Mumbai NCLT shields liquidator Amit Gupta from coercive action, directing cooperation with ongoing investigations.
In a significant ruling, the National Company Law Tribunal (NCLT), Mumbai Bench, provided interim relief to insolvency professional Amit Gupta, who faced allegations of undervaluing assets during the liquidation of Provogue (India) Ltd. The tribunal, led by Ms. Lakshmi Gurung, Member (Judicial), and Sh. Hariharan Neelakanta Iyer, Member (Technical), directed that no coercive steps, including arrest, be taken against Gupta until further orders.
The legal proceedings stemmed from a complaint filed by Nikhil Chaturvedi, the former Managing Director of Provogue, leading to an FIR registered by the Economic Offence Wing (EOW) of the Mumbai Police. The complaint alleged that substantial export receivables were not recovered, and the valuation of a Provogue subsidiary was suppressed, enabling undervaluation of assets during liquidation. These allegations were claimed to be part of a conspiracy involving Gupta and other individuals linked to Provogue.
Counsel for the applicant argued that the actions undertaken were in good faith, as part of Gupta's statutory duties as a liquidator, and that under Section 233 of the Insolvency and Bankruptcy Code (IBC), 2016, such actions should be immune from legal proceedings. Additionally, they pointed out that the Insolvency and Bankruptcy Board of India (IBBI) had not initiated any criminal proceedings against Gupta, despite similar allegations being addressed in a previous disciplinary order.
The NCLT observed that the IBBI had indeed cancelled Gupta's registration as an insolvency professional in 2024, yet no replacement liquidator had been appointed. In its order, the tribunal noted that the issues raised in the EOW complaint were similar to those already considered by the IBBI, which had not pursued criminal charges.
The tribunal's decision emphasized that offences under the IBC must be tried by Special Courts established under the Companies Act, 2013, and only upon complaints by the IBBI, the Central Government, or authorized individuals. Consequently, the tribunal granted interim protection to Gupta, preventing arrest while mandating his cooperation with investigating agencies and attendance at Sessions Court proceedings.
The NCLT's ruling underscores the protective measures afforded to insolvency professionals under the IBC, provided their actions are in good faith, and highlights the procedural requirements for pursuing legal action against such professionals. The tribunal scheduled the matter for further hearing on January 16, 2026.
Bottom Line:
Protection under the Insolvency and Bankruptcy Code, 2016 - Insolvency Professional or Liquidator performing statutory functions under the Code in good faith is shielded from suits, prosecutions, or other legal proceedings. Cognizance of offences under the IBC can only be taken by Special Courts established under the Companies Act, 2013 based on complaints filed by the Insolvency and Bankruptcy Board of India (IBBI) or the Central Government.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 233, 236; Companies Act, 2013.
Andhra Bank v. Provogue (India) Ltd., (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2828979
