On 14 September 2026 the Mumbai bench of the National Company Law Tribunal dismissed the liquidator’s petition for a Rs 500 crore refund from Boeing. The decision holds that pre‑delivery payment disputes are outside the jurisdiction of the NCLT under Section 60(5) of the Insolvency and Bankruptcy Code. Consequently the Jet Airways liquidation estate cannot recover the advance as a liquidation asset and the claim must be pursued in a regular civil court. The ruling therefore limits the tribunal’s power to adjudicate contractual issues within insolvency proceedings.

Full News Breakdown

The dispute originated when Boeing halted two aircraft purchase agreements after Jet Airways missed payment milestones, prompting the liquidator to seek restitution of the USD 92.13 million advance. The NCLT concluded that determining the validity of the suspension, forfeiture and set‑off required a full trial, and therefore refused to entertain the claim within the insolvency framework.

• Case Name: Jet Airways liquidator’s petition against Boeing

• Court: National Company Law Tribunal, Mumbai Bench

• Bench: Prabhat Kumar and Sushil Mahareorao Kochey

• Date: 14 September 2026

• Statutes Cited: Insolvency and Bankruptcy Code, 2016 and IBBI (Liquidation Process) Regulations, 2016

• Key Provisions: Section 60(5) and Regulation 29 IBBI Regulations

• Primary Legal Issue: Whether the NCLT can adjudicate a contractual dispute over pre‑delivery payments in a liquidation proceeding

• Petitioner Arguments: Advance formed part of the liquidation estate under Section 36 IBC and should be refunded

• Respondent Arguments: Advance was set‑off against its admitted claim under Regulation 29 and the dispute is contractual, not insolvency‑related

• Court's Reasoning: Factual and legal questions about contract termination, forfeiture and set‑off require a full trial and lie beyond the limited jurisdiction of the NCLT under Section 60(5)

• Ratio Decidendi: The NCLT may only decide issues arising directly from the insolvency process and contractual disputes must be heard by a competent civil court

• Operative Order: The liquidator’s claim for refund was dismissed and parties were directed to pursue the matter in a regular court of law

• Practical Outcome: The liquidation estate cannot recover the advance through the IBC process and Boeing’s claim remains unaffected

How Does This Affect You?

Earlier, practitioners were uncertain whether a liquidator could treat a disputed advance as a claim against the debtor’s estate. The tribunal now clarifies that such contractual disagreements fall outside the insolvency framework and must be litigated in ordinary courts. This creates a clear demarcation: only bona‑fide insolvency claims survive in the NCLT, while any dispute over contract performance or termination must be pursued separately. The three audience sections below outline the concrete steps each stakeholder should take.

For Lawyers & Advocates

• Liquidation schedules that contain claims dependent on contract termination are vulnerable to NCLT jurisdictional refusal.

• Purchase agreements that embed arbitration clauses or designate civil‑court jurisdiction for advance‑payment forfeiture mitigate exposure to NCLT dismissal.

• Pursuing parallel civil suits for disputed advances early preserves a creditor’s recovery right, given the limited efficacy of set‑off under Regulation 29.

• Referencing this decision in opposition to the inclusion of contractual disputes in liquidation reports strengthens the argument that such matters fall outside Section 60(5).

• Segregating “pure insolvency” claims from “contractual” claims in the resolution professional’s report prevents the latter from being treated as estate assets.

For Law Students

This case illustrates the strict territorial limits of the NCLT’s adjudicatory power under the insolvency regime.
The core doctrinal distinction is between “issues arising out of the insolvency process” and “independent contractual disputes.”
The decision is particularly relevant for the study of:

• Jurisdictional scope of Section 60(5) IBC

• Interaction between Regulation 29 and set‑off rights

• Treatment of pre‑delivery advances in liquidation

• Role of the resolution professional in claim‑schedule preparation

• Comparative analysis of civil‑court versus NCLT competence in corporate distress
  The judgment should be read alongside Hindustan Petroleum Corp. Ltd. v. Reliance Industries Ltd., 2020 (NCLAT) and Swiss Ribbons Pvt. Ltd. v. NCLT, 2022, because the former clarifies the boundary between insolvency claims and underlying contracts while the latter explores set‑off applications in liquidation. Comparing them highlights how courts parse “issues arising out of the insolvency process” versus “separate contractual rights.”

For Businesses

• Audits of aircraft purchase contracts for advance‑payment clauses become prudent for airlines and other capital‑intensive firms, given that recovery cannot depend on the insolvency estate.

• Embedding explicit termination and set‑off mechanisms in sales agreements reduces exposure for aerospace manufacturers, as disputes will be litigated in civil courts.

• Revising security documents to acknowledge that advances may be contested outside the IBC influences collateral valuation for financial institutions financing large advances.

• Separating contractual grievances from insolvency claims in the resolution professional’s report helps boards of companies undergoing CIRP avoid asset‑valuation distortions.

Key Takeaways

• The NCLT ruled that contractual disputes over pre‑delivery advances are outside its jurisdiction under Section 60(5) of the IBC.

• Practitioners must now split insolvency claims from underlying contract issues and pursue the latter in ordinary civil courts.

• Courts can no longer rely on Regulation 29 set‑off to extinguish disputed advances within a liquidation proceeding.

• Monitor the upcoming amendment to the IBC’s Section 60, which is expected to codify the jurisdictional boundary clarified by this judgment.

• In‑house counsel should review all pending advance‑payment disputes and file appropriate civil suits before any further insolvency filings are made.

Source: NCLT rejects Jet Airways' liquidator plea seeking Rs 500cr from Boeing