In a recent decision, the National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has dismissed an appeal lodged by Vistra ITCL (India) Ltd. The ruling emphasized that the jurisdiction of the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 (IBC) is inherently summary in nature and does not extend to the level of a civil court, particularly in addressing disputes stemming from Memorandums of Understanding (MoUs) and related specific performance issues.
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The appeal contested a decision made by NCLT Mumbai on May 19, 2023. NCLT Mumbai had accepted the Corporate Insolvency Resolution Process (CIRP) application, submitted under Section 7 of the IBC, by the Respondent against Evirant Developers Pvt. Ltd. (the Corporate Debtor). The appeal was initiated by Sanjay Pandurang Kalate, the Suspended Director of the Corporate Debtor.
This ruling underscores the limited scope of NCLT’s jurisdiction in resolving matters under the IBC, emphasizing its primary focus on efficient insolvency resolution processes rather than delving into complex disputes related to MoUs and specific performance. The decision serves as a reminder of the distinct nature of proceedings under the IBC, aligning them with their intended purpose – expeditious and efficient resolution of corporate insolvency issues.
