Park Energy Private Limited Vs State Bank of India (NCLAT Chennai)
The National Company Law Appellate Tribunal (NCLAT) in Chennai has dismissed a company appeal filed by Park Energy Private Limited, a shareholder of the Corporate Debtor, Bhadreshwar Vidhyut Private Limited. The appeal challenged an order from the National Company Law Tribunal (NCLT) that admitted a Section 7 application under the Insolvency and Bankruptcy Code (IBC) filed by the financial creditor, State Bank of India, initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor.
The core issue was whether an appeal is maintainable at the behest of a shareholder. The NCLAT initially noted that while a shareholder might be considered an “aggrieved person” under Section 61 of the IBC, a co-ordinate bench in a previous case (Niraj Vadakkedathu Paul) had held that a shareholder does not have the locus to challenge a Section 7 proceeding. To resolve this conflict, a larger three-member bench was constituted to decide on the matter of a shareholder’s locus standi. The larger bench, in its judgment on July 22, 2025, concluded that an appeal is not maintainable at the behest of a shareholder.
Following the larger bench’s decision, the NCLAT bench proceeded to dismiss the appeal. The court noted that the appellant, Park Energy Private Limited, had been absent from the hearings despite being notified. Given the clear precedent set by the larger bench, the NCLAT ruled that the appeal by a shareholder was not maintainable and therefore dismissed it. The judgment effectively reinforces the principle that shareholders, in this context, do not have the independent right to challenge the admission of an insolvency application against the company.
