IBC Section 60: Adjudicating Authority for corporate persons

Section 60 of Insolvency and Bankruptcy Code, 2016: Adjudicating Authority for corporate persons

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) The Adjudicating Authority, in relation to insolvency resolution and liquidation for corporate persons including corporate debtors and personal guarantors thereof shall be the National Company Law Tribunal having territorial jurisdiction over the place where the registered office of the corporate person is located.

(2) Without prejudice to sub-section (1) and notwithstanding anything to the contrary contained in this Code, where a corporate insolvency resolution process or liquidation proceeding of a corporate debtor is pending before a National Company Law Tribunal, an application relating to the insolvency resolution or liquidation or bankruptcy of a corporate guarantor or personal guarantor, as the case may be, of such corporate debtor shall be filed before such National Company Law Tribunal.

(3) An insolvency resolution process or liquidation or bankruptcy proceeding of a corporate guarantor or personal guarantor, as the case may be, of the corporate debtor pending in any court or tribunal shall stand transferred to the Adjudicating Authority dealing with insolvency resolution process or liquidation proceeding of such corporate debtor.

(4) The National Company Law Tribunal shall be vested with all the powers of the Debt Recovery Tribunal as contemplated under Part III of this Code for the purpose of sub-section (2).

(5) Notwithstanding anything to the contrary contained in any other law for the time being in force, the National Company Law Tribunal shall have jurisdiction to entertain or dispose of-

(a) any application or proceeding by or against the corporate debtor or corporate person;

(b) any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and

(c) any question of priorities or any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code.

(6) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963) or in any other law for the time being in force, in computing the period of limitation specified for any suit or application by or against a corporate debtor for which an order of moratorium has been made under this Part, the period during which such moratorium is in place shall be excluded.

Legal Commentary & Landmark Judgments: Section 60

Section 60 vests the National Company Law Tribunal (NCLT) with exclusive subject-matter and territorial jurisdiction over all corporate insolvency, liquidation, and personal guarantor proceedings.

Statutory Powers & Jurisdiction: The NCLT having territorial jurisdiction over the registered office of the corporate debtor exercises exclusive jurisdiction.
Statutory Relief & Application: Section 60(2) mandates that where CIRP or liquidation is pending against a corporate debtor, any insolvency application against its personal guarantor must be filed before the very same NCLT, consolidating corporate and personal guarantor proceedings.

Under Section 60(5), NCLT is granted broad jurisdiction to entertain any application, claim, or question of law or fact arising out of or in relation to insolvency resolution.

Key Landmark Precedents:

Embassy Property Developments Pvt. Ltd. v. State of Karnataka (2020) 13 SCC 308: The Supreme Court held that Section 60(5) does not confer jurisdiction on NCLT to adjudicate public law or administrative disputes involving statutory leases and mining concessions, which remain under High Court writ jurisdiction.
Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta (2021) 7 SCC 209: Affirmed that NCLT has jurisdiction under Section 60(5)(c) to restrain the termination of power purchase agreements essential to the debtor's going-concern status where termination is grounded solely on insolvency.

Legal Commentary:

Section 60 centralizes insolvency disputes under a specialized tribunal, eliminating jurisdictional fragmentation. Consolidating personal guarantor insolvency with the corporate debtor before the same NCLT guarantees coordinated debt resolution.