2026 Supreme(Online)(NCLT) 2820

NATIONAL COMPANY LAW TRIBUNAL
Nilesh Sharma, J, Charanjeet Singh Gulati, T
Solvenza Advisory LLP – Appellant
Versus
The State Of Maharashtra (EOW) – Respondent
IA/35/2026 | C.P. (IB)/4216(MB)2018 | I.A. No.35/MB/C-V/2026 | C.P. NO. 4216(IB)/MB/2018

Prior approval under Section 33(5) of the IBC is necessary for a liquidator to institute proceedings on behalf of the corporate debtor, and NCLT cannot adjudicate MPID Act attachment issues which lie before the Designated Court.

Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Sections 33(5), 60(5) - Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 - Section 4 - SARFAESI Act, 2002 - Section 13(2) - Liquidation Regulations - Prior approval of Adjudicating Authority under Section 33(5) proviso for instituting proceedings - Jurisdiction of NCLT under Section 60(5) - Overriding effect of IBC under Section 238 - Priority of secured creditors under Section 53 - Attachment under MPID Act.

(B) Prior approval under Section 33(5) proviso - Scope and requirement - The proviso acts as a gatekeeping mechanism requiring leave before the liquidator commences litigation beneficial to the liquidation estate - The party against whom proceedings are to be instituted is not necessarily to be given notice of hearing - Reliance on Slimline Realty Private Limited Vs. Mr. Jigar Bhatt. (Para 31)

(C) Jurisdiction - NCLT vs. MPID Court - NCLT cannot adjudicate upon actions taken under the MPID Act, challenges to attachment orders lie exclusively before the Designated Court under the MPID Act - Reliance on State of Maharashtra v. Anil Kohil, 2020 SCC OnLine Bom 2674. (Para 11)

Facts of the case:
The Liquidator of Loyal Auto Globe Private Limited filed this application under Section 60(5) read with Section 33(5) of the IBC seeking approval to institute proceedings before the Sessions Court, Mumbai for release of attachment placed on the Corporate Debtor's scheduled properties under the MPID Act via Notification dated 01.02.2012. The properties were owned by the Corporate Debtor but attached by MPID authorities despite the notification being directed against directors of a different entity. The Central Bank of India held a prior mortgage over the properties. The order dated 27.01.2020 directing release of attachment was challenged before the Bombay High Court and stayed. The Bombay High Court in Criminal Appeal No.1142/2025 set aside the MPID Court order permitting auction and left it open to raise all contentions before the competent court.

Findings of Court:
The Tribunal noted that the order dated 27.01.2020 is under challenge before the High Court and could not be given effect to. The High Court had left it open for parties to approach the Competent Court to raise contentions including that the Corporate Debtor is under liquidation subject to IBC. Therefore, the Tribunal found that the issue of release of MPID attachment requires agitation before the competent court, and the liquidator needs prior approval under Section 33(5) proviso to institute such proceedings.

Issues: Whether the Liquidator can be granted prior approval under Section 33(5) proviso to institute proceedings before the MPID Court for release of attachment over properties forming part of the liquidation estate.

Ratio Decidendi: The liquidator is entitled to seek prior approval under Section 33(5) proviso to institute proceedings before the competent court for release of attachment over properties forming part of the liquidation estate, especially when the attachment hinders the liquidation process and the orders of the Tribunal are subject to challenge before the High Court. Result : Application allowed and disposed of.