Pranav B Prem

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has upheld an order of the NCLT Chandigarh Bench granting ex-post facto approval to criminal complaints filed by a liquidator against the former management. The appellate tribunal clarified that while such approval can be given, it must be supported by adequate reasoning and linked to prior authorizations already granted to the liquidator.

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Background

The appeal was filed by Pankaj Tandon, former director of Isolux Corsan India Engineering & Construction Pvt. Ltd., challenging the NCLT’s order dated 12.12.2024. The order allowed an application filed by the liquidator seeking ratification of criminal complaints against the ex-management for alleged misappropriation of funds. The appellant argued that the NCLT had granted ex-post facto approval without giving sufficient reasons or citing any special circumstances. It was pointed out that although the liquidator discovered the misappropriation in December 2021, the complaint was filed only in September 2022, creating doubts about its legitimacy.

Contentions

On behalf of the appellant, it was contended that the NCLT failed to comply with the principle laid down in Slimline Realty (P) Ltd. v. Jigar Bhatt, 2024 SCC OnLine NCLAT 685, where it was held that tribunals could indeed grant ex-post facto approval, but such approval required cogent reasons. In the present case, no such reasons were given.

Conversely, the liquidator’s counsel argued that the NCLT had already, by its order dated 28.04.2022 in IA No. 405 of 2021, granted blanket permission to pursue all pending and future civil and criminal proceedings listed in Annexure C-2 of the application. Since the complaints stemmed from the same series of transactions relating to a ₹12 crore VAT refund, the filing of the criminal complaints was in line with the earlier authorization.

NCLAT’s Observations

The appellate tribunal carefully reviewed the NCLT’s reasoning. It noted that in its earlier order dated 28.04.2022, the NCLT had expressly authorized the liquidator to pursue all civil and criminal proceedings concerning the corporate debtor, including those connected to recovery of the ₹12 crore VAT refund from the Bihar Commercial Tax Department.

In its impugned order, the NCLT had specifically recorded that while the earlier approval did not explicitly cover the criminal proceedings filed in September 2022, the misappropriation was discovered during interactions with the VAT department. The ex-management was alleged to have impersonated as directors even after cessation of office to wrongfully obtain the refund. These circumstances, the NCLT held, justified granting ex-post facto approval.

The NCLAT highlighted paragraph 11 of the NCLT’s order, where detailed reasons were recorded: the complaints were directly connected to the refund matter previously authorized; the liquidator had acted promptly after discovering the impersonation; and the complaints were filed in September 2022 followed by the approval application immediately thereafter. These facts, the NCLAT held, provided sufficient reasoning. Accordingly, the NCLAT rejected the appellant’s contention that no reasons were given. It emphasized that once the NCLT had already empowered the liquidator to pursue civil and criminal proceedings, granting ex-post facto approval in related matters was legally sustainable.

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Dismissing the appeal, the NCLAT upheld the NCLT’s order, confirming that adjudicating authorities are empowered to grant ex-post facto approval to criminal complaints against former management, provided that adequate reasons are furnished and the complaints flow from authorizations already granted.

Appearance

For Appellant: Ms. Ishita Jain, Mr. Mudassir, Advocates.

For Respondent: Mr. Abhinav Mishra, Ms. Jagriti Dosi, Ms. Archisha Singh, Mr. Priyanshu Singh, Mr. Hardik Dimania, Mr. Kratiney Goel, Ms. Damani Juneja, Advocates.

Cause Title: Pankaj Tandon V. Isolux Corsan India Engineering & Construction Pvt. Ltd. Through its Liquidator CA Rajeev Bansal

Case No: Company Appeal (AT) (Insolvency) No. 201 of 2025

Coram: Justice Ashok Bhushan, Mr. Barun Mitra (Technical Member)