NCLAT rejects NCLT order, directs fresh hearing in Culver Max insolvency petition against fintech firm
India’s appellate court, the National Company Law Appellate Tribunal (NCLAT), has set aside the National Company Law Tribunal (NCLT) order dismissing Culver Max Entertainment’s insolvency petition against an Odisha-based fintech firm and offering relief to the broadcaster, formerly known as Sony Pictures Network India.
The NCLAT sent the case back to the Cuttack bench of the NCLT and directed the court to re-examine the matter.
The court also stated that the NCLT should have at least given Culver Max an opportunity to correct the defects in its application, an opportunity which was not given to the company in the present case.
In its decision on December 10, 2025, the appeal court said that this application should preferably be completed within two months.
Have you been denied the opportunity to correct defects?
A two-member NCLAT bench comprising Justices Yogesh Khanna (Member, Judiciary) and Ajai Das Mehrotra (Member, Technical) held that the NCLT order passed on April 30, 2024 was illegal and should be set aside.
“In the circumstances, without expressing any opinion on the merits of the appeal, we set aside the impugned order and remanded the matter back to the NCLT to provide the appellant with an opportunity to correct the defects in the authorization and thereafter the matter may be considered on merits,” the NCLAT said. PTI.
Why did NCLT reject the application?
On April 30, 2024, the NCLT bench dismissed Culver Max’s Chapter 9 application against Rechargekit Fintech. The case was dismissed on the grounds that no decision was made by the company approving the case and no such decision of the Board of Directors was recorded in this case.
However, this decision was later challenged by Culver Max before the appellate court NCLAT.
IBC provisions mentioned in the defense
The company further argued that instead of rejecting the application on the grounds of maintainability, NCLT should have given Culver Max time and opportunity to pass a fresh Board Resolution or authorization under Section 9(5)(ii) of the Insolvency and Bankruptcy Code.
NCLAT too accepted the contention and said: “It was the duty of NCLT to at least give notice to the appellant, asking him to correct the defect in the application and admittedly the said opportunity was not given in the present case.”
“Therefore, the impugned order is unlawful and must be set aside,” NCLAT said in its four-page decision.
However, the law also provides that before rejecting such an application, the court must notify the applicant and give him seven days to correct or correct the defects in the application.
Under Section 9(5)(ii) of the IBC, the NCLT has the power to reject an insolvency application if it is found to be incomplete and the body is required to communicate such decision to both the operational creditor and the corporate debtor.
However, the law also includes the provision that before rejecting such an application, the court must notify the applicant and give the applicant seven days from the date of delivery to correct or correct the deficiencies in the application. PTI in question.
