NCLAT stays NCLT's admission of insolvency proceedings against Prime Focus
This story was originally published at 19:59 IST on 12 May 2026
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NEW DELHI – The National Company Law Appellate Tribunal Tuesday stayed an order by the Mumbai bench of the National Company Law Tribunal to start insolvency proceedings against Prime Focus Ltd. Last week, the Mumbai tribunal had admitted Reliance Alpha Services Pvt. Ltd.'s petition to start insolvency proceedings against Prime Focus for unpaid dues of INR 3.54 billion.
The appellate tribunal noted Prime Focus' statement that the company was willing to deposit the entire dues in an interest bearing account with the registrar by May 20. It also noted that Prime Focus was a solvent company with 12,000 employees and the company has not just liquidity but also assets of much more than INR 3.54 billion. Reliance Alpha Services said Prime Focus had more dues and it was much more than INR 3.54 billion.
The appellate tribunal issued a notice to Reliance Alpha Services on Prime Focus' Non-Executive Director Nishant Avinash Fadia's plea challenging the insolvency admission by the Mumbai tribunal. The appellate tribunal also gave liberty to Reliance Alpha Services to make an application for vacation of interim order of stay if the amount was not deposited by Prime Focus within the timeframe. The appellate tribunal will now hear the case next on Jul. 9.
The case has its genesis in a business transfer agreement entered into in 2014 between Prime Focus and an affiliate of Reliance Alpha. On failure to pay the dues under the agreement, Reliance Alpha had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Prime Focus.
Prime Focus said it was well within the scope to address and resolve any financial obligation that the company was expected to. Further, it has consistently maintained, and continues to maintain, that no amount was ever disbursed by Reliance Alpha to Prime Focus, it said. Accordingly, its position is that Reliance Alpha does not qualify as a "financial creditor" within the meaning of the 2016 Code, and the insolvency petition ought not to have been admitted, said Prime Focus.
On Tuesday, shares of Prime Focus Ltd. ended 1% lower at INR 288.80 on the National Stock Exchange. End
Reported by Surya Tripathi
Edited by Avishek Dutta
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