In a significant legal development, India's National Company Law Appellate Tribunal (NCLAT) has provided relief to broadcaster Culver Max Entertainment, formerly known as Sony Pictures Network India. The appellate tribunal set aside an order by the National Company Law Tribunal (NCLT) that had rejected Culver Max's insolvency petition against an Odisha-based fintech company.
NCLAT Remands Case for Fresh Hearing
The NCLAT, in its ruling, has sent the matter back to the Cuttack bench of the NCLT. It directed the lower tribunal to hear the case afresh. Crucially, the appellate body emphasized that the NCLT should have given Culver Max a chance to correct the shortcomings in its application, an opportunity that was denied in the initial proceedings.
In an order dated 10 December 2025, a two-member NCLAT bench comprising Justice Yogesh Khanna (Member, Judicial) and Ajai Das Mehrotra (Member, Technical) stated that the NCLT order from 30 April 2024 suffers from illegality. The bench set aside the impugned order without commenting on the merits of the appeal itself.
The NCLAT explicitly stated, "We set aside the impugned order and remand the matter to the NCLT to provide an opportunity to the appellant to cure the defects in authorisation and thereafter, the matter may be heard on merits." It recommended that this exercise be completed preferably within two months.
Why NCLT Originally Dismissed the Petition
The dispute originated when the NCLT dismissed Culver Max's application filed under Section 9 of the Insolvency & Bankruptcy Code (IBC) against Rechargekit Fintech. The dismissal was on the grounds of maintainability. The NCLT noted that no resolution ratifying the legal action had been passed by Culver Max, and no corresponding decision of its Board of Directors was presented on record.
Unsatisfied with this outcome, Culver Max challenged the NCLT's decision before the appellate tribunal, the NCLAT.
Legal Provisions and NCLAT's Rationale
During the appeal, Culver Max argued that the NCLT should have granted it time and an opportunity to file a fresh Board Resolution or authorisation. This right is provided under Section 9(5)(ii) of the IBC. The company contended that instead of dismissing the application outright, the tribunal should have allowed for the rectification of defects.
The NCLAT agreed with this argument. It held that it was the duty of the NCLT to at least notify the appellant and require it to rectify the defect in the application. Since this opportunity was not granted, the original order was deemed illegal.
The appellate tribunal referenced the legal provision which states that before rejecting an incomplete application, the NCLT must issue a notice to the applicant. This notice should give the applicant up to seven days from the date of receipt to correct the filing defects. The NCLAT found that this procedural safeguard was not followed in the present case, leading to its decision to overturn the NCLT's order.
This ruling underscores the importance of procedural fairness in insolvency proceedings under the IBC, ensuring that applicants are given a fair chance to comply with technical requirements before their petitions are dismissed.
