Tribunal Holds Jurisdiction Under Section 60(5)(c) Limited to CIRP Participants, Post-Resolution Disputes by Third Parties Not Maintainable
In a significant ruling dated September 7, 2026, the National Company Law Tribunal (NCLT), Ahmedabad Bench, dismissed an interlocutory application filed by Mexmon Buildwell LLP, a subsequent purchaser of property previously owned by a corporate debtor undergoing insolvency resolution. The application sought a declaration extinguishing electricity dues of Rs. 15,33,793/- allegedly relating to the pre-resolution period and a refund of the amount paid under protest, along with interest.
The dispute arose after Mexmon Buildwell LLP acquired Plot No. 66, Sector-4, IIE Pantnagar, from Uttarakhand Power Corporation Limited's erstwhile corporate debtor's property post-approval of a Resolution Plan on August 1, 2022. The applicant was not a party to the Corporate Insolvency Resolution Process (CIRP), neither a creditor nor a resolution applicant. The electricity dues in question related to the period before the Resolution Plan approval but were demanded for settlement in connection with a fresh electricity connection requested in December 2025 - well after the conclusion of CIRP and transfer of property.
The Tribunal, comprising Mr. Shammi Khan (Member Judicial) and Mr. Sanjeev Sharma (Member Technical), emphasized that Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016, confers jurisdiction on the Adjudicating Authority solely over disputes "arising out of or in relation to the insolvency resolution or liquidation proceedings" of the corporate debtor. It does not extend to disputes that arise after the conclusion of CIRP or those involving subsequent purchasers of the corporate debtor's assets.
Rejecting the applicant's claim, the Tribunal noted that the applicant's claim for refund and extinguishment of dues was a fresh dispute unrelated to the CIRP, as the applicant was not involved in the insolvency process. Further, the Sale Deed transferring the property contained contractual provisions addressing liabilities up to the date of transfer and provided for dispute resolution through contractual mechanisms, which cannot be conflated with insolvency jurisdiction.
The Tribunal distinguished precedents cited by the applicant, including the Supreme Court's decision in Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta, which requires a nexus between the dispute and CIRP for Section 60(5)(c) jurisdiction. It clarified that judgments involving Successful Resolution Applicants or claims arising during CIRP do not extend jurisdiction to subsequent purchasers post-resolution.
Ultimately, the NCLT held that the Tribunal lacked jurisdiction under Section 60(5)(c) to entertain the application and dismissed it in limine on maintainability grounds. The applicant's remedy, if any, lies outside the insolvency framework and must be pursued through appropriate civil or contractual forums.
This ruling underscores the "clean slate" principle enshrined in the Insolvency and Bankruptcy Code, confirming that once a Resolution Plan is approved and the property transferred, disputes arising thereafter involving third parties cannot be dragged into insolvency proceedings. It reaffirms the limited scope of Section 60(5)(c) jurisdiction, protecting the finality of insolvency resolutions and the rights of subsequent purchasers.
Bottom Line:
Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 does not confer jurisdiction over disputes arising subsequent to the conclusion of the Corporate Insolvency Resolution Process (CIRP) and transfer of the property to a subsequent purchaser.
Statutory provision(s):
Section 31, Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016
