NCLT Dismisses ₹11.73-Crore Insolvency Plea Against Struck-Off Company

The Mumbai Bench of the National Company Law Tribunal (NCLT) has dismissed an insolvency petition filed by Adamji Investments Private Limited against M Cons Media Marketing Private Limited. The petition, which sought initiation of the Corporate Insolvency Resolution Process (CIRP) against M Cons Media Marketing, was rejected on the grounds that the company's name had already been struck off by the Registrar of Companies (RoC).

The NCLT cited the legal position that corporate insolvency proceedings cannot be initiated against a company that has been dissolved. The tribunal noted that the purported service of notice upon the corporate debtor in March 2025 was not valid, as the company had already ceased to exist in law.

The petition, filed under Section 7 of the Insolvency and Bankruptcy Code (IBC), claimed that M Cons Media Marketing had defaulted on a debt of ₹11.73 crore, including ₹2.18 crore in principal and ₹9.55 crore towards contractual interest. Adamji Investments had claimed that it had disbursed over ₹2.33 crore to the respondent company under a Memorandum of Understanding (MoU) in February 2014.

However, during the proceedings, it emerged that the Registrar of Companies had issued Form STK-7 on April 7, 2022, striking off the respondent company from the register of companies. The bench noted that the financial creditor had not taken any steps to seek restoration of the company's name under Sections 248(8) or 252(3) of the Companies Act before approaching the NCLT.

The NCLT's decision is based on the principles of natural justice and the judgment of the Supreme Court in Maruti Suzuki. The tribunal held that effective service upon the corporate debtor had not been made, as the company was no longer a valid entity.

The dismissal of the insolvency plea highlights the importance of verifying the status of a company before initiating insolvency proceedings. It also underscores the need for financial creditors to take timely action to seek restoration of a company's name if it has been struck off.

In recent years, there have been several instances of companies being struck off by the Registrar of Companies for non-compliance with regulatory requirements. This has led to a surge in insolvency petitions being filed against such companies. However, the NCLT's decision in this case suggests that such petitions may not be maintainable if the company has already been dissolved.

The Insolvency and Bankruptcy Code (IBC) is a critical piece of legislation that aims to provide a framework for resolving insolvency and bankruptcy cases in a timely and efficient manner. The code has been amended several times since its enactment in 2016, and its provisions have been subject to interpretation by various courts and tribunals.

The NCLT's decision in this case is significant, as it provides clarity on the issue of whether insolvency proceedings can be initiated against a company that has been struck off. The decision is likely to have implications for financial creditors and companies that are facing insolvency proceedings.

In conclusion, the Mumbai NCLT's dismissal of the insolvency plea against M Cons Media Marketing highlights the importance of verifying the status of a company before initiating insolvency proceedings. The decision also underscores the need for financial creditors to take timely action to seek restoration of a company's name if it has been struck off. The case is a significant development in the insolvency landscape in India and is likely to have implications for companies and financial creditors in the future.

The decision of the NCLT is a reminder that the insolvency process is complex and requires careful consideration of various factors, including the status of the company and the rights of financial creditors. As the insolvency landscape in India continues to evolve, it is likely that we will see more cases like this, where the courts and tribunals are called upon to interpret the provisions of the IBC and provide clarity on critical issues.

The NCLT's decision is also a reflection of the government's efforts to strengthen the insolvency framework in India. The government has taken several steps to improve the efficiency and effectiveness of the insolvency process, including the establishment of the NCLT and the introduction of the IBC. The decision in this case is a significant development in this regard and is likely to have a positive impact on the insolvency landscape in India.

In the context of the Indian economy, the NCLT's decision is significant, as it highlights the importance of a robust insolvency framework in promoting economic growth and stability. A well-functioning insolvency framework is critical for attracting investment, promoting entrepreneurship, and ensuring that companies are held accountable for their debts. The decision in this case is a step in the right direction and is likely to have a positive impact on the Indian economy in the long run.

Overall, the Mumbai NCLT's dismissal of the insolvency plea against M Cons Media Marketing is a significant development in the insolvency landscape in India. The decision provides clarity on the issue of whether insolvency proceedings can be initiated against a company that has been struck off and highlights the importance of verifying the status of a company before initiating insolvency proceedings. The case is a reminder that the insolvency process is complex and requires careful consideration of various factors, including the status of the company and the rights of financial creditors.