Court Finds No Substantial Question of Law Warranting Interference With NCLAT Order
New Delhi : The Supreme Court has dismissed an appeal filed by DBS Bank Ltd challenging an order of the National Company Law Appellate Tribunal (NCLAT) in the insolvency proceedings involving Jyoti Structures Ltd.
A Bench comprising Justice Dipankar Datta and Justice Sheel Nagu condoned the delay in filing the appeal but concluded that there was no substantial question of law requiring the Supreme Court to interfere with the NCLAT’s judgment dated July 8, 2026, as subsequently corrected by an order dated August 25, 2026.
The dismissal leaves the NCLAT decision in place.
Dispute Originated From Insolvency Proceedings
The dispute arises from the insolvency resolution of Jyoti Structures and subsequent disagreements between the company and DBS Bank, a dissenting financial creditor.
According to the NCLAT’s July 8 order, Jyoti Structures had undergone an insolvency resolution process and was subsequently taken over by a new management after approval of a resolution plan. The resolution plan was approved in March 2019, while its implementation effectively commenced on November 9, 2021, when the new management took over the corporate debtor.
DBS Bank was a dissenting financial creditor under the approved resolution plan.
The NCLAT record states that Jyoti Structures claimed DBS was entitled to payments under the approved resolution plan and that payments had been made in four instalments on November 10, 2021, July 15, 2023, September 11, 2024 and June 17, 2025, through pay orders or demand drafts.
DBS Bank Sought Liquidation
The dispute escalated after DBS Bank filed an application seeking initiation of liquidation proceedings against Jyoti Structures.
The application, filed on November 3, 2025, alleged several breaches in the implementation of the approved resolution plan.
As recorded by the NCLAT, the allegations included:
- Alleged unilateral substitution of the proposed investors identified in the approved resolution plan.
- Alleged failure to pay CIRP costs within the stipulated period.
- Alleged delay in infusion of equity of ₹170 crore by the proposed investors.
- Alleged delays in payments to dissenting financial creditors.
- Alleged selective One-Time Settlement arrangements with certain lenders outside the terms of the approved resolution plan.
These were allegations made in the proceedings and were not, by themselves, findings of criminal or regulatory wrongdoing.
Jyoti Structures Challenged the Liquidation Application
In response, the new management of Jyoti Structures filed an application under Section 65 of the Insolvency and Bankruptcy Code, 2016, alleging that the liquidation application had been initiated fraudulently and with malicious intent.
The Mumbai Bench of the National Company Law Tribunal (NCLT), however, dismissed that application on June 11, 2026.
The NCLT held, among other things, that questions concerning whether DBS Bank had received its complete entitlement under the resolution plan required examination on the merits and could not be conclusively determined at that stage. DBS had disputed the validity of the payments, including issues relating to the timing of the payments and the status of certain demand drafts.
NCLAT Reversed the NCLT Approach
Jyoti Structures then challenged the NCLT order before the NCLAT in Company Appeal (AT) (Insolvency) No. 1188 of 2026.
In its July 8, 2026 judgment, the NCLAT allowed the appeal and set aside the impugned order.
The appellate tribunal observed that the questions concerning the alleged fraudulent or malicious initiation of the liquidation proceedings had to be considered before proceeding with the underlying liquidation application.
The NCLAT also distinguished between the expressions “fraudulently” and “maliciously”, noting that the two have different meanings and areas of application under the statutory framework.
The tribunal ultimately remanded the matter to the Adjudicating Authority with a direction that the application challenging the maintainability of the liquidation proceedings be heard before the liquidation application itself.
DBS Bank Approached the Supreme Court
DBS Bank subsequently challenged the NCLAT’s decision before the Supreme Court.
The Supreme Court considered the appeal on September 29, 2026. The Bench of Justice Dipankar Datta and Justice Sheel Nagu first condoned the delay in filing the appeal.
After considering the matter, however, the Court found no substantial question of law warranting interference with the NCLAT judgment.
The appeal was consequently dismissed.
The Court also directed that any pending interlocutory applications would stand disposed of.
What the Supreme Court Order Means
The Supreme Court’s dismissal means that the NCLAT order under challenge remains undisturbed.
Importantly, the Supreme Court’s order, as reported, does not amount to a final determination of all underlying disputes between DBS Bank and Jyoti Structures. The NCLAT’s July 8 decision itself primarily concerned the sequence and maintainability of the proceedings arising from the Section 65 application and the liquidation application.
The underlying issues raised by the parties therefore remain subject to proceedings before the appropriate insolvency forum.
Background: Jyoti Structures’ Insolvency Resolution
Jyoti Structures had earlier undergone insolvency proceedings under the Insolvency and Bankruptcy Code. The company’s resolution plan received approval in March 2019, after which litigation and implementation-related issues delayed the process.
The NCLAT record notes that implementation effectively began on November 9, 2021, when the new management took control of the company.
The NCLAT also referred to an earlier order dated August 2, 2023, concerning exclusion of a period from the payment timeline under the resolution plan.
The subsequent dispute centred on whether the payments made to DBS Bank complied with the approved resolution plan and whether DBS’s liquidation application could proceed in the circumstances.
Key Case Details
| Particular | Details |
|---|---|
| Supreme Court decision | September 29, 2026 |
| Parties | DBS Bank Ltd vs Jyoti Structures Ltd |
| NCLAT case | Company Appeal (AT) (Insolvency) No. 1188 of 2026 |
| NCLAT judgment | July 8, 2026 |
| NCLAT correction | August 25, 2026 |
| NCLT order challenged before NCLAT | June 11, 2026 |
| Key legislation | Insolvency and Bankruptcy Code, 2016 |
| Relevant provision | Section 65 |
| Supreme Court Bench | Justice Dipankar Datta and Justice Sheel Nagu |
| Outcome | DBS Bank’s appeal dismissed |
| Court’s key finding | No substantial question of law warranting interference with the NCLAT order |
| Pending IAs | Disposed of |
The Supreme Court’s decision marks the latest development in the continuing insolvency-related dispute between DBS Bank and Jyoti Structures, while the proceedings arising from the NCLAT’s directions remain relevant before the insolvency adjudicating authority.
