Latest Indian Case Laws june 2025: Supreme Court and NCLAT Highlights
Table of Contents
Key Legal Principles from Latest Indian Case Laws JUNE 2025
1. Hemang Phophalia Vs The Greater Bombay Co-operative Bank Ltd and Ors
Citation: Hemang Phophalia Vs The Greater Bombay Co-operative Bank Ltd and Ors Company Appeal (AT) (Insolvency) No 765 of 2019 decided 05.09.2019 NCLAT New Delhi MANU/NL/0420/2019 II(2020)BC44 CLA331 156SCL626; Coram: Sudhanshu Jyoti Mukhopadhaya J Chairperson A.I.S. Cheema J Member(J) Kanthi Narahari Member(T)
Ratio: The National Company Law Appellate Tribunal held that an application to start Corporate Insolvency Resolution Process under Sections 7 or 9 of the Insolvency and Bankruptcy Code remains maintainable even against a company whose name has been struck off from the Register of Companies under Section 248 of the Companies Act 2013. When a company’s name is removed from the register it does not mean the company ceases to exist completely for the purpose of paying its debts or realizing amounts owed to it. The liabilities continue and creditors can still pursue their claims. In this case the Greater Bombay Co-operative Bank filed an application under Section 7 claiming the struck-off company Penguine Umbrella Works Private Limited owed them Rs 9.11 crore including interest on a loan. The NCLT admitted the application despite the strike-off. The ex-director appealed saying the company no longer exists so CIRP cannot start. NCLAT rejected this explaining that under Sections 248(6) to (8) and 250 of the Companies Act the company continues for liability payment even after strike-off. The NCLT acting as Tribunal under Section 252(3) can restore the company’s name and position of all persons involved if a creditor applies within 20 years of the Gazette notification. Once CIRP is admitted the company directors and officers are deemed restored to their positions for the insolvency process. The tribunal clarified that while a struck-off company cannot file for voluntary liquidation under Section 59 IBC creditor-driven CIRP under Sections 7/9 remains open to maximize asset value and balance stakeholder interests. Directors’ personal liabilities also continue under Section 248(7). The appeal was dismissed and CIRP allowed to proceed with the Resolution Professional to verify assets and operations.
2. Inox Air Products Limited and Ors Vs The State of Andhra Pradesh
Citation: Inox Air Products Limited and Ors Vs The State of Andhra Pradesh Criminal Appeal No 486 of 2025 arising SLP(Crl) No 2345 of 2024 decided 30.01.2025 MANU/SC/0127/2025 AIR2025SC814 2025 INSC 128; Justices B.R. Gavai Augustine George Masih
Ratio: The Supreme Court held that a Magistrate must apply their mind and record reasons in the order when issuing summons to an accused under Section 204 of the CrPC because summoning someone in a criminal case is a serious matter that cannot be done mechanically or without scrutiny of the complaint and evidence. The court found that the Magistrate’s order in this case merely repeated the complainant’s submissions without any independent analysis or findings, which made it invalid. A Drug Inspector filed a complaint alleging that Inox Air Products Limited and its Managing Director sold Nitrous Oxide I.P. gas to another firm that supposedly lacked a proper license for further sale in violation of Section 18(a)(vi) of the Drugs and Cosmetics Act read with Rule 65(5)(1)(b) of the Drugs Rules punishable under Section 27(d). Both companies actually held valid Form 25 manufacturing licenses, which, under Section 3(f) ‘s definition, cover processes such as repackaging, breaking up, and relabelling for sale or distribution, so no separate Form 20-B wholesaler license was required for manufacturer-to-manufacturer transactions. The Supreme Court quashed the proceedings because, even accepting the complaint allegations at face value, no offence was disclosed since Form 25 authorises such sales between manufacturers. The High Court had wrongly dismissed the quashing petition by ignoring the broad definition of manufacture and presuming a sales license violation that did not exist. The court also noted that no specific role was attributed to the MD, and the Magistrate showed no application of mind in issuing the process.
3. Central Bank of India and Ors. v. Prabha Jain and Ors.
Citation: MANU/SC/0095/2025; 2025 INSC 95; (2025) 4 SCC 38; Decided on: 09.01.2025 (Supreme Court of India, JJ. J.B. Pardiwala & R. Mahadevan).
Ratio: The Supreme Court held that civil courts have jurisdiction under Section 9 of the Code of Civil Procedure to decide disputes about the validity of sale deeds and mortgage deeds that happened before a bank took any action under the SARFAESI Act. The Debts Recovery Tribunal established under Section 17 of SARFAESI cannot decide questions of title or declare documents invalid because its role is limited to checking if the bank’s measures under Section 13(4) of SARFAESI were lawful. Section 34 of SARFAESI only bars civil court jurisdiction for matters that the DRT or DRAT can actually determine.
In this case a woman claimed one-third ownership of family land inherited after her father-in-law’s death. Her brother-in-law allegedly sold part of the land without proper partition to another person who then mortgaged it to Central Bank for a loan. When the borrower defaulted the bank started SARFAESI proceedings to auction the property. The woman filed a civil suit asking the court to declare both the sale deed and mortgage deed illegal and sought possession of her share. The trial court rejected her suit saying civil courts have no jurisdiction under Section 34 SARFAESI but the High Court overturned this decision. The Supreme Court agreed with the High Court because the DRT cannot declare pre-existing sale deeds or mortgages invalid or resolve title disputes between family members and borrowers. Even the prayer for possession survives because DRT can only restore property to borrowers not third-party claimants like the plaintiff. Since at least some reliefs survive a plaint cannot be partially rejected under Order VII Rule 11 CPC. The court advised banks to conduct thorough title searches before giving loans on property to avoid such disputes and protect public money.
4. Acute Daily Media Pvt. Ltd. and Ors. v. Rockman Advertising and Marketing (India) Ltd. and Ors.
Citation: MANU/NL/0040/2025; 254 Comp Cas 682; Company Appeal (AT) (Insolvency) No. 1480 of 2024; Decided on: 16.01.2025 (NCLAT, New Delhi, Ashok Bhushan J. (Chairperson), Barun Mitra & Arun Baroka, Members (T)).
Ratio: The National Company Law Appellate Tribunal held that the Adjudicating Authority can exercise jurisdiction under Section 65 of the Insolvency and Bankruptcy Code to terminate CIRP proceedings if there is prima facie evidence that a Section 7 application was filed fraudulently or maliciously for purposes other than insolvency resolution. This power exists even after CIRP admission when material shows fabricated documents suppression of facts or promoter-creditor collusion abusing the IBC process.Acute Daily Media and family entities claimed Rs 1.20 crore loans (2016-2020) to Sharp Eye Advertising triggering CIRP admission on 17th May 2022. Rockman Advertising (former 62.57% shareholder diluted to 17.86%) filed Section 65 IA alleging sham loans via antedated agreements (wrong addresses pre-IBC references unstamped) fake board resolutions (annual return mismatch) no balance sheet interest despite 12% claim Companies Act violations. NCLT terminated CIRP finding routine transactions disguised as debt to defeat Rockmans successful OMP (shareholding restored 20th July 2022). NCLAT upheld noting Resolution Professional confirmed ledgeraudit discrepancies emphasizing Section 65 prevents IBC misuse beyond mere debtdefault scrutiny when fraud evident.
