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NCLT Indore Dismisses Colama Commercial's Intervention Plea, Says IBC Bars Third Party at
The (NCLT) has firmly rejected an filed by , holding that the does not permit third parties to intervene in Section 7 proceedings at the . The Bench, comprising Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta, delivered the order on .
The Dispute: A Race to the Creditors' Committee
Colama Commercial, a registered non-banking financial company, had filed its own insolvency petition under against in . When another , , filed a separate Section 7 petition in , Colama sought to intervene, fearing that subsequent charges created by Satiate Agri in favour of Excellence Finance and would dilute its voting share in the prospective .
Colama argued that a in its loan agreement prohibited Satiate Agri from creating further security interests without its consent. It also contended that its earlier petition should be given priority over the one filed by Excellence Finance.
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Satiate Agri opposed the , asserting that Colama had no to intervene merely because the outcome of the proceedings could affect it. The further alleged that Colama's loan transaction of ₹4.10 crore was collusive and backdated, and that issues relating to and priority belonged to Colama's own pending petition.
Excellence Finance submitted that its Section 7 petition was confined to establishing the existence of a , and that the alleged breach of Colama's loan covenants was irrelevant. It relied on the judgment in , which held that at the , only the and are .
Court's Reasoning: No Room for Third-Party Interference
The Bench applied the 's principle squarely, observing that Colama had already availed its independent remedy by filing its own Section 7 petition and could not use another creditor's proceedings to ventilate its grievances. The Tribunal stated:
"The Applicant has already availed its independent remedy by filing CP (IB) No.78/MP/2025, and the pendency of the said proceeding does not confer upon it a right to intervene in the present petition."
On the issue of priority, the court clarified that the IBC does not recognize any priority merely because an earlier petition has been filed. It held:
"As regards the prayer seeking priority in the admission or adjudication of the Applicant's own Section 7 Petition, we find that the Code does not provide for any such priority merely on the ground that an earlier petition has been filed by another
."
The Bench also rejected Colama's request for restraining the from creating further charges, noting that such reliefs could not be granted by invoking in pre-admission proceedings. Instead, the Tribunal directed that upon commencement of the , Colama could submit its claims to the .
Decision and Implications
The NCLT dismissed the as not maintainable, with no order as to costs. The ruling reinforces the limited scope of pre-admission adjudication under Section 7, emphasizing that third-party financial creditors cannot use intervention as a backdoor to advance their own claims or secure priority. The decision also underscores that disputes over and loan covenants must be resolved in the creditor's own proceedings, not through another creditor's petition.
