corporate insolvency

The National Company Law Appellate Tribunal (NCLAT) has granted relief to Culver Max Entertainment, formerly Sony Pictures Network India, by overturning an order of the National Company Law Tribunal (NCLT) that had rejected its insolvency petition against an Odisha-based fintech company. The appellate tribunal has sent the matter back to the Cuttack bench of the NCLT, directing it to hear the case afresh after giving Culver Max an opportunity to address procedural shortcomings in its application. In its ruling, the NCLAT noted that the NCLT should have allowed Culver Max to rectify defects in the insolvency plea, particularly relating to authorisation, instead of dismissing it outright. Since no such opportunity was provided, the appellate tribunal held that the April 30, 2024 order of the NCLT was legally flawed. A two-member NCLAT bench comprising Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) clarified that it was not expressing any view on the merits of the insolvency case. However, it set aside the impugned order and instructed the NCLT to allow Culver Max to cure the defects and then adjudicate the matter on merits. The tribunal added that the process should ideally be completed within two months, as per its order dated December 10, 2025. The dispute arose after the NCLT dismissed Culver Max’s Section 9 application under the Insolvency and Bankruptcy Code (IBC) against Rechargekit Fintech. The tribunal had rejected the plea on the ground that no board resolution or formal authorisation approving the filing of the insolvency application was placed on record. Challenging this decision, Culver Max argued before the NCLAT that the NCLT should have invoked the proviso to Section 9(5)(ii) of the IBC, which allows applicants time to correct defects in an incomplete application. The appellate tribunal agreed, observing that it was the duty of the NCLT to notify the applicant and provide an opportunity to rectify such defects. Section 9(5)(ii) of the IBC empowers the NCLT to reject an incomplete application but also mandates that the applicant be given notice and up to seven days to remove the deficiencies. Since this procedure was not followed, the NCLAT ruled that the dismissal order could not be sustained. Source: PTI