Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 06 JANUARY 2025

Analysing NCLAT's Ruling On Sub-Classification Of Operational Creditors

Dhir & Dhir Associates
Dhir & Dhir Associates
Contributor
Dhir & Dhir Associates

Dhir & Dhir Associates

Dhir & Dhir Associates is a full-service law firm founded in 1993 to serve as a singlewindow...

View firm profile
Explore more from Dhir & Dhir Associates

The recent judgment by the National Company Law Appellate Tribunal (NCLAT) in NCC Ltd. v. Golden Jubilee Hotels Pvt. Ltd. sheds light on the treatment...

IndiaInsolvency/Bankruptcy/Re-Structuring
Naveli Reshamwalla
Naveli Reshamwalla
Princi Jaiswal
Princi Jaiswal
Author LinkedIn connections

The recent judgment by the National Company Law Appellate Tribunal (NCLAT) in NCC Ltd. v. Golden Jubilee Hotels Pvt. Ltd.1 sheds light on the treatment of operational creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). This ruling emphasizes the evolving judicial perspective regarding the categorization and sub-classification of operational creditors, highlighting the need for flexibility based on objective considerations.

This judgment seeks to establish a significant precedent regarding the sub-classification of operational creditors within IBC proceedings. It affirms that such classifications are permissible when grounded in operational necessity and commercial wisdom and aimed at maximizing value for the corporate debtor. The judgment emphasizes pragmatism and commercial realities in resolving insolvency cases, balancing statutory rights with practical needs during resolution processes.

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

The Insolvency And Bankruptcy Code (Amendment) Act, 2026

India's Insolvency and Bankruptcy Code undergoes significant reform through the 2026 Amendment Act, introducing stricter timelines, enhanced creditor oversight, and frameworks for group and cross-border insolvency. The amendments address persistent challenges in resolution efficiency, withdrawal restrictions, and fraudulent transaction scrutiny while aligning with international best practices to strengthen investor confidence.
IndiaInsolvency/Bankruptcy/Re-Structuring
Mansukhlal Hiralal & Company
Mansukhlal Hiralal & Company
Article

The IBC Amendment Act, 2026: Reshaping Real Estate Insolvency

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 (‘Amendment Act’), which amends the Insolvency and Bankruptcy Code, 2016 (‘Code’), received Presidential assent on April 6, 2026. Most amendments took effect on May 26, 2026. However, three significant mechanisms the accelerated admission deadline, creditor-initiated resolution, and group insolvency have been enacted but have not yet come into force and will take effect only upon the issuance of a commencement notification by the Central Government under the applicable provisions of the Code.
IndiaInsolvency/Bankruptcy/Re-Structuring
Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co
Article

IBC Update - Removal Of Interim Moratorium For Personal Guarantors Apples To Pending Proceedings

The Bombay High Court recently addressed a critical question regarding the temporal application of Section 96(4) of the Insolvency and Bankruptcy Code, which removed the interim moratorium protection for personal guarantors of corporate debtors. The ruling clarifies whether this amendment applies only to fresh applications filed after its enactment or extends to insolvency proceedings that were already pending when the law changed. This decision has significant implications for creditors seeking to pursue p
IndiaInsolvency/Bankruptcy/Re-Structuring
Mansukhlal Hiralal & Company
Mansukhlal Hiralal & Company
Article

The End Of The “Settlement Exit”? — The Stricter Section 12A Regime Post-2026 Amendment

For nearly eight years, the Insolvency and Bankruptcy Code, 2016 (IBC) carried within it a quiet contradiction. On the one hand, it was designed to be a serious, time-bound, collective resolution mechanism and a creditor-driven process. On the other hand, it contained Section 12A, a provision that became one of the most strategically exploited exits in Indian commercial law.
IndiaInsolvency/Bankruptcy/Re-Structuring
Foresight Law Offices
Foresight Law Offices
Article

IBBI And Courts Settle The Issue Of Applicability Of Interim Moratorium For A Personal Guarantor Of A Corporate Debtor

The Insolvency and Bankruptcy Code (Amendment) Act, 2026 introduced sub-section (4) into Section 96 of the Insolvency and Bankruptcy Code, 2016 (IBC), excluding personal guarantors to corporate debtors from the protection of the interim moratorium that automatically arises on the filing of an application to initiate insolvency resolution proceedings under Section 94 or Section 95. The amendment, which came into force on 26 May 2026, does not contain any express statement as to whether it applies to pending applications or applications filed after the introduction of Section 96(4).
IndiaInsolvency/Bankruptcy/Re-Structuring
Khaitan & Co.
Khaitan & Co.
Article

The Evolution Of Workplace Sexual Harassment Law In India: From Vishaka To POSH

This article covers the evolution of laws in India on sexual harassment in the workplace, starting from the shortcomings of the pre-1997 law and leading to the introduction of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (“POSH Act”). It examines the impact of the Indian Penal Code, 1860; the lack of any specific remedy for sexual harassment at the workplace; the Bhanwari Devi incident; and, thereafter, the judgment in Vishaka v. State of Rajasthan on the constitutional and judicial recognition of sexual harassment at the workplace as a violation of fundamental rights.
IndiaEmployment and HR
Dhir & Dhir Associates
Dhir & Dhir Associates
Article

SEBI’s Proposed SME IPO Reforms: Key Changes For Issuers, Merchant Bankers And IPO Due Diligence

The growth of India’s small and medium enterprise (“SME”) IPO market has brought new opportunities for businesses to access public capital, but has also raised questions about issuer quality, investor protection and the costs of listing. As the segment expands, the challenge is to facilitate genuine fundraising without compromising market integrity.
IndiaCorporate/Commercial Law
Dhir & Dhir Associates
Dhir & Dhir Associates
Article

INSOLVENCY MEETS ARBITRATION Convergence, Conflict, And Co-Existence In Asia

Insolvency and arbitration have traditionally occupied separate spaces: one collective and court-supervised, the other private and consent-based. That separation is breaking down. Across Asia, distressed companies are parties to ongoing arbitral proceedings, arbitral awards are being pursued against insolvent entities, and restructuring moratoria are colliding with arbitral proceedings in ways that neither the law of insolvency nor the law of arbitration has cleanly resolved.
IndiaInsolvency/Bankruptcy/Re-Structuring
Dhir & Dhir Associates
Dhir & Dhir Associates