that status is ultimately recognised, adequately safeguarding the claimed entitlement.

Conclusion: No reviewable statutory non-compliance or material irregularity justified interference with the Committee of Creditors' approval of the plan. The issue is against the appellant.

Final Conclusion: The approved resolution plan remains operative, and any eventual recognition of the appellant as a secured financial creditor is to be accommodated through the plan's stipulated distribution-adjustment mechanism.

Ratio Decidendi: Pending criminal proceedings or attachment under the Prevention of Money Laundering Act do not, absent a statutory conviction-based disqualification or a material irregularity affecting the integrity of the insolvency process, invalidate a resolution plan approved by an informed Committee of Creditors; feasibility and viability remain within its commercial wisdom subject to the limited statutory review.

Issues: (i) Whether the arbitral award dated 23.03.2017 extinguished the continuing guarantee or converted the personal guarantor into a co-borrower; (ii) Whether the financial creditor retained locus standi under Section 95 notwithstanding the alleged assignment of debt and sale of secured property by an asset reconstruction company; (iii) Whether the MOU and third-party assumption of the corporate debtor's liabilities released the personal guarantor; (iv) Whether an alleged restructuring or variation discharged the guarantor under Section 133 of the Indian Contract Act, 1872; (v) Whether the Section 95 petition was barred by limitation; and (vi) Whether the alleged contractual cap and dispute as to quantum prevented admission of the Section 95 petition.

Issue (i): Whether the arbitral award dated 23.03.2017 extinguished the continuing guarantee or converted the personal guarantor into a co-borrower.

Analysis: The arbitral award provided a revised repayment arrangement for existing liabilities, but neither cancelled the guarantee nor created a fresh borrowing arrangement. Its terms preserved liability upon default, and no substituted contract, fresh loan documentation, or express release of the guarantor was established. The irrevocable and continuing character of the guarantee remained operative until full repayment.

Conclusion: The arbitral award did not novate or extinguish the guarantee, and the guarantor did not become a co-borrower.

Issue (ii): Whether the financial creditor retained locus standi under Section 95 notwithstanding the alleged assignment of debt and sale of secured property by an asset reconstruction company.

Analysis: Assignment by other consortium lenders did not prove assignment of the financial creditor's independent share of debt. No assignment instrument executed by the financial creditor was produced. Enforcement and sale of security by the asset reconstruction company could arise from rights assigned by other lenders and did not establish transfer or satisfaction of the financial creditor's claim. A surety's liability remains co-extensive with that of the principal debtor unless the debt is fully satisfied or the surety is released.

Conclusion: The financial creditor retained locus standi to invoke the guarantee and commence proceedings under Section 95.

Issue (iii): Whether the MOU and third-party assumption of the corporate debtor's liabilities released the personal guarantor.

Analysis: A third party's undertaking to discharge the corporate debtor's liabilities and payments made under that arrangement did not amount to an express release of the guarantor or establish full satisfaction of the financial creditor's debt. No binding substitution of the guarantor's obligations was shown.

Conclusion: The MOU and third-party payments did not discharge the personal guarantor.

Issue (iv): Whether an alleged restructuring or variation discharged the guarantor under Section 133 of the Indian Contract Act, 1872.

Analysis: Section 133 requires a variation between the creditor and principal debtor without the surety's consent. The alleged restructuring concerned debts assigned by other lenders, with no evidence that the financial creditor participated in a variation of its own contract. The guarantee also provided that variations, modifications, or releases of security would not affect the guarantor's liability.

Conclusion: No variation by the financial creditor was proved that could discharge the guarantor under Section 133.

Issue (v): Whether the Section 95 petition was barred by limitation.

Analysis: The subsequent default following the demand notice of July 2020 occurred in September 2020, and the Section 95 petition was filed in May 2023, within three years of that default. The timely filing conclusion did not depend solely on treating payments under the arbitral award as an acknowledgement.

Conclusion: The Section 95 petition was within limitation.

Issue (vi): Whether the alleged contractual cap and dispute as to quantum prevented admission of the Section 95 petition.

Analysis: The guarantee terms extended to interest, charges, costs, and consequential liabilities in addition to the principal amount. At the admission stage, a dispute over computation did not negate the established debt and default. Recoveries from the corporate debtor, co-sureties, or securities must be credited in final determination, preventing double recovery.

Conclusion: The dispute concerning the contractual cap and quantum did not invalidate admission of the Section 95 petition.

Final Conclusion: The statutory basis for commencing the personal insolvency resolution process against the guarantor remained established, and the admission order was not shown to suffer from legal or material error.

Issues: Whether the appellant's pending application under Section 60(5) of the Insolvency and Bankruptcy Code, alleging collusive initiation of insolvency proceedings and asserting likely prejudice to its proprietary interests, was required to be decided before a final decision on the financial creditor's Section 7 application.

Analysis: Although the appellant was not a party to the Section 7 proceedings, it had filed an interlocutory application seeking intervention and challenging the proceedings as collusive. The application raised concerns that the corporate debtor's non-participation could affect the appellant's rights in the sugar factory and its assets. In the peculiar circumstances, procedural fairness required adjudication of that application before the company petition could be finally determined.

Conclusion: The appellant's interlocutory application under Section 60(5) must be decided within three months, if not already decided, before any final order is passed on the Section 7 company petition.

Issues: Whether the lease deeds created a security interest entitling the lessor development authorities to classification as secured creditors under the resolution plan.

Analysis: The Explanation to Section 3(31) of the Insolvency and Bankruptcy Code, 2016, inserted by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, was treated as clarificatory and retrospectively applicable. A security interest must arise from an agreement or arrangement between parties and cannot rest merely on a charge created by operation of law. The mortgage clause created priority only for unearned increase upon a mortgage sale or foreclosure and did not constitute a present, general charge securing lease premium, rent or other arrears. The clause permitting recovery of arrears as land revenue was a statutory recovery mechanism, not a consensual charge. A decision concerning a separate tripartite sub-lease containing an unconditional first charge over all dues was factually distinguishable.

Conclusion: The lease deeds did not create a security interest, and the authorities' claims remained unsecured statutory or operational dues.

Ratio Decidendi: A security interest under the Code must arise from a consensual agreement or arrangement and cannot be founded solely on a statutory charge; a contingent priority clause that does not secure the relevant debt does not create secured-creditor status.

Issues: Whether time spent in obtaining a certified copy could be excluded and the appeal treated as maintainable despite being filed beyond the maximum period prescribed for an appeal under the Insolvency and Bankruptcy Code.

Analysis: The impugned order was pronounced and uploaded on the date of its pronouncement, followed by a public announcement. Knowledge of the order was not a ground for extending limitation under the insolvency regime. The material did not substantiate the asserted administrative impediments or diligent pursuit of the certified copy. Section 61(2) permits filing within thirty days and, upon sufficient cause, only a further period not exceeding fifteen days; insolvency proceedings are statutorily time-bound.

Conclusion: The appeal was filed beyond the non-extendable outer limit under Section 61(2), and no sufficient cause or basis for exclusion of time was established; it was therefore not maintainable.

Issues: (i) Whether the ex parte proceedings denied the suspended directors a fair opportunity to contest the liquidator's application and whether the forensic audit report could be relied upon; (ii) Whether the property transactions and cash-expense entries constituted fraudulent accommodation and round-tripping transactions warranting contribution to the corporate debtor.

Issue (i): Whether the ex parte proceedings denied the suspended directors a fair opportunity to contest the liquidator's application and whether the forensic audit report could be relied upon.

Analysis: The appellants had been afforded sufficient opportunities before the Adjudicating Authority and their explanation for non-participation was not accepted. They were also able to place defence material in the appeal but did not produce reliable evidence sufficient to displace the audit findings. Though a forensic report is not conclusive by itself, it acquired evidentiary significance because it was founded on sale deeds, bank records, sub-registrar records and title-verification material. The burden to explain facts especially within the erstwhile management's knowledge remained on the appellants once the liquidator had produced a reliable forensic report.

Conclusion: The proceedings did not occasion any denial of fair opportunity, and the forensic audit report was rightly relied upon. The issue is decided against the appellants.

Issue (ii): Whether the property transactions and cash-expense entries constituted fraudulent accommodation and round-tripping transactions warranting contribution to the corporate debtor.

Analysis: The documentary material showed substantial overvaluation of properties, absence of proof for alleged cash payments, continued possession and rental collection by vendors, and rapid transfer of loan disbursements back to the corporate debtor and related entities. Certain properties remained encumbered and title-related steps were not completed. The unexplained and unsupported cash-expense entries further supported the finding that funds had been improperly withdrawn. These circumstances established that the stated property purchases were used as accommodation transactions to obtain loans and channel the proceeds back to the corporate debtor or connected entities.

Conclusion: The transactions were fraudulent round-tripping arrangements intended to defraud creditors, and the contribution liability imposed on the appellants was sustained. The issue is decided against the appellants.

Final Conclusion: The findings of fraudulent transactions and the consequent monetary contribution obligation under the insolvency framework remain enforceable.

Ratio Decidendi: A forensic audit supported by reliable documentary material may sustain a finding of fraudulent transactions where persons having special knowledge of the relevant affairs fail to produce cogent evidence rebutting it.

Issues: Whether the IBBI (Liquidation Process) (Second Amendment) Regulations, 2025 applied to a liquidation by sale of the corporate debtor as a going concern where the liquidation order, recording the Committee of Creditors' decision for such sale, had been passed before the amendment came into force.

Analysis: The liquidation order under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 had made liquidation effective from its date and had expressly recorded the recommendation under Regulation 39C of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 that the liquidator first explore a going-concern sale under Regulation 32(e) of the IBBI (Liquidation Process) Regulations, 2016. The auction was an implementation step in the liquidation already commenced, not a fresh liquidation process. Rights and obligations in liquidation are governed by the regulations prevailing on the liquidation commencement date; a later amendment without retrospective operation cannot alter the legal foundation of the pre-existing process.

Conclusion: The amendment notified on 14.10.2025 did not govern or invalidate the going-concern sale process that commenced with the liquidation order dated 10.10.2025. The impugned order was set aside, and the matter was remitted for consideration of reliefs and concessions in accordance with law.

Issues: Whether a deposit made expressly without prejudice after a Section 7 insolvency petition was reserved for orders could justify closure of the proceeding without adjudicating objections concerning maintainability, financial debt and default.

Analysis: A deposit expressly made without prejudice to rights, remedies and contentions is not, by itself, an unconditional admission of liability or default. Although the deposit could be considered, it could not replace the determination required in a Section 7 proceeding where the corporate debtor had specifically disputed the petition's maintainability and the existence of financial debt and default. The subsequent demand asserting different components of interest, default interest and legal expenses could not independently establish a financial debt; each component required a contractual or statutory foundation and legal recoverability. Liberty to pursue legally maintainable claims did not amount to adjudication of those claims.

Conclusion: Closure of the Section 7 proceeding without deciding the appellant's objections to maintainability, financial debt and default was legally unsustainable.

Issues: (i) Whether death of an individual resolution applicant after CoC approval but before Adjudicating Authority approval makes the resolution plan unimplementable and permits liquidation under Section 33(1). (ii) Whether liquidation could be ordered and the Section 12A withdrawal application dismissed as infructuous while that application was pending.

Issue (i): Whether death of an individual resolution applicant after CoC approval but before Adjudicating Authority approval makes the resolution plan unimplementable and permits liquidation under Section 33(1).

Analysis: A resolution applicant is not an office-holder with non-heritable obligations, but occupies the position of a promisor within the statutory resolution process. Section 33(1) permits liquidation only where no plan is received within the CIRP period or where a CoC-approved plan is rejected under Section 31; death of the applicant is not an additional statutory ground. The objective of preserving the corporate debtor as a going concern requires examination of the continued viability of the plan rather than automatic liquidation. Where the request for resolution plan or the plan itself does not address the contingency, inherent powers may be used to require the CoC to assess whether the plan can be sustained, including whether an heir is eligible, qualified, free from Section 29A disqualification, and willing to implement it.

Conclusion: Death of the resolution applicant does not by itself render the plan unimplementable or authorise liquidation under Section 33(1); the liquidation order on that basis was unsustainable.

Issue (ii): Whether liquidation could be ordered and the Section 12A withdrawal application dismissed as infructuous while that application was pending.

Analysis: The withdrawal route under Section 12A remains available during the resolution process. Once the sole CoC member had resolved to withdraw the CIRP following settlement and the application was pending, liquidation could not be mechanically ordered without considering that statutory exit mechanism.

Conclusion: The pending Section 12A application must be considered in accordance with law, and its dismissal as infructuous could not be sustained.

Final Conclusion: The CIRP stands revived, with the statutory withdrawal request requiring adjudication before further steps are taken.

Ratio Decidendi: Death of a resolution applicant pending approval of a CoC-approved plan is not a statutory ground for liquidation under Section 33(1); the resolution process must instead explore continuation of the plan within the statutory framework before liquidation is resorted to.

Issues: Whether a successful purchaser of a corporate debtor as a going concern in liquidation is entitled to immunity under Section 32A for pre-sale investigations, proceedings, non-compliances, and consequential liabilities.

Analysis: Section 32A protection and the clean slate principle apply where a corporate debtor is sold as a going concern during liquidation, as they do upon successful completion of CIRP. Past liabilities that do not survive the insolvency process cannot be fastened upon the purchaser merely because the sale occurred in liquidation. The statutory immunity remains conditional upon fulfilment of the requirements prescribed by Section 32A. Reliefs seeking waivers or concessions from statutory authorities must be pursued before those authorities.

Conclusion: The purchasers are entitled to Section 32A protection in respect of the declined reliefs concerning past investigations, proceedings, non-compliances, penalties, and liabilities, subject to fulfilment of the statutory conditions.

Issues: (i) Whether the NCLT, New Delhi Bench-II could exercise jurisdiction over a Section 95 application against a personal guarantor when the corporate debtor's CIRP was pending before the NCLT, Chandigarh Bench-II; (ii) Whether Rule 16(d) of the National Company Law Tribunal Rules, 2016 permits transfer of such proceedings between Benches in different territorial locations.

Issue (i): Whether the NCLT, New Delhi Bench-II could exercise jurisdiction over a Section 95 application against a personal guarantor when the corporate debtor's CIRP was pending before the NCLT, Chandigarh Bench-II.

Analysis: Section 60(2) of the Insolvency and Bankruptcy Code, 2016, operating notwithstanding Section 60(1), requires an insolvency or bankruptcy application concerning a personal guarantor to be filed before the same NCLT where the corporate debtor's CIRP or liquidation is pending. The provision mandates consolidation before one Adjudicating Authority to secure consistency and avoid parallel or conflicting proceedings.

Conclusion: In favour of the Appellant. The NCLT, New Delhi Bench-II lacked territorial and inherent jurisdiction over the Section 95 proceedings, which were coram non judice and non-est in law.

Issue (ii): Whether Rule 16(d) of the National Company Law Tribunal Rules, 2016 permits transfer of such proceedings between Benches in different territorial locations.

Analysis: Rule 16(d), read with Rule 2(7) of the National Company Law Tribunal Rules, 2016 and Section 60(2) of the Insolvency and Bankruptcy Code, 2016, empowers the President of the NCLT to transfer a case from one Bench to another when circumstances warrant. This power is not confined to transfers within the same territorial jurisdiction where transfer is required to give effect to the mandatory forum prescribed by Section 60(2).

Conclusion: In favour of the Appellant. The restrictive interpretation limiting Rule 16(d) to intra-territorial transfers was incorrect.

Final Conclusion: Proceedings against the personal guarantor must be instituted before the NCLT, Chandigarh Bench-II, being the Adjudicating Authority where the corporate debtor's CIRP was pending; the creditor remains at liberty to pursue proceedings before the competent forum in accordance with law.

Ratio Decidendi: Where the corporate debtor's CIRP or liquidation is pending before an NCLT, Section 60(2) of the Insolvency and Bankruptcy Code, 2016 mandatorily fixes the forum for personal-guarantor insolvency proceedings at that same NCLT, and Rule 16(d) permits inter-Bench transfer to enforce that mandate.

Issues: Whether an operational creditor's application for initiation of CIRP could be maintained when a genuine pre-existing dispute concerning the alleged operational debt existed before issuance of the demand notice.

Analysis: Section 9 requires rejection where the operational creditor has received a notice of dispute or the Information Utility records a dispute. The material showed that, before the Section 8 demand notice, the corporate debtor had issued a legal notice denying the underlying purchase orders and supplies, raised allegations of fraudulent transactions, initiated related complaints, and recorded the debt as disputed with the Information Utility. The disputes concerned the foundation and genuineness of the transactions, including purchase orders, invoices, deliveries and payments, and required detailed factual adjudication in the pending civil proceedings. Such contentions were neither spurious nor illusory and could not be resolved in summary insolvency proceedings.

Conclusion: The pre-existing dispute barred initiation of CIRP under Section 9, in favour of the corporate debtor.