NCLAT Delhi imposed ₹5 lakh in exemplary costs for non-disclosure of a prior NCLT order and multiplying litigation in a shareholder appeal linked to Dreams the Mall restructuring.
NCLAT Imposes ₹5 Lakh Exemplary Costs for Concealing Prior NCLT Order
NCLAT Delhi dismissed a shareholder’s appeal challenging a restructuring plan in the matter of Dreams the Mall and imposed ₹5 lakh in exemplary costs. The tribunal held that the appellant had deliberately concealed a previous order passed by the NCLT, which was directly relevant to the dispute, thereby undermining judicial transparency and fairness.
The bench emphasized that parties before tribunals have a duty to make full and fair disclosure of all previous proceedings. By omitting such information, the appellant not only violated principles of good faith but also contributed to the unnecessary multiplication of proceedings. The tribunal observed that such conduct frustrates the purpose of the Insolvency and Bankruptcy Code, 2016 (IBC), particularly its goal of timely resolution.
“Concealment of relevant orders amounts to abuse of process and warrants heavy costs to deter such conduct in the future.”
Legal practitioners must ensure complete procedural compliance, including mandatory disclosure of related litigation. The ruling reinforces NCLAT’s willingness to penalize dilatory or misleading tactics in corporate insolvency matters, serving as a deterrent for non-transparent litigation strategies.