Synopsis

The National Company Law Appellate Tribunal restored an appeal from Walchandnagar Industries against Swaraj India Agro. This restoration followed a Supreme Court order canceling a previous dismissal of Walchandnagar's insolvency petition. The NCLAT issued a notice directing Swaraj India to respond within four weeks. The dispute involves operational debts related to a sugar plant project initiated in 2013. The NCLT earlier dismissed both companies' petitions citing pre-existing disputes.

New Delhi: The National Company Law Appellate Tribunal (NCLAT) has restored an appeal by Walchandnagar Industries challenging the dismissal of its insolvency petition against Swaraj India Agro and has issued notice.

The appeal was restored following a July 28 Supreme Court order that set aside the NCLAT's earlier dismissal of Walchandnagar's insolvency appeal and restored it to its original status, subject to payment of Rs 2 lakh.

On May 11, NCLAT had dismissed an appeal filed by Walchandnagar against Swaraj India, refusing to condone a 193-day delay in refiling it. The appellate tribunal held that the company had failed to provide sufficient grounds to justify the delay.

This NCLAT order was challenged by Walchandnagar Industries, a heavy engineering company, before the Supreme Court, which not only set it aside but also restored the its insolvency appeal against Swaraj India to its original status, subject to payment of Rs 2 lakh.

The Supreme Court observed that the NCLAT Registry had notified defects in the appeal on five occasions between July 2025 and January 2026, while the appellant had made attempts to rectify them on corresponding dates between July 2025 and February 2026.

Noting that the defects were communicated on separate occasions rather than all at once, the apex court had said the process of rectifying defects can be dealt with "liberally".

Following this, a three-member Principal Bench of the NCLAT issued notice to Swaraj India on Thursday, directing it to file a reply within 4 weeks, which was accepted by the counsel.

The bench also granted four weeks' time to Walchandnagar to file a rejoinder over it and has directed to list the appeal for further hearing on January 5, 2027.

The NCLAT noted that the Supreme Court had restored the appeal subject to payment of Rs 2 lakh, which has since been paid.

"We have perused the order dated July 28, 2026 passed by the Supreme Court... restoring the present appeal, subject to payment of cost of Rs 2 lakh on the respondent," said the NCLAT bench comprising Officiating Chairperson Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das Mehrotra.

The dispute between the two companies stems from a supply, erection and commissioning agreement dated September 9, 2013, under which Walchandnagar was engaged by Swaraj India to set up a sugar plant and a 22 MW co-generation power plant. The project cost was initially pegged at Rs 109.20 crore and later revised to Rs 107.20 crore.

Disagreements over project completion, payments and the scope of work led both companies to claim operational debts against each other and file insolvency petitions before NCLT.

On May 29, 2025, the NCLT's Mumbai Bench dismissed both petitions filed under Section 9 of the Insolvency and Bankruptcy Code, 2016, citing pre-existing disputes. Swaraj India's petition was also rejected on the ground that it had been filed prematurely.

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