What changed with the Delhi High Court ruling on insolvency disputes?

The court reaffirmed that disputes tied to insolvency or liquidation, including fraud allegations connected to the process, fall within the NCLT’s remit under IBC Section 60(5). It discouraged using civil courts to bypass IBC and, in one case, imposed ₹2 lakh costs. Expect fewer injunctions, faster timelines, and clearer forum control.

How does IBC Section 60(5) affect fraud and debt assignment claims?

Section 60(5) allows the NCLT to decide questions of law or fact arising from IBC proceedings. When fraud or debt assignment disputes are linked to the insolvency, they can be adjudicated by the tribunal. This centralizes review, cuts parallel litigation risk, and helps creditors and bidders plan around tribunal-led timelines.

Why does the JetLite plea in Jet Airways liquidation matter to investors?

If JetLite staff are included in Jet Airways’ liquidation pool, the distribution waterfall may change. That can dilute recoveries for other claimants and shape how group entities’ employees are treated in future cases. The January 12 hearing could set a practical precedent, so model scenarios for potential inclusion and verification steps.

What should bidders and lenders do now?

Recalibrate diligence and models assuming tribunal-centric adjudication. Review assignment chains, related-party links, and potential avoidance transactions. Build evidence packs suited for NCLT proceedings. After the January 12 hearing on JetLite, update recovery timelines, assess dilution risks from new claims, and incorporate appeal contingencies into investment and workout plans.

Law and Government

January 9: Delhi HC Affirms NCLT Fraud Jurisdiction; JetLite Claims Test

ByHuzaifa Zahoor January 9, 2026

NCLT jurisdiction under IBC took center stage on January 9 as the Delhi High Court affirmed broad powers to decide fraud and debt disputes tied to insolvency and liquidation. The ruling curbs civil court interference, which can speed timelines and improve recoveries for lenders and bidders. Separately, JetLite staff have sought inclusion in Jet Airways’ liquidation, with a hearing set for January 12. We explain the legal impact, near-term risks, and the signals this sends to India’s stressed-asset market.