J U D G M E N T

(Hybrid Mode)

Per: Justice N. Seshasayee, Member (Judicial)

The present appeal arises out of the order dated 19.08.2025 passed by the National Company Law Tribunal, Mumbai Bench in Company Petition (IB) No. 576 (MB) of 2025, whereby the Adjudicating Authority disposed of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 and directed release of the deposited amount to the Respondent without adjudicating the existence of financial debt, default and maintainability of the petition.

Facts

2. The material facts are:

a) the Appellant, M/s. North Life Spaces LLP, entered into a Facility Agreement dated 05.04.2021 with the Respondent. Eventually, the Respondent claimed that about ₹.4.15 crores was due from the appellant and demanded its payment. Alleging that the appellant has defaulted in repaying it, respondent laid C.P. (IB) No. 576/MB/2025 under Section 7 of the IBC, alleging that the appellant has defaulted in repaying a debt of Rs.4,15,19,943, inclusive of principal plus interest and tax penalty, while reserving its claim for default interest.

b) the Appellant contested the petition, questioning, inter alia, its maintainability, the authority of the person instituting the proceedings on behalf of the respondent, and the existence of very debt and default. It also filed an interlocutory application seeking production of documents regarding the same.

c) the Company Petition and the interlocutory application were heard and reserved for orders on 12.08.2025. During the hearing, the Respondent, on instructions, withdrew its claim towards tax penalty of Rs.26.80 lakh.

d) Be that as it may, after the petition was reserved for Orders, on 18.08.2025, the appellant deposited two demand drafts aggregating to Rs.3,49,55,172/- with the Registry towards the principal and interest claimed, after deduction of applicable TDS with a praecipe where in the appellant has stated that the amount was deposited without prejudice to the appellant’s rights, remedies and contentions.

e) By the impugned order dated 19.08.2025, the Adjudicating Authority however, directed release of the demand drafts to the respondent, recorded payment of the principal and interest and withdrawal of the tax penalty and default interest claims, and closed the Company Petition. Liberty was granted to the respondent to pursue such other claims as may be legally maintainable. The interlocutory application was also disposed of.

f) the appellant now challenges the impugned order principally on the ground that its objections to the maintainability, debt and default were not adjudicated before the demand drafts were released and the Company Petition was closed. The appeal was filed on 02.10.2025.

g) thereafter, the respondent issued a Demand Notice dated 19.09.2025 claiming Rs.2,77,72,206/- towards interest, default interest and legal expenses. The Appellant disputes its entitlement to these amounts.

h) the present appeal therefore concerns, inter alia, the effect of the deposit made on 18.08.2025 after the matter had been reserved for orders and closure of the Company Petition without adjudication of the Appellant’s objections, and the subsequent claim raised by the Respondent pursuant to the Demand Notice dated 19.09.2025.

Arguments

3. The learned Counsel for the Appellant argued:

a) the appellant had specifically disputed the maintainability of the company petition filed under Sec. 7 IBC and the authority of the person instituting it on behalf of the Trust, and the existence of debt and default. These objections were supported by an interlocutory application seeking relevant documents and were never adjudicated.

b) the Company Petition was heard and reserved for orders on 12.08.2025. Thereafter, on 18.08.2025, the Appellant deposited Rs.3,49,55,172/- through two demand drafts, after applicable TDS, expressly without prejudice to its rights, remedies and contentions. The deposit was not an admission of debt or default, and nor thro