The NCLT dismissed the liquidator’s application on preferential and fraudulent transactions due to the failure of service notice to the suspended management as mandated under the IBC.
NCLT Decision on Liquidator’s Plea
The NCLT has dismissed an application filed by a liquidator under Sections 43 and 66 of the Insolvency and Bankruptcy Code (IBC), citing the failure to serve notice to the suspended management. This ruling underscores the importance of procedural compliance in insolvency proceedings.
The tribunal noted that the absence of proper notice to the affected parties is a critical flaw that could undermine the integrity of the proceedings, highlighting that due process must be followed in the interests of justice. The NCLT reiterated that without notifying the suspended management about the liquidator's claims, any action for preferential and fraudulent transactions cannot proceed.
This ruling serves as a reminder for practitioners to ensure all necessary procedural steps are followed before advancing claims under the IBC, particularly in matters involving liquidation and alleged fraudulent transactions, to avoid dismissals based on technical grounds.
Citations
- NCLT Order (2026) NCLT 1448677
