Supreme Court Dismisses SLPs Filed By Corporate Debtor, Directs To Approach NCLAT

Supreme Court Dismisses SLPs Filed By Corporate Debtor, Directs To Approach NCLAT

Introduction

The Supreme Court of India has dismissed special leave petitions filed by a Corporate Debtor against orders passed by the National Company Law Tribunal (NCLT). The Court held that the petitions were not maintainable and that the Corporate Debtor should have approached the National Company Law Appellate Tribunal (NCLAT) instead.

Factual Background

A petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) was admitted by the NCLT, and the Corporate Debtor was represented by its Promoter/Director. The Promoter/Director filed special leave petitions before the Supreme Court, challenging the orders passed by the NCLT.

Procedural Background

The Supreme Court considered the maintainability of the special leave petitions and observed that once a petition under Section 7 of the IBC is admitted, the Corporate Debtor should be represented by the Interim Resolution Professional/Resolution Professional, and not by its erstwhile management.

Issues Involved

1. Maintainability of Special Leave Petitions: Whether the special leave petitions filed by the Corporate Debtor were maintainable before the Supreme Court.

2. Representation of Corporate Debtor: Whether the Corporate Debtor could be represented by its Promoter/Director after admission of a petition under Section 7 of the IBC.

Reasoning and Analysis

The Supreme Court relied on the decision of a 3-Judge Bench in 'Gopal Krishnan MS & another Vs. Ravindra Beleyur & Another' and observed that the principle of declining to entertain a petition under Article 136 of the Constitution would equally apply to orders passed by the NCLT which would be appealable before the NCLAT.

Final Decision

The Supreme Court dismissed the special leave petitions, holding that they were not maintainable and that the Corporate Debtor should have approached the NCLAT instead. The matter was listed on 19th May, 2025 under the coram of Justice Sanjay Kumar and Justice K.V. Vishwanathan.

Implications

This decision highlights the importance of following the proper procedure for challenging orders passed by the NCLT and the need for Corporate Debtors to be represented by the Interim Resolution Professional/Resolution Professional after admission of a petition under Section 7 of the IBC.

In this case the petitioner was represented by Mr. Mathews J Nedumpara, Ms. Maria Nedumpara, Ms. Hemali Suresh Kurne, Mr. Shameem Fayiz, Mr. Chand Qureshi and Ms. Avantikaa Bhardwaj, Advocates.