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

Order Date: 30 October 2026

Case Overview

This appeal was filed by Mufin Green Finance Ltd., a listed RBI-regulated NBFC, against an order dated 14 September 2026 from the National Company Law Tribunal (NCLT), Ahmedabad Bench. The NCLT order, passed in IA No. 1349 of 2026 in CP (IB) No. 195 of 2025, appointed an independent forensic auditor to examine Mufin's books of accounts, ledger entries, vouchers, and electronic records. The specific purpose was to verify the date on which Mufin adjusted a security deposit of Rs. 1,34,14,800 (One Crore Thirty-Four Lakh Fourteen Thousand Eight Hundred Rupees) received from Gensol Engineering Ltd., the Corporate Debtor (CD).

The dispute originated from an operating lease and purchase agreement dated 24 March 2023 for 100 electric vehicles. Gensol paid the security deposit, which was non-refundable and adjustable against dues. Mufin alleged default from March 2025, issued a termination notice, forfeited the deposit, and repossessed 92 vehicles. The Corporate Insolvency Resolution Process (CIRP) for Gensol was initiated on 13 June 2025. The core legal issue was the date of the deposit's adjustment. Mufin's Resolution Professional (RP) argued that the adjustment date was crucial as an adjustment after the CIRP initiation date (13 June 2025) would violate the moratorium. Mufin initially stated in a 6 December 2025 email that the adjustment occurred on 21 July 2025 (post-CIRP) but later revised its claim in a 23 December 2025 communication to 16 April 2025 (pre-CIRP). Citing these contradictory positions, the RP filed an application seeking a refund and subsequently, in a rejoinder, prayed for a forensic audit to ascertain the true date.

The Appellant (Mufin) challenged the NCLT's jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) to order a forensic audit of a third party's books. It also argued that the relief of a forensic audit was not sought in the original application but was introduced later in the rejoinder, making it impermissible. The Respondent (RP) contended that the audit was essential to resolve the factual dispute created by Mufin's own contradictory statements and highlighted that a similar order for a forensic audit against Mufin in a related matter (IA No. 574 of 2026 concerning Gensol EV Lease Ltd.) had not been challenged.

Final Outcome

The NCLAT dismissed the appeal, upholding the NCLT's order. The appellate tribunal found no illegality in the impugned order, concluding that the necessity for the forensic audit arose solely from the contradictory stands taken by Mufin Green Finance Ltd. regarding the date of appropriation of the security deposit. The tribunal held that the NCLT acted within its jurisdiction to direct the audit for the limited purpose of ascertaining the factual truth of the adjustment date, which is a question arising out of the insolvency resolution process of the corporate debtor.

Topics: Insolvency Litigation, Forensic Audit, Moratorium