Issues: (i) Whether a non-participant prospective bidder could annul a concluded liquidation e-auction, letter of intent and sale certificate based on later stipulations concerning dismantling, export facilitation and costs; (ii) Whether the costs imposed for bringing the challenge were disproportionate.

Issue (i): Whether a non-participant prospective bidder could annul a concluded liquidation e-auction, letter of intent and sale certificate based on later stipulations concerning dismantling, export facilitation and costs.

Analysis: In a liquidation sale under the Insolvency and Bankruptcy Code, 2016 and the Liquidation Regulations, the appellant had neither participated in nor shown an actual interest in the e-auction. Its assertion that it might have bid had the later conditions been disclosed was speculative. No substantive basis was established to unsettle the e-auction, letter of intent or sale certificate.

Conclusion: The challenge to the concluded e-auction, letter of intent and sale certificate failed.

Issue (ii): Whether the costs imposed for bringing the challenge were disproportionate.

Analysis: Although a deterrent cost was warranted because the appellant was a stranger to the liquidation process, the record did not show that its application had delayed that process. The cost imposed was therefore disproportionate.

Conclusion: The costs were reduced from Rs. 10 lakh to Rs. 1 lakh.

Final Conclusion: A speculative challenge by a non-participant does not justify reopening a concluded liquidation sale, while costs imposed to deter such litigation must remain proportionate.

Ratio Decidendi: A concluded liquidation auction cannot be reopened at the instance of a non-participant on a speculative assertion of potential participation without a substantive ground demonstrating grounds for interference.

Issues: (i) Whether the financial creditor's application under Section 7 was barred by limitation; (ii) Whether the failed revival scheme and pending winding-up proceedings precluded continuation of the insolvency proceedings.

Issue (i): Whether the financial creditor's application under Section 7 was barred by limitation.

Analysis: Although Article 137 prescribes a three-year limitation period from default, the corporate debtor's continuing failure to deliver possession or refund the amounts constituted a continuing breach and subsisting default. The revival scheme also acknowledged the financial creditor's claim, furnishing acknowledgment of liability and supporting extension of limitation.

Conclusion: The Section 7 application was not time-barred; this issue is decided in favour of the respondent.

Issue (ii): Whether the failed revival scheme and pending winding-up proceedings precluded continuation of the insolvency proceedings.

Analysis: The revival scheme had become unworkable and was set aside. The High Court thereafter directed revival of proceedings under the Insolvency and Bankruptcy Code, 2016, and granted liberty to pursue further proceedings before the NCLT. Proceedings under Section 7 operate independently and were not barred by the earlier winding-up and revival-scheme proceedings.

Conclusion: The failed revival scheme and winding-up proceedings did not prevent continuation of the Section 7 insolvency proceedings; this issue is decided in favour of the respondent.

Final Conclusion: The corporate debtor remains subject to the insolvency resolution process initiated on the established debt and default.

Ratio Decidendi: A continuing failure to deliver possession or refund amounts, coupled with acknowledgment of liability, keeps a financial creditor's insolvency claim within limitation despite an earlier default.

Issues: Whether the CIRP could be brought to an end in the exceptional circumstances where all creditors' claims stood settled or were agreed to be settled, but withdrawal under the prescribed Section 12A mechanism was impracticable because the CIRP costs remained undetermined and Form FA with the requisite bank guarantee could not be furnished.

Analysis: Section 12A of the Insolvency and Bankruptcy Code, 2016 read with Regulation 30A of the Insolvency Resolution Process for Corporate Persons Regulations, 2016 ordinarily requires a withdrawal proposal through the initiating applicant in Form FA, supported by the prescribed approval and security towards CIRP costs. The earlier withdrawal request did not fulfil those requirements. Subsequently, however, the sole financial creditor was paid in full, the operational creditor agreed to accept an enhanced full-and-final settlement, no resolution plan was available, and the appellant gave a binding undertaking to pay CIRP costs as determined in the pending cost-determination proceedings. The uncrystallised CIRP costs and the operational creditor's unwillingness to provide the bank guarantee created a procedural stalemate, making the statutory withdrawal route infeasible. Continued CIRP in those circumstances would not advance the insolvency resolution objective and would only increase CIRP costs.

Conclusion: In the peculiar circumstances, the inability to complete the formal Section 12A withdrawal process did not warrant continuation of the CIRP after settlement of creditor claims and protection of the Resolution Professional's entitlement to CIRP costs through their adjudication and payment.

Issues: Whether the personal guarantor's application under Section 94 of the Insolvency and Bankruptcy Code, 2016 was a bona fide invocation of the personal insolvency resolution process or an abuse of the interim moratorium to obstruct enforcement proceedings.

Analysis: Section 94 permits a personal guarantor in default to initiate an insolvency resolution process and submit a repayment plan, while Section 96 provides an interim moratorium. The process is intended for genuine resolution and cannot be used merely as a device to impede a financial creditor's lawful enforcement of security. The first application was withdrawn after the guarantor had received the benefit of interim moratorium for about two years. The second application was filed immediately after a fresh possession notice was issued following cessation of that moratorium, and no genuine repayment effort was made during the intervening period. The timing and conduct established that both applications were intended to stall possession and recovery proceedings rather than resolve the guarantor's insolvency.

Conclusion: The Section 94 application was rightly rejected as an abuse of the insolvency process and interim moratorium, against the personal guarantor.

Issues: (i) Whether consequential directions concerning cancellation and fresh issue of shares, listing, public shareholding and stock-exchange compliances could be granted to implement the going concern sale; (ii) Whether financial creditors could be directed to undertake consequential acts for updating credit records, releasing charges and unfreezing accounts; (iii) Whether the purchaser could obtain preservation of all corporate receivables and a fresh limitation period for their enforcement; (iv) Whether immunity from pre-transfer liabilities and recognition of the new management for pending legal proceedings could be directed; (v) Whether stamp duty, registration charges and other tax-related liabilities arising from the acquisition could be waived; (vi) Whether subsisting consents, licences, contractual rights and statutory entitlements would continue after the going concern sale; and (vii) Whether incidental concessions beyond the sale documents could be granted and the corporate debtor's status changed from liquidation to active.

Issue (i): Whether consequential directions concerning cancellation and fresh issue of shares, listing, public shareholding and stock-exchange compliances could be granted to implement the going concern sale.

Analysis: Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 confers residuary jurisdiction over matters directly connected with liquidation. A going concern sale under Regulations 32(e) and 32A requires commercially effective implementation. A purposive interpretation of securities requirements permits recognition of the revised 95:5 capital structure consistent with Rule 19A of the Securities Contracts (Regulation) Rules, 1957. The requested directions did not displace the independent statutory jurisdiction of securities regulators.

Conclusion: The requested shareholding, listing and stock-exchange related consequential reliefs were allowed in favour of the appellant, subject to applicable procedures, filings and prescribed fees.

Issue (ii): Whether financial creditors could be directed to undertake consequential acts for updating credit records, releasing charges and unfreezing accounts.

Analysis: Following completion of the sale and distribution under Section 53(1) of the Insolvency and Bankruptcy Code, 2016, requiring separate negotiations with each financial creditor would undermine the commercial efficacy of the going concern sale. The clean slate doctrine requires recognition of the legal consequences of the sale, while preserving financial creditors' independent statutory powers.

Conclusion: The financial-creditor related reliefs were allowed in favour of the appellant; financial creditors must undertake necessary ministerial and consequential acts, while any account balance forming part of the liquidation estate remains distributable under Section 53 of the Insolvency and Bankruptcy Code, 2016.

Issue (iii): Whether the purchaser could obtain preservation of all corporate receivables and a fresh limitation period for their enforcement.

Analysis: The requested blanket preservation of present and future receivables and grant of a fresh limitation period was not contemplated by the auction notice, process document or sale certificate. Such relief could affect contractual rights of third parties and would exceed the permissible scope of directions for implementing the sale.

Conclusion: The relief concerning preservation of receivables and a fresh limitation period was denied against the appellant.

Issue (iv): Whether immunity from pre-transfer liabilities and recognition of the new management for pending legal proceedings could be directed.

Analysis: Section 32A of the Insolvency and Bankruptcy Code, 2016 and the clean slate doctrine apply to a corporate debtor sold as a going concern in liquidation after sale proceeds have been distributed under Section 53. Past unpaid claims cannot be imposed on the purchaser. Continuity of litigation under the new management is distinct from adjudication of the merits of individual proceedings, which remains with the competent forum.

Conclusion: The legal and litigation-related reliefs were allowed in favour of the appellant; relevant authorities and persons must recognise the consequences of the going concern sale, without affecting their independent statutory powers.

Issue (v): Whether stamp duty, registration charges and other tax-related liabilities arising from the acquisition could be waived.

Analysis: The sale certificate and auction terms expressly placed stamp duty, transfer charges, taxes, fees and related acquisition expenses on the successful bidder. The purchaser, having accepted those contractual terms, could not seek their rewriting through liquidation proceedings. Statutory authorities retain authority to consider any request under their governing laws.

Conclusion: The requested tax, stamp-duty and registration-fee waivers were denied against the appellant.

Issue (vi): Whether subsisting consents, licences, contractual rights and statutory entitlements would continue after the going concern sale.

Analysis: A going concern sale carries with it subsisting consents, approvals, licences, rights, entitlements, benefits and privileges of the corporate debtor. Recognition of their continuance is a consequential direction necessary for the sale, but compliance required because of the change in ownership or management cannot be dispensed with.

Conclusion: The general reliefs were allowed in favour of the appellant; subsisting rights remain vested in the corporate debtor, subject to compliance obligations and renewal fees, if applicable.

Issue (vii): Whether incidental concessions beyond the sale documents could be granted and the corporate debtor's status changed from liquidation to active.

Analysis: Reliefs must be commensurate with the process document, letter of intent and sale certificate. The sale certificate specifically contemplated changing the corporate debtor's status from liquidation to active, and refusal of this direction would impede the procedural implementation of the completed going concern sale. Other incidental concessions lacking such contractual basis could not be granted.

Conclusion: The change of status from liquidation to active was allowed in favour of the appellant; the remaining incidental concessions were denied.

Final Conclusion: The liquidation framework requires consequential directions that give practical effect to a completed going concern sale and the clean slate doctrine, but does not authorise relief contrary to the agreed sale terms or exemption from independent statutory requirements.

Ratio Decidendi: Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 empowers consequential directions necessary to make a going concern sale effective, including recognition of its legal consequences, but not benefits inconsistent with the auction terms or independent statutory jurisdiction.

Issues: Whether ad-interim stay of the suspension of an insolvency professional's registration should be granted pending appeal, including its consequences for other ongoing assignments; and whether individual financial creditors in a class may be counted for the pre-meeting threshold under Regulation 18(3) without prior intra-class majority approval.

Analysis: Suspension of registration is not assignment-specific: registration is the statutory basis for acting as an insolvency professional in any insolvency process. Sections 206 to 208 and Section 220(2) operate upon the professional's registration and eligibility generally, rather than only in the assignment in which misconduct is alleged. Regulation 13(7) requires intimation of a suspension order to the Committees of Creditors in other assignments and to the Adjudicating Authority. Such intimation operationalises the suspension and does not amount to the Disciplinary Committee exercising the Committee of Creditors' distinct replacement power under Section 27.

Analysis: The ordinary test of Prima Facie Case, Balance of Convenience and Irreparable Injury applies with added caution where a regulatory disciplinary order is made in Public Interest. No sufficiently strong prima facie case was established to displace the disciplinary order at the interim stage. Section 25A(3A) concerns an authorised representative's composite vote on a resolution placed before the Committee of Creditors, whereas Regulation 18(3) applies at the prior agenda-placement stage and does not prima facie require a prior intra-class majority for counting individual creditors' requests. The asserted risk of replacement in other assignments was an ordinary consequence of suspension and did not outweigh Regulatory Discipline and the stakeholders' interest in the integrity of ongoing processes. The merits, including proportionality and the correctness of the disciplinary findings, remain open for final hearing.

Outcome: The request for ad-interim stay of the suspension order was declined; the main appeal remains pending for merits determination.

Issues: (i) Whether default under the Cash Credit Facility occurred within or outside the period protected by Section 10A; (ii) Whether default under the Ad-Hoc Cash Credit Facility occurred within or outside the period protected by Section 10A; (iii) Whether amended dates of default or subsequently relied-on events could sustain admission of the Section 7 application.

Issue (i): Whether default under the Cash Credit Facility occurred within or outside the period protected by Section 10A.

Analysis: Under Section 3(12) of the Insolvency and Bankruptcy Code, 2016, default requires non-payment of a debt that is cumulatively due and presently payable. The Cash Credit facility was repayable on demand under the governing contractual terms, but no demand had been made before the alleged date of 10.03.2020. Recovery of interest on cash credit facilities stood deferred under the applicable RBI COVID-19 directions from 01.03.2020 to 31.08.2020. The distinction between moratorium for term loans and deferment for cash credit facilities did not displace the requirement that the debt must be presently payable to constitute default. The subsequent conversion of interest into FITL, renewal of the facility, and contemporaneous banking records also did not support the asserted default date.

Conclusion: The alleged Cash Credit default of 10.03.2020 was not established; the relevant default fell within the Section 10A protected period, in favour of the Appellant.

Issue (ii): Whether default under the Ad-Hoc Cash Credit Facility occurred within or outside the period protected by Section 10A.

Analysis: The facility was to be adjusted within 90 days from the date of availment. Applying Section 9 of the General Clauses Act, 1897, the date of availment was excluded, making 25.03.2020 the last day for adjustment and 26.03.2020 the earliest date on which non-payment could become overdue. This computation was supported by the contemporaneous bank communication and the earlier recorded position in the proceedings. The Bank's calculation treating the availment date as the first day, and thereby fixing default on 24.03.2020, was unsustainable.

Conclusion: Default under the Ad-Hoc Cash Credit Facility arose on 26.03.2020 within the Section 10A protected period and could not found CIRP, in favour of the Appellant.

Issue (iii): Whether amended dates of default or subsequently relied-on events could sustain admission of the Section 7 application.

Analysis: Amendment of a Section 7 application is permissible in principle, but a substituted default date must be supported by the record. Where Section 10A applies, the precise date of default is decisive because the statutory prohibition is permanent for defaults arising in the protected period. The amended dates, introduced after the Section 10A objection, were not supported by the contractual and contemporaneous material. Later demand and recall notices, or subsequent non-payment, could not supply an alternative basis where they were not pleaded as the relevant defaults in the amended application.

Conclusion: The amended dates and unpleaded subsequent events could not sustain admission of the Section 7 application, in favour of the Appellant.

Final Conclusion: The defaults relied upon for initiating CIRP arose during the period permanently protected by Section 10A, and the Section 7 application could not be maintained on the substituted or alternative bases relied upon.

Ratio Decidendi: For application of Section 10A, a financial creditor must establish a debt that was both due and presently payable under Section 3(12); where contractual payment is deferred and the resulting default arises in the protected period, CIRP cannot be initiated for that default.

Issues: Whether rejection of the claim was justified because no independent and legally enforceable financial debt against the corporate debtor was established.

Analysis: Under Section 5(8)(f) of the Insolvency and Bankruptcy Code, 2016, a claim must be supported by reliable material establishing a financial debt against the corporate debtor. The original payment was made to another entity; no banking trail established a transfer to the corporate debtor; and the relied-upon ledger and balance-sheet entries were internal adjustments among entities under common management, including an eventual reversal. The memorandum recorded only a preliminary arrangement, contemplated further payment and a definitive agreement, and did not mature into a concluded commercial arrangement. The claimant also pursued arbitral and execution remedies only against the entity to which payment was made. Regulation 13(1) of the Insolvency Resolution Process for Corporate Persons Regulations, 2016 requires the resolution professional to verify and update claims; revisiting a provisional admission upon verification was an exercise of that duty, not adjudication of disputed rights.

Conclusion: The claimant failed to establish an independent financial debt against the corporate debtor; rejection of its claim was justified, against the appellant.

Issues: (i) Whether an arbitration clause bars an operational creditor from invoking the statutory remedy under the Insolvency and Bankruptcy Code; (ii) Whether a claim arising from a settlement of disputes concerning supply of goods constitutes operational debt and confers operational-creditor status; (iii) Whether the respondent's alleged contractual damages claim constituted a pre-existing dispute barring admission under Section 9.

Issue (i): Whether an arbitration clause bars an operational creditor from invoking the statutory remedy under the Insolvency and Bankruptcy Code.

Analysis: An arbitration clause embodies a consensual private dispute-resolution mechanism and does not displace a statutory insolvency remedy. The availability, or even invocation, of arbitration cannot prevent proceedings under the Code where the statutory requirements for debt and default are met.

Conclusion: The arbitration clause did not bar invocation of Section 9 proceedings, in favour of the appellant.

Issue (ii): Whether a claim arising from a settlement of disputes concerning supply of goods constitutes operational debt and confers operational-creditor status.

Analysis: The settlement amount arose from transactions for supply of raw cotton and disputes concerning the supplied goods. A claim in respect of such supply falls within operational debt; the person to whom that debt is owed qualifies as an operational creditor. The definition cannot be confined to a person who directly supplied goods or services to the corporate debtor.

Conclusion: The settlement claim was operational debt and the appellant was an operational creditor entitled to invoke Section 9, in favour of the appellant.

Issue (iii): Whether the respondent's alleged contractual damages claim constituted a pre-existing dispute barring admission under Section 9.

Analysis: A dispute must be genuine and supported by material, rather than a patently feeble assertion. The alleged breach and damages claim was raised only in reply to the demand notice, apart from an isolated communication, and had not been pursued before any adjudicatory or arbitral forum. It therefore did not establish a dispute existing before the demand notice.

Conclusion: No pre-existing dispute was established to bar the Section 9 application, in favour of the appellant.

Final Conclusion: The statutory conditions for pursuing insolvency resolution on the settled operational debt remained available, and the rejection founded on arbitration and an alleged pre-existing dispute could not stand.

Ratio Decidendi: A consensual arbitration clause does not exclude the statutory insolvency remedy, and a belated, unsupported damages assertion does not constitute a pre-existing dispute where the claim arises from an operational debt connected with supply of goods.

Issues: (i) Whether the corporate debtor's application for initiation of CIRP under Section 10 was liable to be rejected as a malicious use of the insolvency process; (ii) Whether the monetary penalty imposed upon the corporate debtor required interference on proportionality grounds.

Issue (i): Whether the corporate debtor's application for initiation of CIRP under Section 10 was liable to be rejected as a malicious use of the insolvency process.

Analysis: Section 10 permits a corporate debtor to seek insolvency resolution, but the Adjudicating Authority must assess whether the application is a bona fide attempt at resolution and is not being used to frustrate creditor recovery. The filing followed commencement of recovery measures, while substantial hypothecated plant and machinery was found missing, no satisfactory explanation or supporting fixed-asset records were furnished, and the corporate debtor had no meaningful receivables or immovable assets. These circumstances supported the finding that the application sought a moratorium to obstruct recovery proceedings rather than to achieve genuine resolution.

Conclusion: The rejection of the Section 10 application was justified; the application was initiated with malicious intent and amounted to abuse of the insolvency process. This issue was decided against the appellant.

Issue (ii): Whether the monetary penalty imposed upon the corporate debtor required interference on proportionality grounds.

Analysis: A penalty for fraudulent conduct must be supported by reasons demonstrating the nature and magnitude of the conduct and must conform to the principle of proportionality. The record did not disclose reasons justifying the quantum of Rs. 10 lakh, notwithstanding the finding of malicious intent.

Conclusion: The penalty was excessive and was reduced from Rs. 10 lakh to Rs. 5 lakh. This issue was decided in favour of the appellant.

Final Conclusion: The finding that the insolvency application was a mala fide attempt to secure protection from creditor recovery remains operative, while the financial sanction is recalibrated to a proportionate amount.

Ratio Decidendi: An application for corporate insolvency resolution may be rejected where the surrounding conduct establishes that it is a fraudulent or malicious device to defeat creditor recovery, and any resulting penalty must be reasoned and proportionate.

Issues: Whether admission of an application for initiation of corporate insolvency resolution process could be sustained when the outstanding financial debt on the date of the admission order was below the statutory default threshold.

Analysis: The admitted payment records showed that the corporate debtor had repaid Rs. 2.25 crore of the principal debt before the admission order. The remaining amount of Rs. 93,88,310 was below the threshold of Rs. 1 crore. The financial creditors had received those payments but had not placed that material fact before the Adjudicating Authority before the order was made. Consequently, the prerequisite default amount for admission under Section 7 was not present on the relevant date.

Conclusion: The admission of the insolvency application was legally unsustainable and was set aside, in favour of the appellant.

Issues: (i) Whether the liquidation order under Section 33(1) was sustainable when the resolution professional's application was not founded on an independent and objective assessment and liquidation had not been considered by the Committee of Creditors; (ii) Whether the CIRP could be restored to enable consideration of withdrawal under Section 12A where settlement of financial debts was being pursued.

Issue (i): Whether the liquidation order under Section 33(1) was sustainable when the resolution professional's application was not founded on an independent and objective assessment and liquidation had not been considered by the Committee of Creditors.

Analysis: Section 33(1) permits liquidation upon failure of the resolution process, but the resolution professional must act independently, objectively, and consistently with the statutory scheme. The application was filed after the resolution professional abandoned the proposed request for general directions under Section 60(5), allegedly on the Registry's insistence, and acted upon an informal communication from one financial creditor outside a Committee of Creditors meeting. Neither financial creditor had voted for liquidation. These circumstances showed that the decision to invoke liquidation was not an independent, objective decision and was taken without placing the matter before the Committee of Creditors for deliberation.

Conclusion: The liquidation order under Section 33(1) was legally unsustainable and was set aside in favour of the appellant.

Issue (ii): Whether the CIRP could be restored to enable consideration of withdrawal under Section 12A where settlement of financial debts was being pursued.

Analysis: Withdrawal under Section 12A is an integral route for resolving an insolvency condition through settlement, alongside resolution through a plan and liquidation. The CIRP timeline is directory where a viable resolution remains in sight. The extension mechanism under Section 12(3), including the period up to the outer limit of 330 days, can be used to facilitate a probable Section 12A exit route as well as a resolution plan. Since repayment under the one-time settlement was continuing and the financial debts had been substantially addressed, fairness and the objective of preserving the corporate debtor as a going concern required an opportunity to pursue withdrawal rather than liquidation.

Conclusion: The CIRP was restored and the resolution professional was required to explore withdrawal under Section 12A, in favour of the appellant.

Final Conclusion: Insolvency resolution must favour a fair and purposive choice among available mechanisms, and liquidation cannot be pursued where a viable settlement-based exit may preserve the corporate debtor as a going concern.

Ratio Decidendi: Where a resolution professional invokes liquidation without an independent and objective assessment, despite a viable settlement process capable of supporting withdrawal under Section 12A, the liquidation order may be reversed and the CIRP restored to pursue that statutory exit route.

Issues: Whether the interest on the balance financial debt, fixed at 9% per annum in the final insolvency appellate judgment, should be substituted by the contractual default rate of 3% per month.

Analysis: Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 preserves inherent powers but does not warrant reopening a final adjudication merely to reach a different conclusion on facts already considered. The prior direction fixing interest at 9% per annum was a conscious exercise of judicial discretion after accounting for repayment of the entire principal and a substantial part of interest. Although contractual terms ordinarily bind the parties, the relief in proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 must accord with the insolvency-resolution objective and cannot convert closed insolvency proceedings into a mechanism for recovery of disputed enhanced contractual interest. A default rate of 3% per month, producing a substantially enlarged claim after discharge of principal, was disproportionate in the circumstances. Liberty to seek modification did not itself establish entitlement to modification.

Conclusion: The contractual default interest of 3% per month was not substituted for the judicially fixed interest of 9% per annum on the balance amount.

Issues: (i) Whether post-CIRP transfers from the corporate debtor's bank account to recipients for pre-CIRP work violated the moratorium and warranted remittance; (ii) Whether the alleged availability of the former remedy under Section 74 barred recourse to the Tribunal's jurisdiction for enforcing the moratorium.

Issue (i): Whether post-CIRP transfers from the corporate debtor's bank account to recipients for pre-CIRP work violated the moratorium and warranted remittance.

Analysis: The transfers were admittedly made after commencement of CIRP and during the moratorium, without the Resolution Professional's knowledge. The bank records established that funds credited to the corporate debtor were subsequently transferred to the appellant. Publication of the CIRP commencement and the statutory public announcement gave rise to deemed knowledge of the moratorium. The assertion that the funds were held in trust was unsupported, as no trust relationship or identifiable trust fund was established. The fact that underlying work related to a pre-CIRP period did not validate a post-moratorium disposition of the corporate debtor's assets.

Conclusion: The transfers violated the moratorium under Section 14(1)(b), and the direction to remit the amount with interest was valid, against the appellant.

Issue (ii): Whether the alleged availability of the former remedy under Section 74 barred recourse to the Tribunal's jurisdiction for enforcing the moratorium.

Analysis: The contention based on Section 74 had neither been urged before the adjudicating authority nor raised as a ground in appeal. Further, Section 74 had been omitted with effect from 06.04.2026. In any event, the contention did not displace the established fact of transactions undertaken during the moratorium or invalidate recourse to enforce the statutory prohibition.

Conclusion: The former Section 74 remedy did not bar recourse under Sections 60(5) and 14(1)(b), against the appellant.

Final Conclusion: The recovery directions enforcing the moratorium over the corporate debtor's assets remain legally sustainable.

Ratio Decidendi: A post-CIRP transfer of the corporate debtor's funds during a subsisting moratorium is prohibited unless a legally established exception applies; pre-CIRP origin of the underlying transaction and an unproved claim of trust do not remove the transfer from the moratorium.

Issues: Whether a CIRP admitted under Section 9 can be closed by the Appellate Tribunal on the basis of a settlement reached after admission, before constitution of the Committee of Creditors.

Analysis: The settlement was executed after commencement of CIRP and expressly recognised that closure was subject to compliance with the Insolvency and Bankruptcy Code, 2016. The amended Section 12A imposes a non obstante statutory framework for withdrawal of an admitted application and bars withdrawal before constitution of the Committee of Creditors. The authorities relied upon concerned settlements completed before admission of CIRP and predated or did not attract the amended statutory position.

Conclusion: The post-admission settlement could not justify closure of CIRP in the appeal; the IRP may seek withdrawal before the Adjudicating Authority under Section 12A of the Insolvency and Bankruptcy Code, 2016.

Issues: (i) Whether the admission order was vitiated by denial of natural justice through inadequate service of the insolvency petition; (ii) Whether the application under Section 7 was barred by limitation; (iii) Whether a bona fide defence to the existence of financial debt and default was disclosed.

Issue (i): Whether the admission order was vitiated by denial of natural justice through inadequate service of the insolvency petition.

Analysis: Repeated notices were directed through speed post and e-mail over several hearings and months, with further opportunities granted after the initial postal failure. The registered office had admittedly remained closed for years, notwithstanding the continuing obligation to maintain an office capable of receiving communications. Service by e-mail was independently permissible, and no material established failure of that mode or mala fide avoidance of service. The opportunities afforded satisfied the requirement of reasonable opportunity before proceeding ex parte.

Conclusion: The admission order was not vitiated by violation of the principles of natural justice; this issue was decided against the Appellant.

Issue (ii): Whether the application under Section 7 was barred by limitation.

Analysis: The corporate guarantee was payable on demand. The guarantee expressly provided that acknowledgments by the principal borrower would operate as acknowledgments by the corporate guarantor. Written settlement proposals made before expiry of the applicable periods acknowledged the outstanding liability and, under Section 18 of the Limitation Act, successively renewed limitation. The Section 7 application was filed within the renewed limitation period. The absence of established service of the earlier guarantee-invocation notice did not alter that result.

Conclusion: The Section 7 application was within limitation; this issue was decided against the Appellant.

Issue (iii): Whether a bona fide defence to the existence of financial debt and default was disclosed.

Analysis: The sanction and disbursement of the loan, execution of the corporate guarantee, NPA classification, and subsequent written acknowledgments of liability were undisputed. No case of discharge, revocation or unenforceability of the guarantee, or inaccuracy of the claimed amount was raised. The material therefore established financial debt and default for the limited inquiry required under Section 7.

Conclusion: No bona fide defence to financial debt and default was disclosed; this issue was decided against the Appellant.

Final Conclusion: The initiation of the corporate insolvency resolution process on the established debt and default remains legally sustainable.

Ratio Decidendi: A contractual stipulation making a principal borrower's written acknowledgment binding upon a corporate guarantor permits that acknowledgment to extend limitation against the guarantor, provided it is made within the subsisting limitation period.

Issues: (i) Whether suspended directors have locus to challenge the resolution plan? (ii) Whether the approval of the Resolution Plan is liable to be set aside on the ground that the suspended director was not supplied a copy of the Resolution Plan before the plan-approval hearing? (iii) Whether M/s Suraj Garg was ineligible to submit the Resolution Plan merely because he was a practising Chartered Accountant? (iv) Whether the alleged OTS rendered continuation of the CIRP and approval of the Resolution Plan impermissible? (v) Whether the CoC acted illegally by approving the Resolution Plan of M/s Suraj Garg despite the alleged higher offer from another applicant? (vi) Whether the alleged non-provision for Government dues makes the Resolution Plan contrary to Section 30(2) of the Code? (vii) Whether there is any material irregularity in the CIRP or in the exercise of powers by the Resolution Professional which would justify interference under Section 61 of the Code?

Issue (i): Whether suspended directors have locus to challenge the resolution plan?

Analysis: Section 24(3)(b) of the Insolvency and Bankruptcy Code, 2016 recognises suspended directors as non-voting participants in Committee of Creditors meetings. Since an approved resolution plan binds the erstwhile management under Section 31, a suspended director is an aggrieved person entitled to challenge plan approval within the statutory appellate framework.

Conclusion: Suspended directors have locus to challenge approval of a resolution plan.

Issue (ii): Whether the approval of the Resolution Plan is liable to be set aside on the ground that the suspended director was not supplied a copy of the Resolution Plan before the plan-approval hearing?

Analysis: A suspended director is entitled to meaningful participation in the CIRP and access to relevant plan material for that purpose. However, the directors had received the Committee of Creditors minutes, did not furnish the required confidentiality undertaking for sharing the plans, and identified no specific objection that non-supply prevented them from raising. The plan had also been approved unanimously after negotiation and a challenge process. Under Section 61, a procedural objection warrants interference only upon demonstrated prejudice or a material effect on approval of the plan.

Conclusion: Non-supply of the plan before the approval hearing did not vitiate the approval in the absence of demonstrated prejudice.

Issue (iii): Whether M/s Suraj Garg was ineligible to submit the Resolution Plan merely because he was a practising Chartered Accountant?

Analysis: Section 29A of the Insolvency and Bankruptcy Code, 2016 contains the exhaustive statutory disqualifications for a resolution applicant and does not disqualify a practising chartered accountant merely by professional status. Clause (11) of Part I of the First Schedule to the Chartered Accountants Act, 1949 and Regulation 190A of the Chartered Accountants Regulations, 1988 do not bar a practising chartered accountant from acting as a resolution applicant, provided the accountant does not become a whole-time director. No prohibited whole-time directorship or other statutory disqualification was established.

Conclusion: A practising chartered accountant was not ineligible to submit the resolution plan on the facts established.

Issue (iv): Whether the alleged OTS rendered continuation of the CIRP and approval of the Resolution Plan impermissible?

Analysis: Following admission of an insolvency application, withdrawal of CIRP is governed exclusively by Section 12A of the Insolvency and Bankruptcy Code, 2016, requiring the prescribed application and approval of at least 90% voting share of the Committee of Creditors. An alleged settlement proposal and part payment, without a Section 12A withdrawal, cannot terminate CIRP or restrict consideration of resolution plans. The asserted settlement also did not ultimately materialise.

Conclusion: The alleged OTS did not invalidate continuation of CIRP or approval of the resolution plan.

Issue (v): Whether the CoC acted illegally by approving the Resolution Plan of M/s Suraj Garg despite the alleged higher offer from another applicant?

Analysis: The hybrid challenge process had closed before the revised offer was communicated. Reopening a concluded bidding process for post-closure revisions would undermine certainty and enable manipulation. In any event, Section 30(4) of the Insolvency and Bankruptcy Code, 2016 permits the Committee of Creditors to assess feasibility, viability, implementation capability and stakeholder interests; it is not required to select the numerically highest offer. No fraud, discrimination or legally prohibited consideration affecting the unanimous decision was proved.

Conclusion: Approval of the selected plan did not unlawfully depart from the Committee of Creditors' commercial wisdom.

Issue (vi): Whether the alleged non-provision for Government dues makes the Resolution Plan contrary to Section 30(2) of the Code?

Analysis: The tax demand crystallised shortly before conclusion of voting and had not been shown to be an admitted claim requiring treatment in the plan. Upon approval under Section 31 of the Insolvency and Bankruptcy Code, 2016, the plan binds Government authorities and claims outside it stand extinguished under the clean slate principle. Statutory dues do not automatically obtain parity with secured creditors; the explanation to Section 3(31) excludes a security interest arising merely by operation of law. The concerned Government authority had not challenged the plan approval.

Conclusion: The alleged non-provision for Government dues did not establish non-compliance with Section 30(2) of the Code.

Issue (vii): Whether there is any material irregularity in the CIRP or in the exercise of powers by the Resolution Professional which would justify interference under Section 61 of the Code?

Analysis: The record showed issuance of Form G, identification of eligible applicants, circulation of the information memorandum and evaluation matrix, valuation, due diligence, opportunities to cure plans, a hybrid challenge, consideration by the Committee of Creditors and unanimous plan approval. Allegations concerning the OTS, the revised offer, collusion and association with an insolvency professional entity were not substantiated as a material irregularity within Section 61(3) of the Insolvency and Bankruptcy Code, 2016. The suspended directors' own non-cooperation did not support reopening the completed statutory process.

Conclusion: No material irregularity in CIRP or in the Resolution Professional's exercise of power was established.

Final Conclusion: The approved and implemented resolution plan remained legally sustainable because no statutory non-compliance, demonstrated prejudice, or material irregularity was proved.

Ratio Decidendi: Appellate review of an approved resolution plan is confined to statutory non-compliance and material irregularity, and cannot displace the Committee of Creditors' commercial wisdom absent a demonstrated legal infirmity.

Issues: (i) Jurisdiction under Section 60(5)(c) of the Code to determine mortgage priority and the character of an asset in liquidation; (ii) Priority between the earlier second pari-passu charge and the subsequent simple mortgage; (iii) Effect of alleged non-registration of the earlier charge under the Companies Act, 2013; (iv) Effect of a pending unstayed review against the debt recovery order; (v) Compatibility of valid assignment deeds with inclusion of the assigned security interest in the liquidation estate; (vi) Validity of rejection of the assignee's delayed claim and directions to deliver title deeds.

Issue (i): Jurisdiction under Section 60(5)(c) of the Code to determine mortgage priority and the character of an asset in liquidation.

Analysis: Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 expressly extends to questions of priority arising out of or relating to liquidation. Determining whether a corporate debtor's asset forms part of the liquidation estate and the encumbrances affecting it is foundational to the Liquidator's statutory functions under Sections 35 and 36. The priority determination was also inseverably connected with the declarations sought and had been invited on merits in the proceedings below.

Conclusion: The Adjudicating Authority had jurisdiction to determine the competing mortgage priorities and the status of the property in liquidation. This issue is against the Appellant.

Issue (ii): Priority between the earlier second pari-passu charge and the subsequent simple mortgage.

Analysis: The original first mortgage was discharged when the underlying facility was closed. The already subsisting second pari-passu charge consequently moved into first priority. The simple mortgage created on the same date secured separate facilities granted to a different borrower and was a fresh transaction, not a continuation of the discharged mortgage. Under Section 48 of the Transfer of Property Act, 1882, the later-created mortgage remained subject to the previously vested charge. A subsequent internal communication could not retrospectively alter third-party rights already created, and an assignee could acquire no superior right to that of its assignor.

Conclusion: The earlier second pari-passu charge ranks in priority, and the subsequent simple mortgage is subordinate. This issue is against the Appellant.

Issue (iii): Effect of alleged non-registration of the earlier charge under the Companies Act, 2013.

Analysis: Registration under Section 77 of the Companies Act, 2013 provides constructive notice and protects the Liquidator and creditors dealing without notice; it is not the mode by which the underlying charge is created. The equitable mortgage and memorandum created rights binding on the parties and persons claiming with notice. The subsequent mortgagee could not invoke non-registration to obtain a priority otherwise unavailable to it, while any grievance concerning charge-register entries lay in rectification under Section 87 of the Companies Act, 2013. The absence of express reference to Sections 77 and 79 did not render the order per incuriam.

Conclusion: The alleged absence of registration does not displace the priority of the earlier charge or invalidate the impugned determination. This issue is against the Appellant.

Issue (iv): Effect of a pending unstayed review against the debt recovery order.

Analysis: Mere pendency of review does not suspend the operation of an order in the absence of a stay. Further, priority followed independently from the mortgage chronology and Section 48 of the Transfer of Property Act, 1882; the debt recovery order was corroborative rather than the sole basis for the finding.

Conclusion: The pending unstayed review does not affect the determination of priority. This issue is against the Appellant.

Issue (v): Compatibility of valid assignment deeds with inclusion of the assigned security interest in the liquidation estate.

Analysis: The validity of assignments between assignor and assignee is analytically distinct from the enforceability of the assigned security outside liquidation. The assigned mortgage was subordinate, and neither the original secured creditor nor its assignees timely intimated an election to realise the security outside liquidation under Section 52 of the Insolvency and Bankruptcy Code, 2016 and Regulation 21A(1) of the IBBI (Liquidation Process) Regulations, 2016. Regulation 21A(3) therefore produced the statutory consequence that the security interest lapsed into the liquidation estate.

Conclusion: Valid assignment deeds may subsist while the assigned security interest is treated as part of the liquidation estate by operation of Regulation 21A. This issue is against the Appellant.

Issue (vi): Validity of rejection of the assignee's delayed claim and directions to deliver title deeds.

Analysis: An assignee acquires no better right than the assignor. The delayed claim and failure to comply with Regulation 21A affected the assignee equally, and the statutory consequence did not depend on proof of particular prejudice to liquidation. Once the property formed part of the liquidation estate, custody of its original title documents necessarily followed from the Liquidator's duties under Section 35 of the Insolvency and Bankruptcy Code, 2016.

Conclusion: Rejection of the delayed claim and the direction to hand over the original title deeds require no interference. This issue is against the Appellant.

Final Conclusion: The property and the associated title documents remain available for administration within the liquidation estate, with the later assigned security incapable of being enforced outside that process.

Ratio Decidendi: In liquidation, the Adjudicating Authority may determine charge priority over a corporate debtor's asset; a later mortgage remains subordinate to an earlier subsisting charge, and an assignee who fails to timely elect realisation under the liquidation regulations takes the security subject to its statutory inclusion in the liquidation estate.

Issues: (i) Whether a sale process for corporate-debtor assets initiated during the resolution-plan implementation stage could validly be completed by the liquidator after commencement of liquidation; (ii) Whether former employees established a legally sustainable challenge to the aircraft sale on allegations of undervaluation, absence of fresh valuation, and irregularity, notwithstanding protection of their dues under the liquidation waterfall.

Issue (i): Whether a sale process for corporate-debtor assets initiated during the resolution-plan implementation stage could validly be completed by the liquidator after commencement of liquidation.

Analysis: The proposed sale had been approved through the resolution process, and directions for its completion had already been sustained in prior appellate proceedings. After liquidation commenced, the Stakeholders' Consultation Committee adopted the earlier sale decision and approved completion of the process. The liquidation framework permits the liquidator to take custody and control of assets and sell them; it contains no prohibition against completing a sale process validly initiated before liquidation. The sale was also carried forward under continuing judicial supervision.

Conclusion: The liquidator could validly complete the pre-liquidation sale process during liquidation. This issue is against the appellants.

Issue (ii): Whether former employees established a legally sustainable challenge to the aircraft sale on allegations of undervaluation, absence of fresh valuation, and irregularity, notwithstanding protection of their dues under the liquidation waterfall.

Analysis: The allegations did not disclose material irregularity or illegality in the sale process. The sale had proceeded from an earlier competitive process and was completed after the relevant stakeholder approval. The former employees' entitlement was confined to payment of their admitted dues in the statutory order of priority. Their interests had already been protected through the liquidation distribution mechanism, and no material was shown to demonstrate an unlawful diminution of the liquidation estate.

Conclusion: The former employees failed to establish any illegality or material irregularity warranting interference with the completed sale; their dues remain payable in accordance with the statutory waterfall. This issue is against the appellants.

Final Conclusion: The completed sale remains valid, and employee claims are to be addressed through the statutory liquidation distribution framework.

Ratio Decidendi: A liquidator may complete a sale process lawfully initiated before liquidation where it is adopted through the liquidation process and no material illegality or irregularity in the sale is established; employee dues are governed by the statutory liquidation waterfall.

Issues: Whether the personal guarantor's application under Section 94 of the Insolvency and Bankruptcy Code, 2016 was within limitation on the basis of one-time settlement proposals made by the guarantor.

Analysis: The limitation period for a personal guarantor to initiate proceedings under Section 94 commences upon invocation of the guarantee. Section 18 of the Limitation Act, 1963 permits a fresh limitation period only where the acknowledgment in writing is signed by the party against whom the relevant right is asserted. An OTS proposal made by the guarantor is a unilateral admission and cannot be relied upon by that guarantor to extend limitation. The guarantee was invoked on 10.09.2019, whereas the Section 94 application was instituted only on 18.12.2025, beyond the applicable three-year period under Article 137 of the Limitation Act, 1963.

Conclusion: The Section 94 application was barred by limitation; the guarantor's OTS proposals did not extend the limitation period in the guarantor's favour.