NCLAT ruled Religare's Ligare 'loan' was round-tripping and scrapped the insolvency

In May 2026 the National Company Law Appellate Tribunal set aside insolvency proceedings against Ligare Aviation, holding the NCLT erred in admitting Religare Enterprises' plea without examining the underlying transactions, which were 'only round tripping of money' and not any genuine financial transaction. The 69-page order, passed on May 27, 2026 by a bench of Chairperson Justice Ashok Bhushan and Member Barun Mitra, allowed appeals by shareholder Daiichi Sankyo.

The story began in March 2009, when an MoU between Religare Arts Investment Management and Ligare Aviation — both controlled by former Ranbaxy and Fortis promoters Malvinder and Shivinder Mohan Singh — sanctioned a ₹5 crore loan at 13 per cent. ₹3.6 crore was transferred on March 31, 2009 and remitted the same day to Religare Finvest. NCLAT noted the amount 'did not remain even 24 hours with the corporate debtor' and called the MoU 'a sham one-pager document created dishonestly'.

The fiction caught up with its authors: after Daiichi Sankyo won a ₹3,500 crore arbitral award against the Singh brothers and their companies in 2016, and Religare Finvest's own 2019 FIR alleged the MoU advances were never meant to be repaid and were meant to siphon money, Religare Enterprises nonetheless filed an insolvency plea in January 2021 for ₹5.87 crore. NCLAT found no financial debt disbursed 'for time value of money' existed, so insolvency could never have been triggered — and the fraudulent-purpose findings now sit in an appellate record that aids Daiichi's enforcement.

Related-party round-tripping depends on nobody reading the bank statements; the same-day transfer out dismantled the debt claim.

A one-page MoU could not survive scrutiny once the group's own subsidiary alleged in an FIR that the advances were meant to siphon funds.

Filing for insolvency on a transaction its own group had called a sham handed Daiichi Sankyo a ruling branding the deals fraudulent.

The NCLT admitted the plea without examining the transaction's nature — an error NCLAT called 'wholly erroneous'.

Paper dressed up as debt does not become debt: round-tripped money leaves a paper trail of same-day transfers that tribunals can read, and using it as a legal weapon invites the finding you feared.

The order ends the corporate insolvency resolution process against Ligare Aviation and clears the way for Daiichi Sankyo's appeals in its long enforcement fight over the ₹3,500 crore Singapore award. NCLAT also held that the Religare Finvest FIR and its allegations were not to be relied on as substantive evidence in the Section 7 proceeding.