Affle 3I Limited vs Axis Trustee Services Limited & Ors

[Arising out of the Impugned Order dated 12.06.2026 passed by the Adjudicating Authority, National Company Law Tribunal, New Delhi Bench - Court III in C.P.(IB) No. 169(ND)/2026]

IN THE MATTER OF:

Affle 3i Limited Formerly known as Affle India Limited A47, Lower Ground Floor, Off Amar Bhawan, Hauz Khas, New Delhi 110016 Through its authorised representative Mr. Kapil Mohan Bhutani Email: legal@affle.com ...Appellant

Versus

Axis Trustee Services Limited Axis House, P.B. Marg, Worli, Mumbai, Maharashtra 400025 Also at: Plot 25, 2nd Floor, Pusa Road, Karol Bagh, New Delhi 110005 Email: atsl.legal@axistrustee.in, debenturetrustee@axistrustee.in ...Respondent No. 1

Talent Unlimited Online Services Private Limited Through Mr. Manish Agarwal Interim Resolution Professional 808, Devika Tower, Nehru Place, South Delhi, Delhi 110019 Email: cirp.tuos@gmail.com ...Respondent No. 2

Present: For Appellant : Mr. Abhijeet Sinha, Sr. Advocate with Mr. Nakul Sachdeva, Mr. Abhishek Ghai, Mr. Sagar Arora, Mr. Abhinandan Sharma, Advocates. For Respondents : Mr. Harshit Khare, Mr. Prafful Suri, Mr. Ayuj Agarwal, Mr. Brijesh Gupta, Advocates for R1 Mr. Apoorv Agarwal, Ms. Vaishnavi, Advocates for R2 Ms. Shruti Munjal, Ms. Trisha Dhara, Ms. Chitna Verma, Advocates for Suspended Board. JUDGMENT

(Hybrid Mode) Per: Barun Mitra, Member (Technical)

The present appeal filed under Section 61 of the Insolvency and

Bankruptcy Code, 2016 ('IBC' in short) by the Appellant arises out of the

Order dated 12.06.2026 (hereinafter referred to as the 'Impugned Order')

passed by the Adjudicating Authority (National Company Law Tribunal, New

Delhi-Court III) in C.P.(IB) No. 169(ND)/2026. By the said impugned order,

the Adjudicating Authority admitted the Section 7 application filed by

Respondent No. 1-Axis Trustee Services Ltd. admitting the Corporate Debtor-

Talent Unlimited Online Services Pvt. Ltd. into the rigours of Corporate

Insolvency Resolution Process ('CIRP' in short). Being aggrieved by the

impugned order, the Appellant has come up in appeal.

2. Before we go into the merits of the matter, we would like to deal with

I.A No. 5683 of 2026 filed by the Appellant seeking condonation of delay of 13

days in filing the appeal.

3. Explaining the reasons for delay, the Ld. Sr. Counsel for the Appellant

submitted that since it was not a party to the proceeding before the

Adjudicating Authority, they could acquire knowledge of the impugned order

only on 16.06.2026. Thereafter they needed some time to collect, collate,

examine and organise the relevant records necessary for preferring the appeal.

Moreover, some more time got consumed as before preferring the appeal, the

Appellant had made a proposal to the Debenture Holders through the

Debenture Trustee-Axis Trustee Services Ltd. to acquire the entire financial

debt of the Corporate Debtor without any haircut. On finding that their efforts

Page 2 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 to resolve the matter through their bonafide settlement proposal did not evoke

any meaningful response, they took recourse to filing of appeal proceedings

and this wait led to delay in the filing of the appeal. It was submitted that

delay was not intentional and denial of delay condonation would result in

miscarriage of justice. The condonation of delay application was opposed by

the Respondent No. 1 on the ground that the Appellant was well aware of the

impugned order initiating CIRP which is evident from the fact that they had

already filed their claim before the Resolution Professional ('RP' in short) on

26.06.2026 while the appeal was filed on 25.07.2026, which clearly shows

that the Appellant was sleeping over their rights and hence the delay does not

deserve condonation.

4. We have perused para 2 of the IA No. 5683 of 2026 wherein the reasons

for the delay have been elaborated by the Appellant. We find that sufficient

basis has been provided justifying the condonation of delay. Since the period

of delay is within the extended period of 15 days as provided under Section

61(2) of the IBC, we allow the delay condonation application.

5. For better appreciation of the substantive issues, it would be useful to

begin by taking notice of the broad factual background of the instant case at

hand. On a Section 7 application filed by Axis Trustee Services Ltd.-

Respondent No.1 in its capacity as the Debenture Trustee, the Corporate

Debtor was admitted into CIRP vide impugned order dated 12.06.2026 passed

by the Adjudicating Authority, following which the RP had made the public

announcement on 14.06.2026 inviting claims from the creditors of the

Corporate Debtor. Basis the claims filed by the creditors and subsequent to

Page 3 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 verification thereof, the RP had constituted the Committee of Creditors ('CoC'

in short). At this stage, it will also suffice to note that the present Appellant-

Affle 3i Ltd. ('Affle' in short) which had a share-holding in the Corporate

Debtor had purportedly submitted an assignment/settlement proposal on

03.07.2026 to the Respondent No.1 to bring the CIRP to an end, on which no

positive response having been received, the Appellant has preferred the

present appeal, assailing the impugned order admitting the Corporate Debtor

into insolvency.

6. Making submissions on behalf of the Appellant, Shri Abhijeet Sinha,

Ld. Sr. Counsel of the Appellant submitted that the Adjudicating Authority

while admitting the Section 7 application had proceeded on a narrow debt and

default analysis while disregarding the material circumstances that the CIRP

was invoked fraudulently. It was further submitted that the Appellant was a

substantial investor in the Corporate Debtor including holding of Compulsory

Convertible Preference Shares ('CCPS' in short) and therefore not a

shareholder simplicitor. It was also asserted that the Appellant possessed

independent and enforceable contractual rights under the Shareholders

Agreement. The Appellant as a creditor/decree holder of the Corporate Debtor

and by virtue of having a direct and subsisting legal and commercial interest

in the affairs of the Corporate Debtor, it enjoyed locus to file the present

appeal as an aggrieved party. It was contended that since CIRP was initiated

against the Corporate Debtor not for the statutory purpose of insolvency

resolution but initiated in a fraudulent manner for ulterior motives, the

Adjudicating Authority had erred in having failed to examine the matter on

Page 4 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 the touchstone of Section 65 of the IBC while admitting the Section 7

application.

7. Elaborating further it was submitted that there were on-going disputes

between the Appellant, Corporate Debtor and its suspended management

prior to the initiation of CIRP. Due to these disputes, the Appellant, in exercise

of its contractual inspection rights, had issued inspection notices to the

Corporate Debtor on 02.12.2022 and 07.12.2022 seeking access to material

contracts, financial accounts, funding requirements and other affairs of the

Corporate Debtor. However, as the Appellant was denied access to the

records, it had initiated inspection related proceedings before the High Court

of Delhi leading to the orders of the Delhi High Court dated 31.07.2023

allowing informational and inspection rights of the books and records of the

Corporate Debtor. Attention was also adverted to the fact that Singapore

International Arbitration Centre ('SIAC' in short) had also passed an

Inspection Order dated 11.03.2024 and an Award on Reimbursement of Costs

dated 02.04.2024. It was also added that the Delhi High Court by its judgment

dated 04.04.2026 had dismissed the challenge to the Arbitral Tribunal's order

and permitted execution of the inspection order passed by SIAC on

11.03.2024. The Appellant had clearly been accorded judicial recognition of

its enforceable rights concerning access to the affairs and records of the

Corporate Debtor. It was therefore emphatically asserted that besides being a

substantial strategic investor and a contractual inspection rights-holder, the

Appellant was an award-holder and decree-holder.

Page 5 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026

8. It was strenuously contended that the CIRP was fraudulently initiated

with a view to resist implementation of the arbitral award. The suspended

management had deliberately pushed the Corporate into rigours of CIRP so

as to absolve itself from implementation of the arbitration award by taking

advantage of the provisions of moratorium. It was asserted that this was not

a case of genuine insolvency but one where the IBC framework was being

misused so that no contractual rights could be asserted by the Appellant nor

any award executed. This clearly prejudiced the interest of the Appellant and

the creditors of the Corporate Debtor. However, this aspect was totally

overlooked by the Adjudicating Authority. It was also submitted that in terms

of the judgment of the Hon'ble Supreme Court of India in Independent Sugar

Corporation Ltd. Vs. Girish Shriram Juneja & Ors. in Civil Appeal No.

6071 of 2023, a person aggrieved under Section 61 of the IBC cannot be

subjected to an unduly rigid conception of locus which principle has also been

followed by this Tribunal in Chandra Shekhar Jha & Anr. Vs. Religare

Enterprises Ltd. & Ors in CA(AT)(Ins)No. 992 of 2023. Hence the Appellant

has a right to file the present appeal in the background of Section 61(1) of the

IBC which permits any person, aggrieved by an order of the Adjudicating

Authority, to file an appeal.

9. It was further submitted that no bonafide effort was made to preserve

the Corporate Debtor as a going concern which is evident from the fact that

the Corporate Debtor did not genuinely explore the alternative avenues of

available rescue funding. It was submitted that even prior to CIRP when the

Corporate Debtor had run into certain financial difficulties following which

Page 6 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 the Appellant had proposed a loan facility in March, 2023 to the Corporate

Debtor, the same was rejected and the Corporate Debtor had instead preferred

a competing financing proposal from Trifecta and that it was Trifecta which

later preferred the Section 7 application. The preference given to Trifecta's

financing proposal coupled with the exclusion of the Appellant from all

material developments of the Corporate Debtor leading to alleged default and

initiation of CIRP evidences a deliberate design to marginalise the Appellant

and to proceed with a pre-conceived insolvency process. Even after admission

of CIRP, the Appellant had addressed a letter on 03.07.2026 offering to

acquire or take assignment of the alleged debt without any haircut but got no

positive response. Instead of availing a friendly loan to discharge the entire

debt, Form G was engineered within five days of CIRP initiation. This

insistence on continuation of CIRP despite an available settlement route

shows misuse of IBC.

10. Per contra, it was contended by Shri Krishnendu Dutta, Ld. Sr. Counsel

for Respondent No. 1 that the purported grievance of the Appellant has arisen

solely from its interest as a shareholder of the Corporate Debtor which did not

constitute any direct or independent injury to the Appellant. Hence the

Appellant cannot be regarded as an aggrieved person under Section 61 of the

IBC thus rendering the appeal non-maintainable.

11. It was also asserted that the withdrawal/termination of CIRP could not

have been sought by the Appellant merely on the basis of a subsequent

proposal or settlement given by them as in terms of the amended Section 12A

of the IBC, no withdrawal of CIRP under Section 12A is possible before the

Page 7 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 constitution of the CoC and after the first invitation for submission of a

resolution plan by the RP. The statutory restrictions and procedural

safeguards introduced by the amended Section 12A require to be strictly

complied with. In the present case, where the CoC has already been

constituted and Form-G has already been published, the prayer of the

Appellant to bring the CIRP to an end basis their settlement proposal is

contrary to the statutory construct of Section 12A and is legally

impermissible.

12. It was vehemently argued that when no objections were raised before

the Adjudicating Authority either by way of pleading or oral submissions that

CIRP was fraudulently or maliciously initiated, the Appellant cannot

introduce this new plea under Section 65 for the first time in an appeal under

Section 61 of IBC. The allegation of fraudulent or malicious initiation of CIRP

which had neither been pleaded before the Adjudicating Authority nor

adjudicated upon by the Adjudicating Authority, cannot constitute a valid

ground for interference with the impugned order in the facts of the present

case wherein debt and default has been proven.

13. We have heard the Ld. Counsel for the parties and perused the records

carefully.

14. The short point for our consideration is whether the Section 7

application was fraudulently initiated and whether it has been overlooked by

the Adjudicating Authority in the impugned order.

Page 8 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026

15. To arrive at our analysis and findings, we may first run our eyes

through the impugned order. The relevant excerpts of the order are as

reproduced below:

"21. The Applicant in order to establish the existence of financial debt, its disbursement, and the occurrence and continuance of default has placed on record the Securities Subscription Agreement dated 03.03.2023, Debenture Trust Deed dated 03.03.2023, Debenture Trustee Appointment Agreement dated 03.03.2023 and Deed of Hypothecation dated 03.03.2023, the Addendum Cum Amendment Deed dated 14.09.2023, copies of debenture certificates issued by the Corporate Debtor, bank statements evidencing disbursement of funds, statement of account/ledger reflecting the outstanding principal and interest, Warning Letter dated 02.01.2026, Event of Default Notice dated 22.01.2026, Final Demand Notice dated 09.02.2026, email communications and correspondence wherein the Corporate Debtor has acknowledged its liability and sought time for repayment, minutes of meetings recording admission of financial distress and Record of Default filed with the Information Utility (NeSL).

22. The Respondent has not denied the fact that the execution of the documents and disbursal of the amount.

23. Moreover, the Applicant had issued a warning letter dated 02.01.2026 calling upon the Corporate Debtor to regularize the default within five days.

24. Thereafter, the default notice dated 22.01.2026 was issued by the Debenture Trustee to which the Respondent/Corporate Debtor vide e-mail dated 23.01.2026 replied.......

25. It is thus very clear that the Respondent/Corporate Debtor has acknowledged its liability and requested for 9 to 12 months' time for repayment of the outstanding dues.

27. Further, the Applicant has filed the information of default with the Information Utility i.e. NeSL on 23.01.2026 for part amount under default i.e. INR 1,89,13,351 on behalf of one of the debenture holders pursuant to which the NeSL has issued a record of default and the Record of Default has been placed on record by the Applicant."

(Emphasis supplied)

Page 9 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026

16. When we look at the impugned order, it is clear that the Adjudicating

Authority has satisfied itself on the basis of material on record that there was

a debt on the part of the Corporate Debtor qua Respondent No. 1 and that the

Corporate Debtor had committed a default in the discharge of this debt

liability which is also reflected in the NeSL records. The legal position is now

well settled by the judgement of the Hon'ble Supreme Court in Innoventive

Industries Ltd. v. ICICI Bank (2018) 1 SCC 407 that once the Adjudicating

Authority is satisfied that a financial debt exists and a default has occurred,

it must admit the application unless it is incomplete. Any enquiry under

Section 7(5)(a) of IBC is required to be confined strictly to the determination

of debt and default. Similarly, in Swiss Ribbons P. Ltd. v. Union of India

(2019) 4 SCC 17, the Hon'ble Apex Court had reiterated that the CIRP trigger

point is default. These binding principles have been consistently followed and

therefore admission under Section 7 becomes mandatory once debt and

default is established but for a narrow exception confined to its peculiar facts,

of which no such articulation was done before the Adjudicating Authority.

17. This now brings us to the contention of the Appellant that the impugned

order has simply recorded debt and incidence of default without going into

the questions of lack of bonafide in the invocation of the insolvency. It is the

case of the Appellant that Corporate Debtor's persistent denial of inspection;

non-disclosure of insolvency risk; rejection of pre-CIRP funding proposal

made by the Appellant; non-engagement of the Appellant inspite of their no-

haircut post CIRP acquisition settlement proposal; invocation of moratorium

as a shield against the enforcement of arbitral awards and court decrees

Page 10 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 cumulatively show that there was a deliberate and pre-conceived design on

the part of the Corporate Debtor to initiate insolvency in the present facts of

the case thereby warranting interference under Section 65 of the IBC.

18. At this stage we may glance through the statutory provision of Section

65 of the IBC which reads as follows:

"Section 65: Fraudulent or malicious initiation of proceedings.

65. (1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees.

(2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees.

(3) If any person initiates the pre-packaged insolvency resolution process--

(a) fraudulently or with malicious intent for any purpose other than for the resolution of insolvency; or

(b) with the intent to defraud any person,

the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees."

From a reading of the above provision, it is clear that Section 65 provides

that if any person initiates the insolvency resolution process or liquidation

proceedings fraudulently or with malicious intent for any purpose other

than for resolution of insolvency or liquidation, the Adjudicating Authority

may impose upon such person a penalty in order to prevent such person

from taking undue benefit of provisions of IBC to detriment of the rights of

legitimate creditors as well as to protect the Corporate Debtor from being

Page 11 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 dragged into CIRP with mala-fide. This statutory provision also empowers

the Adjudicating Authority to interdict the abuse of CIRP process at any

stage, if the Adjudicating Authority is satisfied from the surrounding facts

and circumstances on record, of fraud and/or malicious intent on the part

of any party seeking admission of CIRP of the Corporate Debtor.

19. At this juncture, it will also be constructive to take note of the

contentions raised and submissions made by the Corporate Debtor raised

before the Adjudicating Authority, as recorded at paras 15 and 16 of the

impugned order, to find out whether the Corporate Debtor had resisted the

admission of the Section 7 application. The relevant paragraphs are as

reproduced below:

"15. The Corporate Debtor submitted that since discussions and negotiations were being held between the Applicant/Financial Creditor and the Corporate Debtor for repayment of the dues, it cannot be said that the amount of default has crystalized and therefore there is no default within the meaning of Section 3(12) read with Section 7 of the Code.

16. The Respondent further submitted that the Applicant is attempting to use the Code as a recovery mechanism. The Respondent/Corporate Debtor further submitted that mere description of the Applicant as "Debenture Trustee" does not automatically clothe it with locus under Section 5(7) of the Code unless it is demonstrated that the underlying beneficiaries/debenture holders are Financial Creditors to whom financial debt is actually owed and that the Applicant is duly authorized under the debenture documentation to initiate Section 7 proceedings under the Code."

When we look at the above submissions made by the Corporate Debtor before

the Adjudicating Authority, we find that the Corporate Debtor had clearly

contested the debt and default and resisted the initiation of CIRP. In such

circumstances, when there was clearly no cogent evidence before the

Corporate Debtor to demonstrate that the Corporate Debtor had willfully

Page 12 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 pushed itself into insolvency, the allegation cannot be accepted unless

substantiated.

20. In understanding the contours of Section 65 of the IBC, we are also

guided by the judicial precedent laid down by the Hon'ble Supreme Court in

the case of Beacon Trusteeship Limited Vs. Earthcon Infracon Pvt. Ltd.

& Anr. in Civil Appeal no. 7641 of 2019 where under para 7, it held as

follows:

"7. Considering the provision of Section 65 of the IBC, it is necessary for the Adjudicating Authority in case such an allegation is raised to go into the same. In case, such an objection is raised or application is filed before the Adjudicating Authority, obviously, it has to be dealt with in accordance with law. The plea of collusion could not have been raised for the first time in the appeal before the NCLAT or before this Court in this appeal. Thus, we relegate the appellant to the remedy before the Adjudicating Authority."

This judgement clearly lays down that in the first instance it is the

Adjudicating Authority which is obliged to investigate the nature of the alleged

fraudulent transaction in accordance with law and exercise caution while

considering the attendant facts and circumstances of the case.

21. To answer the question as to whether the CIRP was initiated in the

present case in a fraudulent/malicious manner which attracted Section 65 of

the IBC, we must bear in mind that it is well settled that the degree of proof

and evidence required to prove any proceeding to initiate CIRP as fraudulent

should be beyond reasonable doubt and of an unimpeachable nature. The

threshold for determining fraudulent or malicious proceeding under Section

65 is rigorous and requires proof of deliberate intent of causing wrongful loss

to creditors. Specific material facts are therefore required to be pleaded if a

proceeding is sought to be brought under Section 65.

Page 13 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026

22. Since Section 65 is designed to deter misuse and protect the integrity

of the insolvency framework, it is incumbent upon the Adjudicating Authority

to examine the conduct of the Corporate Debtor in the surrounding

circumstances for satisfying itself that the threshold element of fraudulent

intent was met. However, in the present facts of the case, the records basis

which the Appellant has claimed fraudulent proceedings and sought to invoke

Section 65 were not made available to the Adjudicating Authority. We are also

inclined to agree with the Respondent No.1 that any grievance of fraudulent

or malicious initiation of CIRP was required to have been raised by the

Appellant before the Adjudicating Authority and adjudicated in accordance

with law. An issue which was required to have been considered by the

Adjudicating Authority in the first place cannot be raised by the Appellant at

the appellate stage.

23. In the absence of any cogent material having been placed before the

Adjudicating Authority to demonstrate any dishonest design on the part of

the suspended management to defraud creditors or to carry on business with

an intent to deceive, we are not persuaded to hold that the Adjudicating

Authority had knowingly omitted material facts basis which Section 65 of IBC

could have been invoked.

24. We are also of the considered view that for reasons of judicial propriety,

it may not be fair on the part of the Appellate Tribunal to arrive at any

conclusion on the fraudulent initiation of CIRP proceedings when no

foundational material was placed before the Adjudicating Authority. As

proceedings under Section 65 of the IBC requires strict construction, there is

Page 14 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026 an imperative need for the Appellant to place its contentions with supporting

material and evidentiary basis forming the foundation of their allegation of

fraudulent initiation of CIRP before the Adjudicating Authority.

25. In result, we do not find any good reasons to interfere with the

impugned order as it stands. However, we are allowing liberty to the Appellant

to place a proper Section 65 application before the Adjudicating Authority

which may consider all contentions raised therein alongwith other aspects

including the locus of the Appellant to file such an application to adjudicate

whether the proceedings have been initiated in a fraudulent manner. We

dispose of the appeal in accordance with the aforesaid direction. Parties shall

bear their own costs.

[Justice Yogesh Khanna] Officiating Chairperson

[Barun Mitra] Member (Technical) Place: New Delhi Date : 22.09.2026 Sheetal

Page 15 of 15 Company Appeal (AT) (Insolvency) No. 1474 of 2026