NCLAT Rules in Favour of NCLT in Demat Account Defreezing, Dismissing BSE Appeals

The National Company Law Appellate Tribunal (NCLAT) has upheld the National Company Law Tribunal (NCLT)'s authority to direct the defreezing of demat accounts of companies involved in insolvency proceedings, dismissing appeals by the Bombay Stock Exchange (BSE),as per news reports. 

NCLAT Upholds NCLT’s Authority for Defreezing Demat Accounts 

On March 29, 2026, NCLAT dismissed BSE's appeals and confirmed that NCLT is empowered under Section 60(5) of the Insolvency and Bankruptcy Code (IBC) to defreeze demat accounts as part of insolvency resolutions. The tribunal deemed the NCLT orders were within its jurisdiction. 

The appeals were linked to two companies, namely Future Corporate Resources and Liz Traders and Agents, whose accounts were frozen due to BSE listing fee dues. Resolution professionals sought NCLT intervention to unlock funds. 

Legal Analysis from NCLAT and Implications 

NCLAT noted that the accounts were frozen over dues now part of insolvency claims, indicating that these issues fit under the IBC framework.  

NCLAT emphasised that IBC provisions, under Section 238, override securities laws if conflicts arise. 

Read More: NCLAT Rejects Vedanta's Stay Plea on Adani's ₹14,535 Crore Jaiprakash Resolution Plan! 

BSE's Argument and NCLAT’s Rebuttal 

BSE argued that the NCLT had overstepped, as the matter falls under securities laws and SEBI jurisdiction.  

However, NCLAT highlighted that IBC provisions take precedence in such conflicts, with the tribunal noting undisputed ownership of shares. 

The Tribunal's Final Verdict 

NCLAT's detailed judgment reiterated the overriding nature of IBC in matters of insolvency, granting NCLT jurisdiction to defreeze accounts.  

BSE's legal attempts were overturned, maintaining that the NCLT orders, dating from July 31, 2024, and October 31, 2025, were validly executed. 

Conclusion 

This decision underscores the primacy of IBC in insolvency processes over securities regulations. NCLAT’s judgment confirms NCLT’s authoritative role, bringing clarity in jurisdictional matters linked to insolvency resolutions. 

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