The National Company Law Appellate Tribunal (NCLAT) dismissed an appeal filed by Affle 3i Ltd challenging the initiation of Corporate Insolvency Resolution Process (CIRP) against Talent Unlimited Online Services Pvt Ltd.
Key Takeaways from the Ruling:
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NCLT Order Upheld: The two-member NCLAT bench—comprising Officiating Chairperson Justice Yogesh Khanna and Technical Member Barun Mitra—found no grounds to interfere with the NCLT’s June 12, 2026, order admitting the Section 7 insolvency application filed by Axis Trustee Services Ltd.
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Debt and Default Established: The appellate tribunal noted that financial debt and subsequent default were clearly proven, making the admission of the insolvency plea valid under the Insolvency and Bankruptcy Code (IBC).
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Fraudulent Intent Claims: Affle 3i (which holds Compulsory Convertible Preference Shares in Talent Unlimited) had argued under Section 65 of the IBC that the CIRP was initiated fraudulently to circumvent an arbitral award. However, the NCLAT ruled that such allegations must first be raised and thoroughly examined before the NCLT rather than being introduced for the first time at the appellate level.
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Liberty Granted: While dismissing the current appeal, the NCLAT granted Affle 3i the freedom to file a fresh, dedicated application under Section 65 directly before the NCLT to contest the alleged fraudulent initiation of the proceedings.
Consequently, the insolvency proceedings against Talent Unlimited Online Services will continue as the legal battles regarding the allegations shift back to the NCLT.
