The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently directed the NCLT, Mumbai Bench, to first decide an application filed by a sugar cooperative alleging that a Section 7 insolvency case against a company was collusive and could prejudice its rights.
The tribunal said this was warranted by the peculiar facts of the case. The cooperative was not a party to the insolvency proceedings but claimed that its sugar factory and property could be affected.
“In all judicial fairness, it was expected that the Tribunal by virtue of the Impugned Order, before closing the proceedings of CP No. 990/2024, it ought to have taken into consideration the application preferred by the appellant invoking provision contained under Section…