Authority: National Company Law Tribunal Mumbai Bench-I

Order Date: 15.07.2026

Case Overview

The application was filed by Mr. Anish Niranjan Nanavaty, the Resolution Professional (RP) of Reliance Communications Infrastructure Limited (RCIL), under Section 66 of the Insolvency and Bankruptcy Code, 2016. The RP sought declaration of two transactions from 2017 as fraudulent:

1. Impugned Transaction I: Purchase of Optical Fibre Cable Right of Way by RCIL from Netizen Engineering Pvt. Ltd. (NEPL) for ₹3,037.20 crores on 28.05.2017, which NEPL had purchased from MP Network Pvt. Ltd. for ₹3,034.50 crores on the same day, resulting in an alleged loss of ₹2.70 crores to RCIL.

2. Impugned Transaction II: Write-off and provisioning of receivables worth ₹2,526.58 crores due from NEPL that were assigned to RCIL by various Reliance group companies including Reliance Communications Limited and Reliance Infratel Limited.

The application was based on a transaction audit conducted by M/s Batliboi and Purohit, Chartered Accountants, which identified these transactions as potentially fraudulent. The RP alleged these transactions were undertaken in connivance with related parties and increased RCIL's liabilities, detrimental to creditors' interests.

The tribunal analyzed the ledger account of NEPL and found that the adjustments had reduced receivables from NEPL by ₹19.18 crores (including the ₹2.70 crore difference). However, the tribunal noted that the impairment provision of ₹2,271.56 crores was merely an accounting entry mandated by accounting standards and did not extinguish RCIL's right to recover these amounts.

The tribunal referenced two key judicial precedents:

  • Renuka Devi Rangaswamy vs Mr. Madhusudan Khemka which established that intent to defraud must be judged by its effect on the object of conduct
  • Regen Powertech Pvt Ltd vs M/s. Wind Construction Private Limited which emphasized that fraudulent trading requires a high degree of proof of fraudulent intent

The tribunal concluded that the applicant failed to establish the necessary ingredients under Section 66 of the IBC, particularly the fraudulent intent required to declare these transactions as fraudulent.

Final Outcome

The application IA 770/2021 was dismissed in its entirety. The tribunal found insufficient evidence to declare the transactions as fraudulent under Section 66 of the Insolvency and Bankruptcy Code, 2016.

Topics: Insolvency Proceedings, Fraudulent Transactions, Corporate Debt Resolution