Can a stock exchange continue to freeze the assets of a corporate debtor even after the commencement of insolvency proceedings? More importantly, does such regulatory action survive the overarching framework of the Insolvency and Bankruptcy Code, 2016 (“IBC”), which seeks to preserve and maximize the value of the debtor’s assets?
These questions recently came into sharp focus before the National Company Law Appellate Tribunal (“NCLAT”) in two appeals involving BSE Limited, wherein the Tribunal upheld the power of the National Company Law Tribunal (“NCLT”) to direct the de-freezing of demat accounts of corporate debtors. The ruling marks a significant development in the evolving jurisprudence at the intersection of insolvency…