Pranav B Prem

The National Company Law Tribunal (NCLT), Mumbai Bench, has directed the Bombay Stock Exchange (BSE) and Central Depository Services (India) Limited (CDSL) to lift the debit freeze on the demat account of Future Corporate Resources Pvt. Ltd. (FCRL), a Future Group entity led by Kishore Biyani. The Bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar passed the order while allowing the plea filed by the Interim Resolution Professional (IRP) of FCRL, who contended that the freeze was preventing him from taking control of the company’s assets during the ongoing insolvency resolution process.

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According to the IRP, the debit freeze imposed by BSE and implemented by CDSL was hampering the effective management of the corporate debtor’s assets, which is contrary to the objectives of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). The Bench observed that the freeze was inconsistent with the moratorium declared under Section 14 of the IBC, which bars any action to foreclose, recover, or enforce any security interest against the assets of the corporate debtor. It held that continuing the debit restriction effectively obstructed the IRP’s powers and duties as envisaged under the Code.

In its order, the Tribunal noted that BSE had imposed the restriction following the directions of the Securities and Exchange Board of India (SEBI), which had issued a circular freezing the demat accounts of group companies after Future Retail Ltd. (FRL) defaulted on its annual listing fees. The BSE had consequently instructed CDSL to freeze the demat account of FCRL, citing its affiliation with FRL. However, FCRL was already undergoing insolvency proceedings and was thus protected under the IBC moratorium.

The Tribunal relied on SEBI’s Standard Operating Procedure (SOP) dated February 2021, which provides that when a company is under moratorium pursuant to an order under the IBC, stock exchanges must lift or refrain from imposing restrictions that affect the assets of such companies. Finding merit in the IRP’s plea, the NCLT directed BSE to vacate the debit freeze imposed on FCRL’s demat account “with immediate effect” and issue necessary communication to CDSL within 15 days from the date of the order. It further held that if CDSL does not receive such communication within the prescribed period, it shall independently remove the restriction to ensure compliance with the Tribunal’s directive.

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The order reinforces that once the moratorium under Section 14 of the IBC comes into effect, no regulatory or administrative authority can take measures that interfere with the assets or management of the corporate debtor undergoing insolvency.

Appearance

For the Applicant: Advocate Dhrupad Vaghani along with advocate M.K

For the Respondents: Advocates Suraj Chaudhary, Abhay Chauhan, Ajit Shah Parikshit Pania, Ajit Singh Tawar and Prakhar Tandon.

Casue Title: Avil Menezes Interim Resolution Professional of Future Corporate Resources Private Limited v Central Depository Services (India) Limited And Ors

Case No: IA No. 2590 of 2025 IN C.P.(IB) NO. 1113 (MB) OF 2022

Coram: Judicial Member Sushil Mahadeorao Kochey, Technical Member Prabhat Kumar