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

Order Date: 03.07.2026

Case Overview

The National Company Law Appellate Tribunal (NCLAT) heard three connected appeals (Company Appeal (AT) (Insolvency) Nos. 1155, 1156, and 1157 of 2026) filed by Aditya Birla Capital Limited, a member of the erstwhile Committee of Creditors. The appeals challenged the order dated 01.06.2026 passed by the adjudicating authority (NCLT) that terminated the Corporate Insolvency Resolution Process (CIRP) for three corporate debtors: Mothers Pride Education Personna Private Limited, Presidium Educational Institution Private Limited, and Mothers Pride Education Institution Private Limited.

The NCLT had terminated the CIRP while considering an application filed by the Resolution Professional for extension of the CIRP period. The termination order effectively recalled the admission order of the CIRP. The appellant argued that no application was filed under Section 65 of the Insolvency & Bankruptcy Code, 2016 (IBC) by any stakeholder, and the adjudicating authority had not made any finding that ingredients of Section 65 (fraudulent or malicious initiation of proceedings) were present.

The NCLAT noted that the NCLT's order contained observations in paragraph 3(xii) suggesting prima facie indications that the insolvency process may not have been conducted bona fide, citing opaque structuring of operations outside the corporate debtor, absence of financial traceability, and material discrepancies in the Court Commissioner's Report. However, the NCLT explicitly stated it was not returning a definitive finding of fraud.

Final Outcome

The NCLAT granted an interim stay on the impugned order dated 01.06.2026, finding that the appellant made out a case for interim relief. The tribunal directed that if the Resolution Professional had handed over the corporate debtors to the suspended directors, steps must be taken to regain control. Notices were issued to respondents, with HDFC (respondent Nos. 5 & 6) appearing and accepting notice. Replies are to be filed within two weeks, followed by rejoinders within two weeks. All appeals are listed for hearing on 12th August 2026.

Topics: Insolvency Proceedings, Legal Appeals