Ex-Post Facto Approval for Criminal Complaints by Liquidator Against Ex-Management Upheld: NCLAT
- REEDLAW
- Sep 5
- 3 min read
REEDLAW Legal News Network reports: In a pivotal ruling, the National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, upheld that an Adjudicating Authority can grant ex-post facto approval for criminal complaints filed by a liquidator against ex-management, provided such actions are linked to previously authorized proceedings and aim to safeguard the corporate debtor’s assets, even if approval is obtained after the filing.
The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), while adjudicating a Company Appeal, held that an Adjudicating Authority is empowered to accord ex-post facto approval for criminal complaints initiated by a liquidator against the former management when these actions are connected to earlier approved proceedings and are essential to protect the assets of the corporate debtor, even when the approval is sought post-filing.
The National Company Law Appellate Tribunal heard an appeal challenging the order of the Adjudicating Authority, which had allowed the Liquidator's application seeking ex-post facto approval for criminal complaints filed against the ex-management. The appellant contended that the order lacked reasons or special circumstances justifying such approval and highlighted that the complaint was lodged after a delay of ten months from the discovery of the alleged withdrawal of funds.
The Liquidator argued that he was pursuing recovery of ₹12 crore VAT refund mentioned in the Information Memorandum and was earlier permitted by the NCLT in April 2022 to pursue all listed litigations and consequential civil or criminal proceedings. He submitted that the criminal complaints were filed promptly after discovering alleged impersonation and misappropriation during the course of VAT refund proceedings.
The Tribunal noted that in an earlier order dated 28 April 2022, the Adjudicating Authority had granted the Liquidator liberty to pursue all consequential proceedings, both civil and criminal. It referred to paragraph 11 of the impugned order, which recorded that the criminal complaints arose from impersonation by the ex-management related to VAT refund and that the application for approval was filed immediately after the complaints. The NCLAT held that the reasons provided were sufficient and that the Adjudicating Authority was justified in granting ex-post facto approval. Accordingly, the appeal was dismissed.
Ms. Ishita Jain and Mr. Mudassir, Advocates, represented the appellant.
Mr. Abhinav Mishra, Ms. Jagriti Dosi, Ms. Archisha Singh, Mr. Priyanshu Singh, Mr. Hardik Dimania, Mr. Kratiney Goel and Ms. Damani Juneja, Advocates, appeared for the Respondent.
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