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2026 Supreme(Online)(NCLAT) 28

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Mohd. Faiz Alam Khan, Member (Judicial)
BSE Limited – Appellant
Versus
Avil Menezes – Respondent
Company Appeal (AT) (Ins) No. 1786 of 2025|Company Appeal (AT) (Ins) No. 1862 of 2024

Advocates:
For the Appellants/Petitioners: Mr. Abhishek Puri, Mr. Surbhi Gupta, Mr. Sahil Grewal, Mr. Manish Chhangani, Mr. Abhay Chauhan
For the Respondents: Mr. Neeraj Malhotra, Mr. Abhishek Baid, Mr. Mohit Kumar Bagna, Mr. Praneet Das, Mr. Ravinder Kumar, Mr. Nimish Kumar, Mr. Anand Sengar, Mr. Ajit Shah, Mr. J. Rajesh, Mr. Dhrupad Vaghani, Mr. Md. Arsalan Ahmed, Mr. Yashwardhan Aggarwal, Mr. Amit Agrawal, Mr. Naveen Wegde, Mr. Sarthak Wadhwa, Ms. Lakshmi Nair, Mr. Nayak Samuel

NCLT has jurisdiction under IBC Section 60(5)(c) to defreeze demat accounts holding corporate debtor's undisputed shares, frozen for crystallized listing fee dues, as issue relates to insolvency proceedings and RP/liquidator asset custody duties prevail via Section 238.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 14, 17, 18, 25, 35, 36, 60(5), 238 - Securities Contracts (Regulation) Act, 1956 - Sections 9(2), 21 - SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 - Regulations 14, 98 - SEBI Act, 1992 - Section 28A - Debit freeze on demat accounts of corporate debtors (promoters of listed entities) for non-payment of annual listing fees by listed entities - NCLT has jurisdiction under Section 60(5)(c) to direct defreezing where shares are undisputed property of corporate debtor, dues crystallized, and issue arises in relation to insolvency/liquidation proceedings - Securities law framework regulates listing compliance but crystallized dues treated as operational debt under IBC; Section 238 overrides inconsistent provisions - RP/liquidator duty-bound to take custody/control of assets including shares for preservation/sale; no need to approach securities forums when no ongoing regulatory determination pending. (Paras 71-79)

(B) Jurisdiction - NCLT residuary power under Section 60(5)(c) - Applicable to questions of law/fact 'arising out of or in relation to' insolvency/liquidation; nexus with insolvency must exist - Distinguished from pure regulatory disputes under public law where dues not crystallized; post-crystallization, recovery falls under IBC regime. (Paras 71, 74-75)

Facts of the case:
Two appeals by stock exchange against NCLT orders directing defreezing of demat accounts of corporate debtors in CIRP/liquidation - Accounts frozen pre-CIRP for non-payment of annual listing fees by listed entities where corporate debtors were promoters - Shares owned by corporate debtors undisputed; RP/liquidator sought custody/control for insolvency processes.

Findings of Court:
NCLT jurisdiction upheld; defreezing directions valid as shares form part of liquidation estate, dues crystallized as operational debt; securities framework not contravened where no ongoing compliance/regulatory issue.

Issues: Whether NCLT has jurisdiction under Section 60(5) to defreeze demat accounts frozen under securities regulations for non-payment of listing fees; interplay of IBC overriding effect (Section 238) with securities law framework.

Ratio Decidendi: Where demat freeze stems from crystallized dues (operational debt) and impedes RP/liquidator duties to access undisputed assets for insolvency/liquidation, NCLT exercises jurisdiction under Section 60(5)(c) read with Section 238; securities actions for compliance do not bar IBC asset custody when no active regulatory adjudication pending.

Result: Appeals dismissed.

Table of Content
1. facts of future corporate resources cirp and demat freeze (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11)
2. facts of liz traders liquidation and demat freeze (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
3. appellant's arguments on nclt jurisdiction limits (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29)
4. irp arguments on moratorium and sebi circular (Para 30)
5. securities law framework for listing fees and freezes (Para 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38 , 39)
6. irp/rp/liquidator duties under ibc (Para 40 , 41 , 42)
7. supreme court precedents on nclt jurisdiction (Para 43 , 44 , 45 , 46 , 47 , 48 , 49 , 50)
8. nclat precedents on attachments and overrides (Para 51 , 52 , 53 , 54 , 55 , 56 , 57 , 58 , 59 , 60 , 61 , 62 , 63 , 64 , 65 , 66 , 67 , 68)
9. nclt jurisdiction under section 60(5) affirmed (Para 69 , 70 , 71 , 72 , 73 , 74 , 75 , 76 , 77 , 78 , 79 , 80)
10. appeals dismissed, no interference (Para 81 , 82 , 83)

JUDGMENT

(Hybrid Mode)

[Per: Justice Mohd. Faiz Alam Khan, Member (Judicial)]

A common issue is involved in the aforesaid appeals and therefore for the sake of convenience both above appeals are being disposed of by passing this common order.

Factual Matrix pertaining to CA (AT) (Ins) No. 1786 of 2025

2. CA (AT) (Ins) No. 1786 of 2025 has been filed by the appellant-BSE Ltd. Challenging the impugned order dated 31.10.2025 passed by the Ld. National Company Law Tribunal, Mumbai (Adjudicating Authority) in IA No. 2590 of 2025 in CP (IB) No. 1113(MB) of 2022 whereby the appellant has been directed to vacate the debit freeze with immediate effect and issue necessary communication to the Respondent No. 2 within 15 days from the passing of the order.

3. Brief facts necessary for the disposal of the instant appeal are that Corporate Debtor (CD) is an Investment Company /Holding Company of the future group facilitating the funding of group companies through various investments and landing of loans and advances and also providing services to scale up/support the retail business of the group.

4. The CIRP of the CD was initiated vide order dated 24.09.2024 passed by the Ld. Adjudicating Authority in CP (IB) No. 1113 of 2022 and the Respondent No.1 was appointed as the Interim Resolution Professional (IRP) of the CD and Management of the affairs of the CD vested in him.

5. It is further reflected from the record that after verifying the claims of the creditors the Committed of Creditors (CoC) was constituted and thereafter it was known that the CD holds a Demat account with appellant to hold shares and securities in Dematerialized form.

6. It is further reflected that in order to take control of the assets of the CD, Respondent no. 1 enquired from Respondent No. 4 pertaining to the status of the securities held by the CD and it was informed by Respondent No. 4 that a debit freeze is imposed on this Demat account.

7. It is further reflected that on request, Respondent No. 4 enquired with Respondent No. 2 vide email dated 21.02.2025, for the reasons of such debit freeze and the steps required to defreeze the same. Respondent no. 2 informed vide email dated 24.02.2025 that the debit freeze on this Demat account was initiated on the instructions received from appellant and asked Respondent No. 4 to provide with confirmation from the appellant for lifting of such freeze.

8. It is further reflected that the Respondent No. 1/IRP addressed a letter to the appellant on 25.02.2025 and Respondent No. 2 as well as to Respondent No. 4 regarding the initiation of the CIRP of the CD and requested to remove the debit freeze on this Demat account with a further request to provide the copy of the order by which the Demat account was frozen.

9. It is also reflected that appellant vide email dated 27.02.2025 responded to the Respondent No. 1 stating that the debit freeze on the Demat account was pursuant to the default committed by Future Retail Ltd. (FRL) in paying the annual listing fee to Respondent No. 2 as per the listing a

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2026 Supreme(Online)(NCLAT) 28

NATIONAL COMPANY LAW APPELLATE TRIBUNALMohd. Faiz Alam Khan, Member (Judicial)BSE Limited – AppellantVersusAvil Menezes – RespondentCompany Appeal (AT) (Ins) No. 1786 of 2025|Company Appeal (AT) (Ins) No. 1862 of 2024

NCLT has jurisdiction under IBC Section 60(5)(c) to defreeze demat accounts holding corporate debtor's undisputed shares, frozen for crystallized listing fee dues, as issue relates to insolvency proceedings and RP/liquidator asset custody duties prevail via Section 238.

Cases Referred (4)

NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Mohd. Faiz Alam Khan, Member (Judicial)
BSE Limited – Appellant
Versus
Avil Menezes – Respondent
Company Appeal (AT) (Ins) No. 1786 of 2025|Company Appeal (AT) (Ins) No. 1862 of 2024