NCLAT Overrules NCLT: Belgotex India Wins Insolvency Battle Against Puneet India

The National Company Law Appellate Tribunal (NCLAT) overturned an NCLT decision, favoring Belgotex India's insolvency plea against Puneet India. NCLAT found a 'patent illegality' in the previous ruling and remanded the case back for a fresh order after hearing all parties, allowing Belgotex's appeal to proceed.

The National Company Law Appellate Tribunal (NCLAT) recently annulled an NCLT decision that rejected Belgotex India's insolvency filing against Puneet India, citing a pre-existing dispute. NCLAT identified 'patent illegality' in how NCLT determined the default date and computed amounts under Section 10A of the Code.

The appellate body ordered that the case return to the New Delhi bench of NCLT for reevaluation after hearing from all parties involved. This decision comes from the recognition that the initial NCLT ruling could not withstand the test of law, according to the NCLAT finding.

Belgotex India initially filed the plea due to unpaid invoices totaling Rs 1.45 crore. Despite issuing several cheques, Puneet India's payments fell short, leading to the insolvency plea. NCLAT's decision refutes the NCLT's prior dismissal, asserting the need for a thorough reassessment.

(With inputs from agencies.)