NCLAT Sets Aside NCLT Order; Culver Max Insolvency Petition to Be Reheard

The National Company Law Appellate Tribunal (NCLAT) has overturned a prior order of the National Company Law Tribunal (NCLT) that dismissed an insolvency petition filed by Culver Max Entertainment against Odisha-based fintech firm Rechargekit Fintech, directing that the case be reheard afresh.

The dispute traces back to April 2024, when NCLT declined to admit Culver Max’s petition under Section 9 of the Insolvency and Bankruptcy Code (IBC) on the ground that the broadcaster had not filed a valid board resolution or clear authorisation supporting the application.

Culver Max contested that NCLT should have provided an opportunity to rectify these procedural deficiencies instead of dismissing the petition outright on maintainability grounds. The NCLAT agreed, holding that procedural flaws alone should not block the initiation of insolvency proceedings and that the broadcaster must be allowed to cure any defects before the petition is rejected.

A two-member bench comprising Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) ruled that the earlier order was legally unsound on this narrow procedural point, without passing judgment on the merits of the insolvency claim itself. The tribunal has remitted the matter to the Cuttack bench of the NCLT to rehear the petition once the defects are addressed, preferably within a stipulated timeframe set by NCLAT. The appellate decision is seen as a reaffirmation of procedural fairness under the IBC, ensuring operational creditors are given a chance to correct formal defects before an application is dismissed.