Effect of Post Facto NCLT Approval on Arbitration Invocation by Liquidators Under IBC
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Case: TECPRO SYSTEMS LIMITED v. RELIANCE INFRASTRUCTURE LTD
Court: Bombay High Court
Date: 22-07-2026
Law: Arbitration and Conciliation Act, Insolvency and Bankruptcy Code.
Highlights of the Judgment:
- Interpretation of the proviso to Section 33(5) of the Insolvency and Bankruptcy Code, 2016 regarding the institution of legal proceedings by a Liquidator.
- Examination of whether the requirement for "prior approval" from the Adjudicating Authority is mandatory or directory in nature.
- Analysis of the legal validity of an arbitration invocation notice issued under Section 21 of the Arbitration and Conciliation Act, 1996 without antecedent NCLT approval.
- Application of the doctrine of purposive interpretation to prevent the voiding of proceedings "ab initio" in the absence of express statutory annulment provisions.
- Determination of the effective date of commencement for arbitral proceedings when post facto approval is granted by the Adjudicating Authority.
- Comparison between Section 28(4) and Section 33(5) of the Insolvency and Bankruptcy Code regarding the consequences of unauthorized actions.
- Judicial precedents on the distinction between "approval", "prior approval", and "permission" in statutory frameworks.