NCLAT dismisses BSE appeals over defreezing demat accounts in insolvency cases
The Facts
- The National Company Law Appellate Tribunal dismissed BSE’s appeals in the demat-account freezing case.
- The NCLAT said the National Company Law Tribunal had jurisdiction under Section 60(5) of the Insolvency and Bankruptcy Code to entertain applications seeking defreezing of demat accounts.
- The tribunal said the impugned orders were passed in valid exercise of that jurisdiction.
- The case involved Future Corporate Resources and Liz Traders and Agents.
- BSE had frozen the companies’ demat accounts during insolvency proceedings, citing defaults including non-payment of annual listing fees.
- Resolution professionals for the two companies approached NCLT so they could sell shares held by the companies to recover money.
Context
What did BSE argue against the NCLT orders?
BSE argued that the NCLT did not have jurisdiction under Section 60(5) of the IBC to decide the issue because it fell within the securities-law framework and SEBI circulars Hindu Business Standard @businessline.
Which companies were involved in the dispute?
The dispute concerned Future Corporate Resources and Liz Traders and Agents, whose demat accounts were frozen by BSE during insolvency proceedings Economic Times cnbctv18.com @businessline.
Why did the companies seek defreezing of the demat accounts?
According to the reports, resolution professionals wanted access to the accounts so they could sell shares held by the companies and recover money for the insolvency process Economic Times.
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