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

Order Date: 03.07.2026

Case Overview

This order addresses three connected appeals (Company Appeal (AT) (Insolvency) No. 1155, 1156 & 1157 of 2026) filed by Aditya Birla Capital Limited, a member of the erstwhile Committee of Creditors. The appeals are against a common order dated 01.06.2026 passed by the Adjudicating Authority (NCLT). The impugned order was passed on an application filed by the Resolution Professional (RP) for an extension of the Corporate Insolvency Resolution Process (CIRP) period. However, instead of deciding on the extension, the Adjudicating Authority recalled the admission order of the CIRP and terminated the entire process for three Corporate Debtors: Mothers Pride Education Personna Private Limited, Mothers Pride Education Institution Private Limited, and Presidium Educational Institution Private Limited.

The Appellants contended that no application was filed by any stakeholder under Section 65 of the Insolvency & Bankruptcy Code, 2016 (IBC), which deals with fraudulent or malicious initiation of proceedings. They argued that the Adjudicating Authority itself did not arrive at a definitive finding that the ingredients of Section 65 were present. The NCLAT noted that the lower court's order contained observations (in paragraph 3(xii)) that the surrounding circumstances, including opaque structuring of operations, absence of financial traceability, and material discrepancies in a Court Commissioner's Report, prima facie indicated the insolvency process may not have been conducted bona fide, warranting consideration under Section 65.

Final Outcome

The NCLAT found that the Appellant made a case for an interim order. It held that without a conclusive finding that ingredients under Section 65 of the IBC were present, the CIRP proceedings could not have been terminated, especially while considering a mere application for extension. The tribunal issued notice to the respondents, including HDFC (Respondent Nos. 5 & 6). It granted an interim stay on the impugned order dated 01.06.2026. Crucially, it directed that if the RP had handed over the corporate debtor to the suspended board of directors following the termination, steps must be taken by the RP to retake control. The appeals were admitted and listed for the next hearing on 12th August, 2026, with timelines set for filing replies (within two weeks) and rejoinders (within two weeks thereafter).

Topics: Insolvency Litigation, NCLAT Order, CIRP Termination