Penalty Levied By SEBI Post-Insolvency Commencement Cannot Be Claimed in CIRP: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, ruled that a ₹25 crore penalty imposed by the Securities and Exchange Board of India (SEBI) after the commencement of the Corporate Insolvency Resolution Process (CIRP) against Medybiz Private Limited could not be admitted as a valid claim under the Insolvency and Bankruptcy Code, 2016.

The Tribunal held that only claims existing on the insolvency commencement date can be considered during CIRP.

The Court observed that SEBI’s penalty, imposed after the moratorium took effect, did not qualify as an operational debt within the meaning of Section 5(21) of the Code. Accordingly, SEBI’s claim was rejected as not maintainable.

[SEBI v Medybiz Private Limited]