Vinodh Prasad
Monday, 9 February 2026
In a landmark decision, the National Company Law Appellate Tribunal (NCLAT) has affirmed the dismissal of an insolvency application filed by Akshay Kumar against Cue Learn. This ruling, issued on February 6, 2026, could significantly influence the framework for corporate insolvency applications in India, especially those initiated by personal guarantors.
The NCLAT confirmed the National Company Law Tribunal's (NCLT) earlier decision, which rejected Kumar's plea under Section 95 of the Insolvency and Bankruptcy Code (IBC). The application was dismissed due to the absence of a financial debt claim, a necessary condition for initiating insolvency proceedings.
This decision underscores the stringent criteria required for commencing insolvency proceedings against corporate entities. The Bench, composed of Justices Ashok Bhushan and Anant Bijay Singh, highlighted that the adjudicatory process under the IBC begins only after a Resolution Professional (RP) submits a report under Section 99.
Moreover, the ruling clarifies that personal guarantors must demonstrate a direct link to the corporate debtor's financial obligations before the NCLT can assert its jurisdiction. "The Tribunal must ensure all requisite conditions are fulfilled before admitting any insolvency application," Justice Bhushan remarked during the proceedings.
The implications of this ruling are substantial for financial institutions, including banks and non-banking financial companies (NBFCs), aiming to recover debts through insolvency proceedings. Legal practitioners must ensure their applications adhere to the elevated standards set by this ruling to avoid dismissal.
This judgment compels stakeholders to reevaluate their strategies regarding the invocation of insolvency provisions under the IBC. Non-compliance with the NCLAT's stipulations could result in further legal challenges and penalties.
Looking forward, this ruling may affect future cases involving personal guarantors and corporate insolvency. The legal community will closely observe subsequent judgments to grasp the evolving interpretation of the IBC.
What You Need to Know
NCLAT upholds dismissal of insolvency application against Cue Learn due to absence of established financial debt claim under Section 95 of IBC.
Affects financial institutions, personal guarantors, and corporate debtors involved in insolvency proceedings under the Insolvency and Bankruptcy Code.
Clarifies preconditions for initiating insolvency against corporate entities, emphasizing the necessity of a direct financial debt link.
Legal professionals must ensure strict adherence to IBC requirements and demonstrate clear financial debt links when filing insolvency applications.
NCLAT upholds NCLT's rejection of Akshay Kumar's insolvency plea against Cue Learn, reshaping corporate insolvency norms.
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