Authority: National Company Law Tribunal, Amaravati Bench
Order Date: 29 June 2026
Case Overview
The National Company Law Tribunal (NCLT) Amaravati Bench heard three Interlocutory Applications (IAs) in the matter of Axis Bank Limited (Financial Creditor) versus Kallam Brothers Cottons Pvt. Ltd. (Corporate Debtor). The main application IA (IBC)/247/2026 was filed by a promoter of the Corporate Debtor under Sections 60(5) and 240A of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules, 2016. The applicant sought waiver or relaxation of the Earnest Money Deposit (EMD) condition of ₹2.5 crore prescribed under Form-G/RFRP for participation in the Corporate Insolvency Resolution Process (CIRP), permission to submit Expression of Interest and Resolution Plan without upfront EMD payment, and interim orders permitting participation pending disposal.
The applicant argued that rigid compliance with the EMD requirement would defeat the beneficial object underlying Section 240A of the IBC, 2016 for MSMEs. During hearings, the Resolution Professional's counsel submitted that the Committee of Creditors (CoC) in its 7th meeting held on 29 May 2026 had already passed a resolution with 100% voting share for liquidation of the Corporate Debtor, and a separate liquidation application had been filed and was under scrutiny before the Registry.
Final Outcome
The NCLT dismissed IA (IBC)/247/2026, stating that considering the CoC's unanimous resolution for liquidation and the present stage of the liquidation application, they were not inclined to pass any orders in the present application.
For IA (IBC)/218/2026 and IA (IBC)/219/2026, the tribunal granted respondents two weeks to engage counsel and file replies, listing both matters for hearing on 15 July 2026. The registry was directed to issue fresh notices to several respondents in IA (IBC)/219/2026 by Speed Post and place proof of service on record within one week.
Topics: Insolvency Proceedings, MSME Resolution, Liquidation