Authority: National Company Law Appellate Tribunal, Principal Bench, New Delhi

Order Date: 30 October 2026

Case Overview

The appeal was filed by Ramen Deka, suspended Director of the Corporate Debtor, under Section 61(1) of the Insolvency and Bankruptcy Code, 2016, challenging the order dated 21 August 2026 passed by the NCLT, Guwahati (Adjudicating Authority). The NCLT had allowed UCO Bank's application under Section 7 of the Code (CP (IB) No. 26/GB/2025) and initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.

The appellant contended that the Adjudicating Authority committed illegality by deciding the Section 7 application without first disposing of IA No. 127 of 2026, which raised serious questions regarding the quantum of debt, adjustment of payments, sale proceeds, validity of default, and pendency of proceedings before the Debt Recovery Tribunal (DRT), Guwahati Bench.

UCO Bank claimed an amount of ₹20,300,950.93 as on 31 July 2025, including principal, interest, and penal interest under different loan accounts. The appellant disputed this amount, arguing that the bank failed to provide a complete and verifiable statement of account and properly reconcile payments. The appellant specifically claimed that the bank had realized approximately ₹1.3 crore from the sale of mortgage property, ₹4,000,000 from property at Chindarai Nagar, Bhangagarh, Guwahati, and approximately ₹50 lakhs from property at Village Digheli, District Nalbari, Assam. If these amounts were deducted, the balance would be below the ₹1 crore threshold under Section 4 of the Code.

The appellant also challenged the Record of Default issued through National e-Governance Services Limited (NeSL) as neither authenticated nor acknowledged by the Corporate Debtor. The pendency of SARFAESI proceedings before DRT, where stay was granted challenging possession, valuation and sale of secured assets, was highlighted. The appellant alleged that the bank used IBC as a recovery mechanism after rejecting One-Time Settlement proposals of ₹8.20 crores and ₹9.75 crores.

The NCLT addressed multiple issues in its impugned order, including whether the default amount met the threshold of ₹1,00,00,000 prescribed under Section 4. On this specific issue, the NCLT observed that the Corporate Debtor failed to demonstrate the date on which the alleged ₹1,30,00,000 was realized, and the threshold must be assessed with reference to the debt due as on the date of default (15 March 2024, NPA classification date), not sums realized later. The NCLT also noted that since the SARFAESI sale itself was challenged by the Corporate Debtor as void ab initio, the realization could not be treated as appropriated until the DRT proceedings attained finality.

Final Outcome

The NCLAT, after hearing the appellant's counsel and perusing the impugned order, found that the NCLT had considered the appellant's objections and passed a reasoned order. The tribunal concluded that this was not a case where ad interim injunction could be granted without providing opportunity of hearing to the respondents (UCO Bank). The NCLAT issued notice to the respondents regarding both the appeal and stay application, directing the appellant to complete necessary steps within three working days. The matter was listed for admission hearing on 26 November 2026.

Topics: Insolvency Proceedings, Debt Threshold Dispute, SARFAESI Conflict