NCLAT rejects NCLT order, directs fresh hearing in Culver Max insolvency petition against fintech firm

India's appellate tribunal, the National Company Law Appellate Tribunal (NCLAT), has set aside a National Company Law Tribunal (NCLT) order that rejected Culver Max Entertainment's insolvency petition against an Odisha-based fintech firm, offering relief to the broadcaster, which was formerly known as Sony Pictures Network India.

NCLAT passed the case back to the Cuttack bench of NCLT, directing the court to hear the matter afresh.

The tribunal also observed that NCLT should have at least given Culver Max an opportunity to rectify the defects in its application, an opportunity which was not given to the company in the present case.

In an order passed on 10 December 2025, the appellate tribunal said that this exercise should preferably be completed within two months.

Opportunity to rectify defects was denied?

A two-member NCLAT bench comprising Justice Yogesh Khanna (Member, Judicial) and Ajai Das Mehrotra (Member, Technical) held that the NCLT order, which was passed on 30 April 2024, suffers from illegality and needs to be set aside.

“In the circumstances, without expressing any opinion on the merit of the appeal, we set aside the impugned order and remand the matter to the NCLT to provide an opportunity to the appellant to cure the defects in authorisation and thereafter, the matter may be heard on merits,” NCLAT was quoted as saying by PTI.

Why did NCLT dismiss the application?

On 30 April 2024, the NCLT bench dismissed Culver Max's Section 9 application, which was filed against Rechargekit Fintech. The plea was rejected on the grounds that no resolution ratifying the action had been passed by the company, and no such decision of the Board of Directors had been placed on record in that case.

However, this decision was subsequently challenged by Culver Max before the appellate tribunal NCLAT.

IBC provisions cited in defence

The company also contended that NCLT ought to have granted Culver Max time and an opportunity to file a fresh Board Resolution or authorisation, as provided under Section 9(5)(ii) of the Insolvency & Bankruptcy Code, instead of dismissing the application on grounds of maintainability.

NCLAT also agreed to the argument and said, “it was the duty of the NCLT to at least put the appellant on notice, requiring him to rectify the defect in the application and admittedly the said opportunity was not given in the present case.”

“Hence the impugned order suffers from illegality and needs to be set aside,” said NCLAT in its four-page-order.

However, the law also provides that before rejecting such an application, the tribunal should issue a notice to the applicant, giving them up to seven days to fix or correct the defects in the filing.

Under Section 9(5)(ii) of IBC, the NCLT has the power to reject an insolvency application if it is found to be incomplete and the body must communicate such a decision to both operational creditor and the corporate debtor.

However, the law also has a provision that before rejecting such an application, the tribunal should issue a notice to the applicant, giving them up to seven days from the date of receipt to fix or correct the defects in the filing, the news report by PTI said.