Mumbai: India’s appellate insolvency tribunal, the National Company Law Appellate Tribunal (NCLAT), has set aside an earlier order of the National Company Law Tribunal (NCLT) that rejected an insolvency petition filed by Culver Max Entertainment, formerly known as Sony Pictures Networks India.
In its ruling, the appellate tribunal remanded the matter back to the NCLT’s Cuttack bench, directing it to hear the case afresh after giving the broadcaster an opportunity to rectify procedural deficiencies in its application.
The NCLAT, in an order dated December 10, 2025, said the exercise should preferably be completed within two months.
NCLAT flags procedural lapse by NCLT
A two-member NCLAT bench comprising Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) held that the April 30, 2024 order of the NCLT suffered from “illegality” and could not be sustained in law.
Without expressing any view on the merits of the insolvency plea, the appellate tribunal observed that the adjudicating authority ought to have granted Culver Max an opportunity to cure defects in its filing before dismissing the application outright.
“In the circumstances, without expressing any opinion on the merits of the appeal, we set aside the impugned order and remand the matter to the NCLT to provide an opportunity to the appellant to cure the defects in authorisation, after which the matter may be heard on merits,” the tribunal said, according to a PTI report.
Why the insolvency plea was rejected earlier
The case arises from a Section 9 application under the Insolvency and Bankruptcy Code (IBC) filed by Culver Max against Odisha-based Rechargekit Fintech.
On April 30, 2024, the NCLT had dismissed the plea on the ground that the broadcaster had failed to place on record a valid Board of Directors’ resolution authorising the filing of the insolvency application. The tribunal held that no ratification of the action had been demonstrated through a formal board decision.
Culver Max subsequently challenged this dismissal before the appellate tribunal.
Reliance on IBC’s cure-and-correct provision
During the appeal, Culver Max argued that the NCLT was required under Section 9(5)(ii) of the IBC to first notify the applicant of defects and allow time to rectify them, instead of rejecting the plea on maintainability grounds.
The NCLAT agreed with this contention, noting that the law clearly mandates issuance of notice to the applicant and allows up to seven days for curing defects in an incomplete application.
“It was the duty of the NCLT to at least put the appellant on notice, requiring rectification of defects in the application. Admittedly, such an opportunity was not given in the present case,” the appellate tribunal observed.
Consequently, the NCLAT held that the rejection order could not stand and directed the adjudicating authority to re-examine the matter after procedural compliance.
Under Section 9(5)(ii) of the IBC, while the NCLT has the power to reject an incomplete insolvency application, it is also obligated to communicate the defects and provide the applicant a limited window to correct them before dismissal.
