In a significant ruling that resolves a long-standing conflict between insolvency law and market regulation, the National Company Law Appellate Tribunal (NCLAT) has made it clear that regulatory restrictions cannot obstruct insolvency proceedings. The tribunal dismissed appeals filed by the Bombay Stock Exchange (BSE), upholding the authority of the National Company Law Tribunal (NCLT) to order the defreezing of Demat accounts of companies undergoing insolvency.
IBC Supremacy Over Securities Law
The ruling once again establishes the supremacy of the Insolvency and Bankruptcy Code (IBC). NCLAT observed that under Section 60(5) of the IBC, NCLT has wide-ranging powers to adjudicate any matter arising out of or in relation to insolvency…