Authority: National Company Law Appellate Tribunal, Chennai (Justice N. Seshasayee - Member (Judicial) and Jatindranath Swain - Member (Technical))

Order Date: 28 September 2026

Case Overview

The National Company Law Appellate Tribunal (NCLAT) heard an appeal (Company Appeal (AT) (CH) (Ins) No. 252/2026) filed by Arjun Govind Raghupathy, suspended director of BGR Energy Systems Ltd. (Corporate Debtor), against the initiation of Corporate Insolvency Resolution Process (CIRP).

The appellant's counsel, Mr. PS. Raman, Senior Advocate, submitted that the default complained of by the financial creditor (National Asset Reconstruction Company Ltd. & Anr.) had been amicably settled, though formal documentation was pending. Despite this settlement, the appellant intended to argue the case on merits since the proceeding had assumed the character of a proceeding in rem.

An operational creditor filed IA No. 1420/2026 seeking intervention, claiming the corporate debtor owed it approximately ₹4.73 crores. This creditor had previously instituted a petition under Section 9 of the IBC, which was dismissed due to the CIRP order against BGR Energy. The operational creditor's case had been stayed by the Andhra Pradesh High Court for about 20 months before the stay was vacated on 24 June 2026. The intervenor expressed concern that the Adjudicating Authority was reluctant to proceed with its Section 9 application due to the present appeal.

The tribunal observed that the intervenor's rights were not in peril, outlining two possibilities: if the appellant succeeds on merit, the Adjudicating Authority would be free to pronounce final orders on the Section 9 petition; if the appeal lacks merit, the CIRP would commence during which the intervenor could prefer its claim.

Final Outcome

The tribunal dismissed IA No. 1420/2026 (the intervention application) with the above observations. Both sides were directed to submit pointed notes of submission by 9 October 2026. The appeal was adjourned to 16 November 2026 for hearing at 12 PM. All existing interim orders passed by the tribunal were continued until the next date of hearing.

Topics: Corporate Insolvency, Debt Settlement, NCLAT Proceedings