TATA Consultancy Services Limited vs Vishal Ghisulal Jain, Resolution Professional, SK Wheels Private Limited

Bench: 2 — Dr. Dhananjaya Y Chandrachud, A S Bopanna

In Brief

TCS sought to terminate a Facilities Agreement with SK Wheels Private Limited during the latter's insolvency proceedings. The NCLT and NCLAT stayed the termination to preserve SK Wheels as a 'going concern'. The Supreme Court reversed both orders, holding that the NCLT lacked jurisdiction because the termination was based on contractual breaches unrelated to insolvency, not the insolvency itself. The Court clarified that NCLT's residuary powers under Section 60(5)(c) apply only when disputes arise from insolvency, and contracts can only be protected if their termination would cause the debtor's corporate death.

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Insolvency and Bankruptcy Code Corporate Insolvency Resolution Process Contractual Termination NCLT Jurisdiction Residuary Powers Going Concern Arbitration Section 238 Override

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