The NCLAT has ruled in favor of SBI, confirming that Videocon's foreign oil and gas assets are to remain outside the Corporate Insolvency Resolution Process (CIRP) of Videocon Industries Ltd. and its affiliates, relying on the commercial wisdom of the Committee of Creditors.
NCLAT Ruling on Videocon's Foreign Assets
The National Company Law Appellate Tribunal (NCLAT) has ruled that the foreign oil and gas assets of Videocon Industries, held through various entities, will not be included in the Corporate Insolvency Resolution Process (CIRP) for Videocon Industries Ltd. and its 12 group companies. This judgment was delivered in favor of the State Bank of India (SBI) based on the assertion that the exclusion of these assets aligns with the commercial wisdom exercised by the Committee of Creditors (CoC).
The NCLAT observed that the CoC has the autonomy to make decisions regarding the assets included in the CIRP, and their decision to exclude the foreign assets was deemed justifiable. The ruling relies on the principle that operational creditors should not be adversely affected by the inclusion of assets unconnected with the domestic insolvency.
The tribunal stated, "The decision to keep specific assets outside the CIRP is a manifestation of the CoC’s prudent judgment in safeguarding creditors' interests."
This ruling is significant for practitioners as it emphasizes the role of creditor judgement and discretion in determining the composition of the CIRP, which may influence future insolvency proceedings involving multinational entities.
Citations
- NCLAT Order (2026) 1 NCLAT 1
