Case Note & Summary
The appeal was filed by Axis Bank Ltd. against an order dated 08.07.2026 from the National Company Law Tribunal (NCLT), Cuttack, which imposed a cost of Rs. 2 lakhs on the appellant for failing to refund an amount received from the SRA and for not appearing or filing a reply to I.A No. 296 of 2022. The initial resolution plan was approved on 22.01.2019, but the first SRA defaulted on payments, leading to a liquidation order on 09.03.2022, which directed the forfeiture of amounts paid by the SRA. The appellant received Rs. 3,50,89,990 from the SRA, and I.A No. 296 of 2022 was filed to seek a refund of this amount. The NCLT noted the appellant's failure to comply with the refund order and imposed a cost. The appellant's counsel argued that there was no explicit direction to refund the amount, but to avoid controversy, the appellant agreed to deposit the amount with the Liquidator while retaining the right to contest the application. The NCLAT modified the NCLT's order, allowing the appellant to deposit the amount within three weeks, waiving the imposed cost if complied with, and stated that the pending application could be contested without influence from this order. The appeal was disposed of, and related interim applications were closed.
Headnote
A) Company Law - Liquidation Proceedings - Refund of Amounts - National Company Law Tribunal, 2016, Section Not Mentioned - The appellant was directed to refund an amount received from the SRA but contested the requirement, leading to a cost imposition for non-compliance. The NCLAT modified the order allowing the appellant to deposit the amount with the Liquidator while preserving the right to contest the refund application. Held that the cost would be waived upon deposit (Paras 4-5).
Issue of Consideration
Whether the appellant was required to refund the amount received from the SRA and the validity of the cost imposed by NCLT.
Final Decision
The NCLAT modified the NCLT's order, allowing the appellant to deposit the amount with the Liquidator within three weeks, waiving the imposed cost upon compliance, and permitting the appellant to contest the pending application without influence from this order.
Law Points
- Liquidation proceedings
- cost imposition
- refund of amounts
- voluntary deposit
