NCLAT rules foreign oil and gas assets cannot be included in Videocon Industries CIRP.

May 14, 2026 : The National Company Law Appellate Tribunal has upheld the exclusion of Videocon Group’s foreign oil and gas assets from the corporate insolvency resolution process (CIRP) of Videocon Industries Limited, delivering a significant ruling on the treatment of overseas subsidiaries and cross-border assets under the Insolvency and Bankruptcy Code (IBC). In a detailed judgment spanning multiple connected appeals, the appellate tribunal rejected former Videocon promoter Venugopal Dhoot’s repeated attempts to include Brazilian and Indonesian oil and gas holdings within the insolvency proceedings of Videocon Industries and its consolidated group entities.

The dispute arose from an order passed by the Mumbai bench of the National Company Law Tribunal (NCLT) on February 12, 2020, which had directed the resolution professional to treat the assets and liabilities of foreign entities including Videocon Oil Venture Ltd, Videocon Energy Brasil Ltd, Videocon Hydrocarbon Holdings Ltd, and Videocon Indonesia Nunukan Inc. as part of the assets of Videocon Industries Ltd for the purposes of the CIRP. That order was challenged by lenders led by State Bank of India and several stakeholders connected to the overseas oil and gas ventures.

The appellate tribunal observed that the core issue across all appeals was whether foreign oil and gas assets held through separate subsidiaries could legally be merged into the insolvency estate of Videocon Industries Ltd and 12 other domestic group companies undergoing a consolidated CIRP. The tribunal ultimately answered this question in the negative, holding that the foreign assets could not be treated as part of the Indian company’s insolvency pool.

The judgment extensively relied on the conduct and earlier representations made by Venugopal Dhoot himself. The tribunal noted that in 2016 and 2017, Dhoot had approached lenders requesting that Videocon Industries be removed as a co-obligor and converted into a corporate guarantor specifically to “ring-fence” the overseas oil and gas assets from the financial stress affecting the domestic business. The tribunal reproduced portions of Dhoot’s own letters, where he stated that the restructuring was necessary “to protect the oil and gas assets of the group from the financial stress being experienced by VIL in the domestic business.”

The NCLAT found that this position directly contradicted Dhoot’s later argument that the foreign oil and gas assets formed part of a “single economic entity” with Videocon Industries. According to the tribunal, the former promoter had consistently maintained a separate structure for the overseas assets until the insolvency proceedings progressed. The bench remarked that “the entire journey by Mr Dhoot has been of flip-flops” and concluded that the lenders had consistently treated Videocon Industries and Videocon Oil Venture Ltd as distinct entities.

The tribunal also highlighted that Videocon Oil Venture Ltd itself had earlier approached the Supreme Court of India seeking protection of the overseas assets and had argued that the oil and gas holdings belonged exclusively to Videocon Oil Venture Ltd. The appellate bench pointed out that there was “nowhere in the writ petition” any claim that the foreign assets belonged to Videocon Industries Ltd or were covered by the moratorium imposed under Section 14 of the IBC.

In its legal analysis, the tribunal placed significant emphasis on the commercial wisdom doctrine under Section 30(4) of the Insolvency and Bankruptcy Code. Referring to Supreme Court rulings including Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta and India Resurgence ARC Pvt Ltd v. Amit Metaliks Ltd., the NCLAT reiterated that decisions relating to asset treatment, distribution mechanisms, and feasibility of resolution plans fall primarily within the domain of the Committee of Creditors (CoC). The bench observed that courts cannot interfere with such commercial decisions unless there is clear violation of statutory provisions or unfair discrimination among similarly situated creditors.

The appellate tribunal further held that even the filing of claims by lenders against Videocon Industries based on corporate guarantees did not automatically mean that the assets of the borrower company must become part of the guarantor’s CIRP. Referring to Section 60(2) and Section 60(3) of the IBC and Supreme Court precedents on co-extensive liability between borrower and guarantor, the tribunal clarified that separate insolvency proceedings can continue simultaneously for both entities without merging their asset pools.

Another important aspect of the ruling involved the approval of transactions concerning Brazilian oil and gas assets. The tribunal upheld the NCLT’s June 26, 2024 order approving the consummation of a transaction involving BPRL Ventures B.V. in relation to assets held through Videocon Energy Brasil Ltd. The bench noted that the process was conducted after respecting pre-existing contractual rights, including rights of first refusal (ROFR), and found that the resolution mechanism adopted by the CoC and resolution professional was commercially viable and legally valid.

The tribunal endorsed the NCLT’s observation that insolvency proceedings under the IBC do not provide a “carte blanche to override pre-existing third party contractual rights” merely by invoking Section 238 of the Code. The judgment further stated that “there is always a scope of innovation and experimentation” in insolvency resolution so long as the process remains directed toward value maximisation for stakeholders.

Importantly, the appellate bench concluded that its earlier January 5, 2022 judgment in connected proceedings had already settled the controversy relating to inclusion of foreign oil and gas assets in the Videocon Industries CIRP. It held that the earlier ruling had effectively overruled the NCLT’s February 12, 2020 order that favoured Dhoot’s position. The tribunal observed that “the issue of inclusion of assets in the CIRP of VIL+12 group companies has been considered and answered conclusively in the negative.”

The ruling carries substantial implications for India’s insolvency jurisprudence, particularly in cases involving multinational corporate structures and offshore subsidiaries. The judgment reinforces the principle that foreign subsidiaries with separate ownership and financing arrangements cannot automatically be absorbed into the insolvency estate of an Indian parent company. It also strengthens the autonomy of the Committee of Creditors in deciding asset treatment and resolution strategies under the IBC framework.

The decision is expected to influence future cross-border insolvency disputes, especially where promoters seek substantive consolidation of foreign subsidiaries after insolvency proceedings have already commenced. By upholding the sanctity of contractual structures, security arrangements, and lender-driven commercial decisions, the NCLAT has further clarified the limits of judicial intervention in complex insolvency matters involving global assets and group companies.

Case Reference : National Company Law Appellate Tribunal: State Bank of India v. Venugopal Dhoot & Ors., Company Appeal (AT) (Ins.) No. 299 of 2020 along with connected appeals, decided on May 16, 2026.