India’s appellate tribunal for corporate and securities matters has delivered a significant ruling by rejecting the Securities and Exchange Board of India’s claim to recover penalties from Annies Apparel. The National Company Law Appellate Tribunal (NCLAT) held that SEBI’s demand could not be sustained under insolvency proceedings, reinforcing the legal boundaries between regulatory enforcement and creditor claims. The decision provides important clarity on how statutory penalties are treated when a company undergoes resolution under the Insolvency and Bankruptcy Code.