Case Note & Summary
The matter involved an appeal filed by the Appellant, Pulkit Sharma, challenging an Impugned Order passed under Section 9 of the Insolvency and Bankruptcy Code, 2016, which initiated insolvency proceedings against Daulat Ram Engineering Services Private Limited, the Corporate Debtor. The Appellant contended that the Corporate Debtor was financially solvent, with assets exceeding 400 Crores, an annual turnover of about Rs. 250 Crores, and a net profit of Rs. 20 Crores as of 31.03.2025. The amount of default leading to the insolvency initiation was Rs. 4,53,48,428 (USD 522,170). The Appellant argued that the insolvency process was causing financial distress and damaging their reputation, and expressed willingness to deposit the entire amount in question with the Tribunal. The Respondent's counsel raised concerns about potential misuse of any interim order granted to the Appellant. After considering the submissions, the Tribunal decided to stay the operation of the Impugned Order until the next date of listing, emphasizing the Appellant's commitment to deposit the amount and not seek adjournments. The Tribunal ordered the Appellant to deposit the demand draft by 17.08.2026 and allowed the Respondent to file a reply by the same date, with the appeal scheduled for final hearing on 19.08.2026.
Headnote
A) Insolvency Law - Stay of Impugned Order - Operation of the Impugned Order stayed - Insolvency and Bankruptcy Code, 2016, Section 9 - The Appellant demonstrated readiness to deposit the entire amount in question and assured no adjournment for the final hearing, leading the Tribunal to stay the operation of the Impugned Order until the next listing. Held that the stay was necessary to protect the Appellant's interests (Paras 8-9).
Issue of Consideration
Whether the operation of the Impugned Order initiating insolvency proceedings against the Corporate Debtor should be stayed pending appeal.
Final Decision
The Tribunal stayed the operation of the Impugned Order dated 31.07.2026 until the next date of listing, requiring the Appellant to deposit the amount by 17.08.2026.
Law Points
- Insolvency process
- Interim injunction
- Corporate Debtor
- Financial distress
- Goodwill protection
