NCLAT Upholds IBC Over SEBI Appeals in Religare Finvest Case

The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal by SEBI to recover penalties in the Religare Finvest case, citing IBC rules that freeze claims upon liquidation commencement. The liquidator refused SEBI's claims, submitted late, and NCLAT upheld this, emphasizing the inflexibility of IBC regulations.

The National Company Law Appellate Tribunal (NCLAT) has dismissed an appeal by the Securities and Exchange Board of India (SEBI) concerning recovery of penalties related to the Religare Finvest case. The tribunal maintained that under the Insolvency and Bankruptcy Code (IBC), claims are frozen at the start of liquidation.

SEBI's attempt to claim a penalty of Rs 21.80 lakh from Annies Apparel was denied, as the liquidation process had started long before SEBI filed its claim, 797 days past the deadline. The liquidator rightfully adhered to IBC regulations by rejecting SEBI's late submission.

The tribunal emphasized the inflexible nature of the IBC in maintaining the integrity of the liquidation commencement date. SEBI's appeal was dismissed, reinforcing the legal precedent that liquidation proceedings are governed strictly by statutory provisions.