# Federal Bank Limited vs. Mr. Pradeep Upadhyay, Liquidator Ofdugal Associates Pvt. Ltd

> NCLAT judgment dated 2026-05-11. Citation: TCN-2026-NCLAT-00194. Federal Bank Limited (Appellant) filed an appeal against an order by the National Company Law…

- **Court:** NCLAT
- **Order date:** 11 May 2026
- **Citation:** TCN-2026-NCLAT-00194
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/federal-bank-limited-vs-mr-pradeep-upadhyay-liquidator-ofdugal-associates-pvt-lt-dlkjk

## Summary

### Background

Federal Bank Limited (Appellant) filed an appeal against an order by the National Company Law Tribunal (NCLT), New Delhi, dated 30.05.2025. The NCLT order dismissed Federal Bank's application, finding no merit in its contentions regarding the distribution of liquidation proceeds of M/s. Dugal Associates Private Limited (Corporate Debtor). The Liquidator (Respondent), Mr. Pradeep Upadhyay, had included the Excise and Taxation Department Gurgaon as a secured financial creditor, relying on the Supreme Court's judgment in *State Tax Officer (1) v. Rainbow Papers Limited*. Federal Bank, a secured financial creditor who had relinquished its security interest, objected to this inclusion and the Liquidator's actions of withholding funds and stopping payment on a cheque.

## Facts

Federal Bank Limited (Appellant) filed an appeal against the Order dated 30.05.2025 passed by the National Company Law Tribunal (NCLT), New Delhi, Court-IV.

The NCLT order dismissed Federal Bank's application (I.A. No. 2341/ND/2024 in CP (IB) No. 1581/ND/2019) finding no merit in its contentions.

M/s Roofs and Ceilings (I) Private Limited, an Operational Creditor, filed an application under Section 9 of the IBC for initiation of CIRP against M/s. Dugal Associates Private Limited (Corporate Debtor).

The CIRP of the Corporate Debtor was initiated on 11.12.2019.

Liquidation proceedings were initiated on 12.01.2022 under Section 33(2) of the IBC.

…

## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in treating the Excise and Taxation Department Gurgaon as …

**Ratio:** State tax authorities are not secured creditors under the IBC unless they hold a specific

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**Reasoning:** The NCLAT found that the Excise and Taxation Department Gurgaon does not possess any

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**Interpretation:** Section 53 of the IBC outlines the waterfall mechanism for distribution of

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**Application:** The Liquidator's action of including the Excise and Taxation Department Gurgaon

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## Parties

- **Judges:** N. Sesha…; Arun Ba…
- **Appellants:** Federal Bank…
- **Respondents:** M/s. Dugal…; Pradeep Up…; +4 more
- **Other parties:** Stakeholders…; Punjab National…; +1 more
- **Advocates:** Brijesh Kumar…; Prateek Ku…; +4 more

## Timeline

- **2019-12-11 — CIRP Init…**: The Hon'ble Adjudicating Authority initiated the Corporate Insolvency Resolution Process…
- **2022-01-12 — Liquidation In…**: Liquidation proceedings were initiated against the Corporate Debtor under Section 33(2)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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