NCLAT quashes Ligare Aviation's insolvency; loan from Religare Enterprises round-tripping of money

The National Company Law Appellate Tribunal (NCLAT) has set aside insolvency proceedings against Ligare Aviation Ltd, holding that the NCLT erred in admitting the plea filed by Religare Enterprises without properly examining the nature of the underlying transactions, which was "only round tripping of money" and not "any genuine financial transaction".

In a strongly worded order, the appellate tribunal said the material on record "clearly proves" that there was no financial debt disbursed by the financial creditor (Religare Enterprises) to the corporate debtor (Ligare Aviation) for consideration of the time value of money, a key requirement under the Insolvency and Bankruptcy Code (IBC).

Allowing appeals filed by Daiichi Sankyo Company, a Japanese global pharmaceutical company and a shareholder, NCLAT observed that the transactions in question were merely a "round tripping of money/layering of money" undertaken for "some undisclosed fraudulent purposes" and did not create any financial debt capable of triggering insolvency proceedings.

"We have come to the conclusion that the materials on the record clearly proves that there was no financial debt which was disbursed by Financial Creditor (Religare Finvest) to the Corporate Debtor (Ligare Aviation) for time value of money…" said a two-member NCLAT bench.

Moreover, the MoU for loan was a "sham one-pager document created dishonestly to give the colour of genuine transactions to fraudulent transaction," NCLAT noted its order passed on May 27, 2026.

Religare Enterprises and Ligare Aviation are both group companies and related parties. A host of companies, including these two, were controlled by Malvinder Mohan Singh and Shivinder Mohan Singh, the two brothers who were ex-promoters of Ranbaxy Laboratories and Fortis Healthcare.

In its 69-page-long order, the NCLAT also faulted the New Delhi-based Principal Bench of the National Company Law Tribunal (NCLT) for admitting the insolvency plea filed by Religare Enterprises despite the absence of a genuine financial debt.

"Adjudicating Authority (NCLT) has not even looked into the plea that the amount was immediately transferred and did not remain even for 24 hours with the corporate debtor," said NCLAT.

The NCLAT noted that ₹3.6 crore transferred by Religare Arts Investment Management Ltd (RAIML) to Ligare Aviation on March 31, 2009, was remitted to Religare Finvest, a subsidiary company of Religare Enterprises, which was reflected in the bank transfer of the same day.

"The bank transfer of 31.03.2009 further indicates various amounts received from different group companies and transmitted on the same day to other group companies of the group" said NCLAT.

It was claimed that a Memorandum of Understanding (MoU) was entered between RAIML and Ligare Aviation on March 30, 2009 under which an amount of Rs 5 crore was sanctioned with interest of 13 per cent. Following that MoU, RAIML transferred Rs 3.6 crore on March 31, 2009.

Meanwhile, Daiichi Sankyo received an arbitral award of ₹3,500 crore on April 29, 2016, in Singapore from Singh Brothers and their various companies, which initiated proceedings for the enforcement of the foreign award before the Delhi High Court.