The Supreme Court, in its recent decision in Piramal Capital and Housing Finance Ltd v. 63 Moons Technology explained the key difference between how the Insolvency and Bankruptcy Code 2016 deals with avoidance transactions and transactions relating to fraudulent or wrongful trading. Notably, under the IBC 2016, 'avoidance transactions' are specific transactions conducted by a corporate debtor prior to insolvency proceedings that are deemed detrimental to the interests of creditors. These include (1) Preferential transactions, (2) Undervalued transactions, (3) Extortionate Credit transactions; (4) Fraudulent transactions.

NCLAT

NCLAT Upholds Liquidation Of Go Airlines, Permits Submission Of Compromise/Arrangement Within 90 Days Of Liquidation Order

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) have held that the Committee of Creditors (CoC), acting under its commercial wisdom and in accordance with Section 33(2) of the Insolvency and Bankruptcy Code, 2016, was within its rights to resolve to liquidate the Corporate Debtor, Go Airlines (India) Ltd., in the absence of any compliant resolution plan.

Adjudicating Authority Cannot Accept Report Of Resolution Professional Mechanically, Must Conduct Independent Assessment U/S 100 Of IBC: NCLAT

Dissenting Financial Creditors Are Entitled To Receive Payments On Pro-Rata Basis Of Resolution Plan Value Rather Than Liquidation Value: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that dissenting financial creditors are entitled to receive payments on a pro-rata basis of the Resolution Plan rather than the liquidation value.

Breach Of Settlement Agreement Does Not Preclude Financial Creditors From Filing Application U/S 7 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that financial creditors are not precluded from filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code), merely because they have entered into a settlement agreement with the corporate debtor that was subsequently breached. The nature of the debt remains unchanged, even if a settlement agreement has been executed between the parties.

All Assets Reflected In Balance Sheet Of Corporate Debtor Form Part Of Liquidation Estate U/S 36 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that all assets reflected in the balance sheet of the Corporate Debtor form part of the liquidation estate under Section 36 of the Insolvency and Bankruptcy Code, 2016 (Code) and cannot be distributed to creditors outside the framework prescribed under Sections 52 and 53 of the Code. If any asset of the Corporate Debtor has been realized by a creditor during liquidation, such asset must be returned to the Liquidator.

Appeal U/S 61 Of IBC Is Maintainable Against Order Passed By NCLT Initiating Insolvency Process Against Personal Guarantors: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that An appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (Code) can be filed by personal guarantors against an order passed by the Adjudicating Authority under Section 100 of the Code, directing the initiation of the Personal Insolvency Resolution Process (PIRP), as the National Company Law Tribunal (NCLT) is the appropriate forum for initiating insolvency proceedings against personal guarantors.

Adjudicating Authority Cannot Suo Moto Amend Date Of Default In Insolvency Application Unless Amendment Application Is Filed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that the Adjudicating Authority cannot suo moto amend the date of default mentioned in the insolvency application unless an amendment application is filed; otherwise, it would tantamount to exceeding its jurisdiction, which is not permissible in law.

Liquidation Order U/S 33 Of IBC Cannot Be Set Aside When Third Party Has Taken Possession Of Property After Sale Conducted By Liquidator: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that the order passed under Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (Code), directing the liquidation of the corporate debtor, cannot be set aside once the Successful Auction Purchaser has taken possession of the corporate debtor's property pursuant to the sale conducted by the liquidator.

Committee Of Creditors Not Prohibited From Seeking Multiple Modifications Or Revisions Of Resolution Plans: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that the Committee of Creditors (CoC) is empowered to seek revisions or modifications in the Resolution Plans submitted by the Resolution Applicants multiple times, as Regulation 39(1A) of the Corporate Insolvency Resolution Process (CIRP) Regulations, 2016 (CIRP Regulations), restricts only the Resolution Professional from permitting modifications to the plan more than once, but does not impose any such restriction on the CoC.

Decree Obtained By Operational Creditors From Civil Court Does Not Mean They Cease To Be Operational Creditors: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code), cannot be rejected solely on the ground that the Operational Creditor, having obtained a decree for the debt, ceases to be an Operational Creditor.

Recall Application Filed By Shareholder Cannot Be Entertained When Director Who Pursued Earlier Proceedings Had Resigned: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that an application filed by a shareholder cannot be entertained when the Suspended Director, who pursued the proceedings leading to the order sought to be recalled, has resigned. A shareholder cannot substitute the Director due to their distinct legal status.

NCLT

Speculative Investment Without Commercial Effect Of Borrowing Not A 'Financial Debt': NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi Bench-III, comprising Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member) have dismissed an application under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016, filed by M.K. Jain and family (Financial Creditors) against Krrish Realtech Pvt. Ltd. (Corporate Debtor) for default of Rs. 12.3 crore. The Tribunal held that the Applicant was a speculative investor and could not claim status and benefits as a 'financial creditor' under Explanation (i) of Section 5(8)(f) of the IBC as he was not interested in the financial well-being growth and vitality of the Corporate Debtor.

Submission Of Default Record Not Compulsory For Initiating CIRP: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai, consisting of Shri Sameer Kakar (Member - Technical) and Shri Nilesh Sharma (Member - Judicial), passed an order and admitted the Corporate Debtor into the CIRP under section 9 of the IBC. The tribunal addressed the issue of mandatory submission of the record of default from an information utility under Regulation 20(1A) of the IBBI (Information Utilities) Regulations, 2017. The bench held that furnishing the record of the default is not mandatory even after amendment of Regulation 20 by insertion of Regulation 20 (1A) of the IBBI (Information Utilities) Regulations.

Petition Filed U/S 9 Of IBC Based On Arbitral Award Cannot Be Entertained After 3 Yrs From Date Of Award: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Shri K. R. Saji Kumar (Judicial Member) and Shri Sanjiv Dutt (Technical Member) has held that an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code), based on an Arbitral Award passed in favor of the Operational Creditor, cannot be admitted after three years from the date of the Award, as per Article 137 of the Limitation Act, 1963 (Limitation Act) read with Section 238A of the Code.

Third Parties Who Sold Land To Corporate Debtor Cannot Be Held Liable U/S 66 Of IBC: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Justice Ashok Kumar Bhardwaj (Judicial Member) and Anil Raj Chellan (Technical Member) has held that third parties who sold land to the Corporate Debtor cannot be said to fall within the ambit of expression “any persons who were knowingly parties to the carrying on the business of the Corporate Debtor” as used in Section 66 of the Insolvency and Bankruptcy Code, 2016 (“Code”). It observed that an application under the Section may be maintainable against the persons who were responsible for the management of the Corporate Debtor.