# M/s. North Life Spaces LLP vs. Dalal Family Private Trust

> NCLAT judgment dated 2026-09-09. Citation: TCN-2026-NCLAT-00266. The appeal challenges an order by the National Company Law Tribunal (NCLT), Mumbai Bench,…

- **Court:** NCLAT
- **Order date:** 9 Sept 2026
- **Citation:** TCN-2026-NCLAT-00266
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ms-north-life-spaces-llp-vs-ms-north-life-spaces-llp-ngxxr

## Summary

### Background

The appeal challenges an order by the National Company Law Tribunal (NCLT), Mumbai Bench, dated 19.08.2025, which closed a Section 7 Insolvency and Bankruptcy Code (IBC) petition and directed the release of a deposited amount to the Respondent without adjudicating the existence of financial debt, default, or the maintainability of the petition. The Appellant, M/s. North Life Spaces LLP, had entered into a Facility Agreement with the Respondent, Dalal Family Private Trust. The Respondent claimed a debt of approximately Rs. 4.15 crores and initiated Section 7 proceedings. The Appellant contested the petition on grounds of maintainability, authority of the person instituting proceedings, and the existence of debt and default. After the petition was reserved for orders,

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## Facts

The present appeal arises out of an order dated 19.08.2025 passed by the National Company Law Tribunal (NCLT), Mumbai Bench, in Company Petition (IB) No. 576 (MB) of 2025.

The Adjudicating Authority disposed of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), directing release of a deposited amount to the Respondent without adjudicating the existence of financial debt, default, and maintainability of the petition.

The Appellant, M/s. North Life Spaces LLP, entered into a Facility Agreement dated 05.04.2021 with the Respondent, Dalal Family Private Trust.

The Respondent claimed approximately ₹.4.15 crores was due from the Appellant and demanded its payment.

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## Issues and analysis

### Issue 1: Whether the deposit made by the Appellant after the Company Petition had been reserved for orders …

**Ratio:** A deposit made 'without prejudice' to rights, remedies, and contentions, especially when

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**Reasoning:** The Appellant explicitly stated the deposit was 'without prejudice' and to show solvency,

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**Interpretation:** The 'without prejudice' clause in the deposit means it cannot be construed as

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**Application:** The NCLT's order to close the Section 7 petition based solely on the 'without

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## Parties

- **Judges:** N. Sesha…; Indevar P…
- **Respondents:** M/s. North Life…; Dalal Family…
- **Advocates:** Krishnendu…; Priyanka…; +12 more

## Timeline

- **2021-04-05 — Facility Ag…**: The Appellant, M/s. North Life Spaces LLP, entered into a Facility Agreement with the…
- **2025-08-12 — Petition Reserved for…**: The Company Petition (IB) No. 576 (MB) of 2025 and the interlocutory application were…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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