SUPREME COURT 'Breaches Discipline Of Law Laid Down In IBC' : Supreme Court Disapproves Of HC Deferring CIRP Under Article 226 Case Title: CoC of KSK Mahanadi Power Company Ltd. v. Uttar Pradesh Power Corporation Ltd. and Ors. Citation : 2024 LiveLaw (SC) 815 The Supreme Court recently took exception to the Telangana High Court ordering the deferring of the Corporate...
SUPREME COURT
'Breaches Discipline Of Law Laid Down In IBC' : Supreme Court Disapproves Of HC Deferring CIRP Under Article 226
Case Title: CoC of KSK Mahanadi Power Company Ltd. v. Uttar Pradesh Power Corporation Ltd. and Ors.
Citation : 2024 LiveLaw (SC) 815
The Supreme Court recently took exception to the Telangana High Court ordering the deferring of the Corporate Insolvency Resolution Process in the exercise of powers under Article 226 of the Constitution.
The Bench of Chief Justice of India DY Chandrachud , Justice J.B. Pardiwala and Justice Manoj Misra, held that the High Court was not justified in deferring the Corporate Insolvency Resolution Process (CIRP) when the main relief sought in the writ petition uto consolidate the CIRP of two companies was refused.
Supreme Court Sets Aside NCLAT Order Which Closed Insolvency Process Against Byju's Based On Settlement With BCCI
Case Details : GLAS TRUST COMPANY LLC Vs BYJU RAVEENDRAN | Diary No. - 35406/2024
Citation : 2024 LiveLaw (SC) 826
The Supreme Court today (October 23) set aside the order of the National Company Law Appellate Tribunal which closed the insolvency proceedings against ed-tech company Byju's (Think and Learn Pvt Ltd) accepting a settlement between it and the Board of Control for Cricket in India (BCCI) for about Rs 158 crores.
The Court held that the NCLAT erred in allowing the withdrawal of the insolvency application by invoking its inherent powers under Rule 11 of the NCLAT Rules 2016. When there is a specific procedure provided for the withdrawal of insolvency applications, the NCLAT cannot invoke its inherent powers.
IBC | No Compulsion To Specify Names Of Creditors In Balance Sheet, General Entry Acknowledging Debt Sufficient To Initiate CIRP : Supreme Court
Case Title: VIDYASAGAR PRASAD VERSUS UCO BANK & ANR.
Citation : 2024 LiveLaw (SC) 825
Observing that there's no compulsion for the companies to specify the names of every secured/unsecured creditor in their balance sheet, the Supreme Court dismissed the plea of a corporate debtor's suspended director against the initiation of Corporate Insolvency Resolution Process (“CIRP”).
In other words, the bench comprising Justices PS Narasimha and Sandeep Mehta observed that when debt entries exist in the corporate debtor's balance sheet, the debtor could not deny its liability merely on the ground that there were no specific entries of the particular creditor in their balance sheet regarding the debt owed to that creditor.
Inherent Powers Under Rule 11 of NCLT Rules Cannot Be Used To Circumvent Procedure To Withdraw CIRP Under S.12A IBC & R. 30A: Supreme Court
Case Title : GLAS TRUST COMPANY LLC Vs BYJU RAVEENDRAN | Diary No. - 35406/2024
Citation : 2024 LiveLaw (SC) 826
The Supreme Court Bench led by CJI DY Chandrachud comprising Justices JB Pardiwala and Manoj Misra held that 'inherent powers' cannot be used to subvert legal provisions, which exhaustively provide for a procedure. To permit the NCLAT to circumvent this detailed procedure by invoking its inherent powers under Rule 11 would run contrary to the carefully crafted procedure for withdrawal. In the Impugned Judgement, the NCLAT does not provide any reasons for deviating from this procedure or the urgency to approve the settlement without following the procedure.
HIGH COURT
Negotiable Instruments Proceeding Under Section 138 Does Not Abate On Initiation Of Insolvency Proceeding: Himachal Pradesh High Court
Case Title: Tushar Sharma v. State Bank of India
Case Reference: Cr. MMO No. 924 of 2023
It was held that while section 14 of the IBC imposes a moratorium on all the proceedings against the corporate debtor once the corporate debtor is admitted into insolvency. However, this does not absolve the directors and signatories to the dishonoured cheque from their personal liability under section 138 of the Negotiable Instrument Act. The Supreme Court observed as under:
“52 Thus, where the proceedings under Section 138 of the NI Act had already commenced and during the pendency the plan is approved or the company gets dissolved, the directors and the other accused cannot escape from their liability by citing its dissolution. What is dissolved is only the company, not the personal penal liability of the accused covered under Section 141 of the NI Act. They will have to continue to face the prosecution in view of the law laid down in Aneeta Hada v. Godfather Travels & Tours (P) Ltd., (2012) 5 SCC 661. Where the company continues to remain even at the end of the resolution process, the only consequence is that the erstwhile directors can no longer represent it”.
Adjudicating Authority Decides Fairness And Reasonableness While Approving Resolution Plan, High Court Cannot- Delhi High Court
Case Title: Gateway Investment Management Services Ltd. v. Reserve Bank of India and Ors.
Citation: 2024 LiveLaw (Del) 1092
In a significant judgement, the Delhi High Court affirmed the commercial wisdom of the committee of creditors (CoC). The case was pertaining to rejection of the resolution plan proposed by the petitioner despite offering the highest bid in e-auction in a Corporate Insolvency resolution Plan (CIRP) of Helio Photo Voltaic Pvt. Ltd. (Corporate Debtor).
The court held as under:
“12 Thus, the resolution plan decided by the CoC shall be put up for consideration before the Adjudicating Authority, which forum alone shall finally decide whether the CoC has performed its fiduciary duty as per the legislative mandate of the IBC”.
Himachal Pradesh High Court Affirms Clean Slate Theory, Declares Tax Authorities' Charge Over Properties After Acquisition Plan Void And Illegal
Case Title: Su-Kam Power System Ltd. and Anr.v.State of Himachal Pradesh and Ors.
Case Reference: CWP No.422 of 2024
In an important judgment delivered by the Himachal Pradesh High Court, the claims and red entries of the state tax department over the properties of Su-Kam Power Systems Ltd.(Corporate Debtor) were quashed. The corporate debtor was sold as a going concern under the provisions of the Insolvency and Bankruptcy Code (IBC). The court held that once the company was acquired and resolution plan was approved, all prior claims including claims of the tax authorities are extinguished.
The court rejected the argument that crown debt had priority over other debts. The court held as under:
“61 The plea of the respondents that the tax dues claimed by them will have priority as a “Crown Debt”, therefore, cannot be accepted, and their action in continuing the said red entry/charge on account of dues recoverable from erstwhile management of the Corporate Debtor under the Himachal Pradesh Value Added Tax Act, 2005, Himachal Pradesh Goods and Services Tax Act, 2017 and the CST Act, 1956, would be clearly illegal & arbitrary”.
Ruchi Soya (Patanjali) – Claim Not Included In Approved Resolution Plan Stand Extinguished : Karnataka High Court
Case Title: M/S Patanjali Foods Limited (Formerly Ruchi Soya Industries Limted) vs. Commissioner of Customs
Case No.: CSTA No. 4 of 2024
The Karnataka High Court division bench comprising Mr. Justice S.G. Pandit and Mr. Justice C.M. Poonacha has held that once a resolution plan is approved by the Adjudicating Authority under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), claims which are not included in the resolution plan are extinguished, and no further proceedings can be initiated against the corporate debtor in respect of such claims. The Court also clarified that Rule 22 of the Customs, Excise and Service Tax Appellate Tribunal (Procedure) Rules, 1982, which deals with abatement of appeal upon death, adjudication as insolvent or winding-up, does not apply when a resolution plan has been approved as the objective of a resolution plan is to continue the business of the company as “a going concern.”
All Claims Before Approval Of Resolution Plan Are Extinguished Once Plan Is Approved U/S 31 Of IBC: Orissa High Court
Case Title: Orissa Manganese & Minerals Ltd. v. State of Odisha and Ors.
Case Reference: W.P.(C) No. 1497 of 2024 with W.P. (C) No. 2304 of 2024 and W.P.(C) No. 2307 of 2024
The Orissa High Court Bench of Mr. Justice D.Dash and Mr. Justice V. Narasingh held that all liabilities of the corporate debtor prior to approval of resolution plan stand extinguished once the plan is approved under section 31 of the Insolvency and Bankruptcy Code (IBC). In this case, three writ petitions were filed against demand letters issued by the state (opposite parties) demanding statutory dues.
It was observed as under:
“No surprise claim should be flung on the Resolution Plan as the Resolution Plan provides the Corporate Debtor's business on a clean state to the successful Resolution Applicant. Further, the Resolution Applicant “should start with fresh slate on the basis of the Resolution Plan approved shunning its prior status as 'Corporate Debtor'.”
Bombay High Court Holds Redevelopment Rights of Society Not Part Of Moratorium Process; Issues Writ Of Mandamus For Redevelopment, Upholding Right to Shelter
Case Title: Kher Nagar Sukhsadan Co-operative Housing Society Ltd. v. State of Maharashtra & Ors.
Case Number: Writ Petition No. 3893 of 2024
The Bombay High Court division bench of Justices Kamal Khata and M.S. Sonak has held that if the developer fails to meet its obligations under the Development Agreement, such as paying transit rent and completing construction within the specified time frame, there is a complete failure of consideration, and no rights accrue to it. The court awarded a writ of mandamus for permissions and approvals for redevelopment. It observed that the uncertain outcome of a Corporate Insolvency Resolution Process (CIRP) shouldn't deprive individuals of their basic right to shelter.
Resolution Professional At S.94/95 Stage Cannot Decide On Maintainability Of Petition By Entering Into Merits: Karnataka High Court
Case Title: Buoyant Technology Constellations Pvt. Ltd. vs. Manyata Realty & Ors.
Case Reference: WRIT APPEAL NO.498 OF 2024 (GM-RES)
The Karnataka High Court Bench of Justice N.V. Anjaria and K.V. Aravind, held that the role of the Registrar while registering the application under Section 95 of the Insolvency and Bankruptcy Code (IBC) is not adjudicatory in nature and this duty of the Registrar, NCLT was in no way adjudicatory trapping. Application of judicial mind towards merits has no place in discharge of a ministerial or clerical function.
Bombay High Court Upholds Suspension Of Resolution Professional For Deficiency In Discharge Of Duties
Case Title: Vijendra Kumar Jain v. Insolvency & Bankruptcy Board of India (IBBI) & Anr.
Case Number: Writ Petition No. 12320 of 2024
The Bombay High Court bench of Justices A.S. Chandurkar and Rajesh S. Patil has upheld that the suspension order passed by the Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) against the Resolution Professional (RP) for lack of due diligence in verifying the Resolution Plan and non-intimation of the claims of an operational creditor.
All Claims Prior To Approval Of Resolution Plan Stand Extinguished U/S 31 Of IBC: Bombay High Court
Case Title: Maha Mineral Mining and Benefication Private v. Gram Panchayat, Gowari
Case Reference: 2024:BHC-NAG:11478-DB
The Bombay High Court Bench of Justices Bharati Dangre and Abhay J Mantri held that once the petitioner has acquired the assets of the corporate debtor, the claims, if any, which were not raised, stand extinguished and the respondent cannot now seek to recover those claims from the petitioner, who acquired the assets of the corporate debtor through auction process under the IBC.
NCLAT
NCLAT: Resolution Professional Can Only Entertain Claims Due As Of CIRP Commencement Date
Case Title: Gujarat Urja Vikas Nigam Limited vs. Mr. Udayraj Patwardhan
Case Number: Comp. App. (AT) (Ins.) No. 1183 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that any claims arising after the commencement of the Corporate Insolvency Resolution Process (CIRP) cannot be entertained by the Resolution Professional (RP).
The Tribunal held that:
“There is a clear law that Resolution Professional can only entertain claims due and filed w.r.t. CIRP commencement date and not due to subsequent event, for which claimant might have other legal remedy.”
Co-Borrower Shares Similar And Equal Responsibility Under Loan Agreement: NCLAT New Delhi
Case Title: Amit Narang v. Aditya Birla Finance Ltd. and Anr.
Case Reference: Company Appeal (AT) (Insolvency) No. 684 of 2024
The National Company Law Appellate Tribunal (NCLAT) Principal Bench, New Delhi comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) in an important judgment observed that initiation of Corporate Insolvency Resolution Process (CIRP) against a co-borrower is allowed under the Insolvency and Bankruptcy Code (IBC). In the present case, an appeal was filed by a suspended director of Narang Developers Pvt. Ltd. (NDPL) against decision of the National Company Law Tribunal (NCLT) Mumbai which admitted the NDPL into insolvency on an application filed by Aditya Birla Finance Ltd. (Financial Creditor) under section 7 of the IBC.
The NCLAT further observed that:
“The obligation of the Co-Borrower is co-extensive and coterminous with that of the Primary Borrower and hence a right or cause of action becomes available to the financial creditor to proceed against the primary borrower, as well as the Co-Borrower in equal measure in case they commit default in repayment of the amount of debt”.
Adjudicating Authority Can Extend Time Limit Of PPIRP Beyond 120 Days: NCLAT New Delhi
Case Title: Mr. Vikash Gautamchand Jain RP of Kethos Tiles Pvt. Ltd.
Case Reference: Company Appeal (AT) (Insolvency) No. 1173 of 2024 & I.A. No. 4190, 4191 of 2024 with Company Appeal (AT) (Insolvency) No. 1323 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), held that expiration of 120 days does not lead to automatic termination of Pre Packaged Insolvency Resolution Process (PPIRP) if sufficient cause is shown. In this case, PPIRP of the corporate debtor was initiated by M/s. Kethos Tiles Pvt. Ltd., an MSME, under section 54C of the Insolvency and Bankruptcy Code (IBC) and the National Company Law Tribunal (NCLT) had terminated the PPIRP when time period within which the entire process had to be completed, expired.
Resolution Applicants Can't Revise Offers Post Approval, CoC's 'Commercial Wisdom' Can't Be Faulted: NCLAT
Case Title: Vantage Point Asset Management Pte. vs. Ashish Arjunkumar Rathi & Anr.
Case Numbers: Company Appeal (AT) (Insolvency) No. 1619 & 1620 of 2024 with Company Appeal (AT) (Insolvency) No. 1621 & 1622 of 2024 with Company Appeal (AT) (Insolvency) No. 1696 & 1697 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) has observed that the 'commercial wisdom' of the Committee of Creditors (CoC), which did not approve a Resolution Plan, which had given the highest money, cannot be questioned. The Tribunal went on to observe that after approval of the Resolution Plan, no Resolution Applicant is entitled to raise its off
It noted clause 4.1.8 which stated, “the CoC is under no obligation to any of the Resolution Applicants … to approve a Resolution Plan which has scored the highest as per the Evaluation Criteria and any Resolution Plan shall be approved solely on the basis of the CoC's commercial wisdom.”
Assignee Stepping Into Shoes Of Assignor, Borrower Or Guarantor Cannot Challenge Such Assignment: NCLAT New Delhi
Case Title: Mr. Paresh Parekh v. Alchemist Asset Reconstruction Co. Ltd. and Anr.
Case Reference: Company Appeal (AT) (Insolvency) No. 1204 of 2024 with Company Appeal (AT) (Insolvency) No. 1205 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that personal guarantee can be invoked even if a put option has not been exercised. The Tribunal dismissed an appeal filed by Paresh Parekh and Manish Patel (personal guarantors) against an order passed by the NCLT in which insolvency proceedings under section 95 of the Insolvency and Bankruptcy Code.
The NCLAT further observed that SARFAESI Act allows the debt to be assigned to the Assets Reconstruction Companies and once the debt is assigned, assignee steps into the shoes of an original lender. Additionally, the deed of guarantee contained a clause to assign the debt itself therefore the arguments of the appellant cannot be accepted.
NCLAT Chennai Upholds Creditors Right To File For Bankruptcy Beyond Threshold Timeline U/S 118 Of IBC
Case Title: Tummala Sri Ganesh Vs. State Bank of India and Anr
Case Number: Company Appeal (AT) (CH) (Ins) No.315/2024
Recently, the NCLAT Chennai dismissed appeals filed by Tummala Sri Ganesh and other applicants. In this case, the issue was with respect to applicants who had furnished personal guarantees for the debt liabilities of Chadalvada Infratech Limited. The principal borrower had defaulted on the repayment of debt and CIRP was invoked in pursuance to which NCLT approved a repayment plan. However, the appellants, without completing the repayment process, made the RP file a report under Section 118 of IBC.
NCLAT held that Section 118 of the Insolvency and Bankruptcy Code provides that where an insolvency resolution plan contemplated under the IBC is not filed within the threshold timeline, its mere existence lapses even before the lapse of its natural duration; at which point the right of the creditor to file bankruptcy proceedings vests.
Limitation U/S 61 Of IBC Is To Be Calculated From Date Of E-Filing, Rules Prevalent When Application Is Considered To Be Applied: NCLAT New Delhi
Case Title: Shree Ganapati Power and Transformers. v. Vijeta Projects and Infrastructure Ltd. and Ors
Case Reference: Company Appeal (AT) (Ins.) No. 811 of 2022 & I.A. No. 5695 of 2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member), held that the period of limitation for appeal should be counted from the date of e-filing and not from the physical presentation. The tribunal condoned the delay of 3 days in filing the appeal as sufficient cause was shown and it was in accordance with the Standard Operating Procedure.
Obtaining Prior NOC From Stock Exchanges/SEBI Not Mandatory Before Submitting Scheme Of Arrangement For Company In Liquidation: NCLAT New Delhi
Case Title: Nikhil Jain and Ors.v. Anil Goel (Liquidator) and Anr.
Case Reference: Company Appeal (AT) No. 148 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Yogesh Khanna (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), observed that it is not mandatory to obtain No Objection Certificate (NOC) before submitting a scheme of arrangement to revive a company in liquidation under Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) under section 230 of the Companies Act.
Thus, under the Companies Act, there is no requirement for prior NOC from the stock exchanges or SEBI before the Scheme is filed before the Ld. NCLT, and the requirement is only to give notice to the stock exchanges and SEBI once the Scheme is filed with the Ld. NCLT for calling/dispensing with meetings of creditors and members, which has been duly complied with by the Liquidator / Applicant of the Scheme”.
Successful Resolution Applicant Entitled Benefit Of Protection U/S 32A IBC To Lift ED's Attachment Over Corporate Debtor's Assets: NCLAT New Delhi
Case Title: Vantage Point Asset Pte. Ltd.v.Gaurav Misra (RP)
Case Reference: Company Appeal (AT) (Insolvency) No. 1495 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), in a crucial judgment observed that the benefit of section 32A of the Insolvency and Bankruptcy Code (IBC) will be extended to the new management of the Alchemist Infra Reality Ltd.(corporate debtor) after the approval of resolution plan. In this case, the tribunal ordered to lift the proper
The Hon'ble Supreme Court has clearly held that Section 32-A has been engrafted in the legislation, which is a legislative scheme and if legislature thought that immunity be granted to the Corporate Debtor or its property, it hardly furnishes a ground for this Court to interfere. The extinguishment of the criminal liability of the Corporate Debtor is apparently important to the new management to make a clean break with the past and start on a clean slate”.
“Clean Slate" Principle Does Not Extend To Liabilities On Date Of E-Auction Sale Of Corporate Debtor As 'Going Concern': NCLAT
Case Name: Shantech International Pvt. Ltd. vs. Devendra Singh
Case No: Company Appeal (AT) (Insolvency) No. 1520 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical member) and Arun Baroka (Technical member) has held that when the claim itself are on the liquidation commencement date in the liquidation process, the argument that extinguishment of claims and liabilities should be granted till the date of sale by e-auction is not in accord with the statutory scheme as delineated by IBBI (Liquidation Process) Regulations, 2016.
[IBC] Pendency Of Civil Suit Doesn't Preclude Admission Of S. 7 Application When Debt & Default Are Proven: NCLAT
Case Title: Navin Chandra Mishra (Suspended Director of CMR Lifesciences Pvt. Ltd.) vs. Nand Kishore Palaha & Ors.
Case Number: Company Appeal (AT) (Insolvency) No. 1851 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Member Technical), Arun Baroka (Member Technical) has held that the pendency of the Civil Suit is no reason for not proceeding to admit the Section 7 Application when the debt and default are proved.
NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC
Case Title: Southern Power Distribution Company of Telangana Ltd. Vs. Kalvakolanu Murali Krishna Prasad RP for Vaksh Steels Pvt. Ltd. and Ors
Case Number: Company Appeal (AT) (CH) (Ins) No.177 /2021(IA Nos. 360 & 362 / 2021)
The National Company Law Appellate Tribunal (NCLAT), Chennai, comprising of Justice Sharad Kumar Sharma, Member (Judicial) and Shri Jatindranath Swain (Technical Member), dismissed an appeal under Section 61 of the Insolvency and Bankruptcy Code (IBC). The appeal was filed by the Southern Power Distribution Company of Telangana Ltd. against Kalvakolanu Murali Krishna Prasad (Resolution Professional for Vaksh Steels Pvt. Ltd.,). The NCLAT observed that the appellant cannot file an application for condonation of delay as it was duly aware of the proceedings well before the expiration of the time and as a result not acting within the prescribed time-period does not allow it to file for condonation of delay.
Case Title: Neon Laboratories Ltd. v. Mayank Shah and Anr.
Case Reference: Comp. App. (AT) (Ins) No. 1622 of 2023 & I.A. No. 5860, 5861 and 5862 of 2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member), held that petition under section 95 of the Insolvency and Bankruptcy Code (IBC) cannot be maintained if it is filed merely to scuttle the proceedings already initiated under section 9 of the Arbitration and Conciliation Act. In this case, an appeal was filed against the decision of the NCLT wherein a petition under section 95 of the Insolvency and Bankruptcy Code (IBC) was dismissed.
Set Off / Counter Claim Can Be Allowed At CIRP Admission Stage U/S 9 Of IBC: NCLAT New Delhi
Case Title: Khushbu Dye Chem Pvt. Ltd. v. Chemical Suppliers India Pvt. Ltd.
Case Reference: Company Appeal (AT) (Insolvency) No. 664 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that set off/Counter Claim can be claimed at the Corporate Insolvency Resolution Process (CIRP) admission stage. In this case, an appeal was filed against the decision of the NCLT wherein the petition under section 9 of the Insolvency and Bankruptcy Code (IBC) was dismissed.
Look-Back Period Can't Be Extended Beyond 2-Yr Limit U/S 43(4) Of IBC For Related-Party Transactions: NCLAT
Case Title: Sidharth Bharatbhushan Jain & Ors. vs. State Bank of India & Ors.
Case Number: COMPANY APPEAL (AT)(INS) NO. 242 OF 2024
The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that section 43 of the Insolvency and Bankruptcy Code (IBC) does not allow the extension of the look-back period beyond 2 years for related-party transactions.
Application U/S 65 Of IBC Can Be Considered Even Before Admission Of Insolvency Petition: NCLAT New Delhi
Case Title: Devashree Developers Pvt. Ltd. and Ors. v. Aravali Cylinders Pvt. Ltd.
Case Reference: Comp. App. (AT) (Ins) No. 1406 of 2023 & I.A. No. 5032 of 2023 with Comp. App. (AT) (Ins) No. 1430 of 2023 & I.A. No. 5118, 5119 of 2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member), held that an application under section 65 of the Insolvency and Bankruptcy Code (IBC) can be considered even before formal admission of the Corporate Insolvency Resolution Process (CIRP) petitions.
Unilateral Entries In Financial Records By Corporate Debtor To Make Counter Claim Cannot Be Considered: NCLAT New Delhi
Case Title: Mr. Kailash Motilal Kakrania and Anr. v. Apurva Oil and Industries Pvt. Ltd.
Case Reference: Company Appeal (AT) (Insolvency) No. 1257 of 2023 & I.A. No. 4433 of 2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), held that unilateral entries made in the financial records by the corporate debtor to make a counter claim cannot be considered. In this case, an appeal was filed against a decision of the NCLT in which a petition under section 7 of the Insolvency and Bankruptcy Code (IBC) was dismissed.
Assets Of Partnership Firm Not Property Of Personal Guarantor, Not Covered By Interim Moratorium Merely Because S.95 Application Was Filed: NCLAT New Delhi
Case Title: Ramesh Kumar Chugh v. Assets Care & Construction Enterprises Ltd.
Case Reference: Company Appeal (AT) (Insolvency) No. 1726 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that the assets held in the name of the partnership firm is not the personal property of the personal guarantor and cannot be subjected to the provisions of interim moratorium merely because a Section 95 application has been filed against a partner of the firm in respect of a personal guarantee given for a party other than the partnership firm.
After Lapse Of Extended Period Of 90 Days Of Insolvency Commencement Date, RP Not Obliged To Accept Any Claim: NCLAT New Delhi
Case Title: Commissioner of Income Tax (TDS-1), Mumbai v. Mr. Sundaresh Bhat (RP)
Case Reference: Company Appeal (AT) (Insolvency) No. 575 of 2023
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), held that after the lapse of extended period of 90 days of the insolvency commencement date, the RP is not obliged to accept any claim. The tribunal further held that the provisions of Income Tax Act do not create any charge or security interest in favour of the Appellant or provides any foundational basis for the Income Tax Department to be a secured Creditor.
NCLAT Permits Participation Of Erstwhile Promoter In CIRP Despite CoC's Disqualification, Cites Relaxation U/S 29A Of IBC
Case: Meir Commodities India Pvt. Ltd. v. Narayanam Nageswara Rao & Ors
Filing Number: Company Appeal (AT) (CH) (INS) No. 206 / 2024 (IA Nos. 563, 564 & 565 / 2024)
The National Company Law Appellate Tribunal (NCLAT) presided by Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain Member (Technical) dismissed an appeal filed by the Meir Commodities Pvt ltd, challenging the participation of promoter of NCS Sugar ltd in the Corporate Insolvency Resolution Process (CIRP).
The NCLAT upheld the decision of High Court of Telangana and state the respondent should not be termed as “wilful defaulter” and should be allowed to participate in the Resolution process. Also, the Respondent had previously engaged in negotiations with the CoC and the RP and had also revised his plan. Therefore, he had the right to challenge the procedure of application.
Litigant Who Does Not Apply For Certified Copy Cannot Claim Benefit Of Limitation Period If Delay Is Caused Due To Receipt Of Free Copy Of NCLT Order : NCLAT New Delhi
Case Title: Shakir v. Fruitful Buildcon Pvt. Ltd
Case Reference: Comp. App. (AT) (Ins) No. 1893 of 2024 & I.A. No. 6999 of 2024
The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) Barun Mitra (Technical Member) Arun Baroka (Technical Member), held that the litigant who does not apply for the certified copy cannot then fall back and claim that he was awaiting the grant of the free copy to obviate the bar of limitation. The limitation for filing the appeal commences from the date of order is pronounced and litigant has to be vigilant in applying the certified copy of the order.
NCLAT Delhi Closes CIRP Against Jaypee Healthcare Ltd After Full Settlement Of Financial Creditors' Claims
Case Title: Jaypee Infratech Ltd. v. Jaypee Healthcare Ltd. & Ors.
Case Number: Company Appeal (AT) (Insolvency) Nos. 1301, 1186, and 1296 of 2024
The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) has set aside the Corporate Insolvency Resolution Process (CIRP) initiated against Jaypee Healthcare Limited after the settlement amount was disbursed to financial creditors.
Any Claims Assessed After Liquidation Commencement Date Cannot Be Accepted By Liquidator: NCLAT New Delhi
Case Title: Assistance Provident Fund Commissioner (Legal), EPFO v. Chandra Prakash Jain (Liquidator)
Case Reference: Company Appeal (AT) (Insolvency) No. 1743 of 2024
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that when the claim has to be filed on the liquidation commencement date any claims subsequent including any on the basis of assessment subsequent to the liquidation commencement date cannot be given any credence by the liquidator.
NCLAT Upholds Central Govt's Takeover Of Delhi Gymkhana Club Over Allegations Of Mismanagement
Case Title: Major Atul Dev (Retd.) & Ors. vs. Union of India, Ministry of Corporate Affairs Through Regional Director (North Region) & Ors.
Case Number: Company Appeal (AT) No.93 of 2022 with Company Appeal (AT) No.141 of 2022
The NCLAT bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has upheld the NCLT's order which allowed the Central Government to take over the management of the Delhi Gymkhana Club, and directed the existing committee to take remedial steps and hold the election. The NCLAT held that Union of India's intervention in the affairs of the Delhi Gymkhana Club, which resulted in the erstwhile management of the Club being superseded by a 15-member general committee appointed by Union of India to take over the management of the club, was necessitated due to the rampant mismanagement by the erstwhile general committee.
Adjudicating Authority Can Recall Its Judgement But Has No Power To Review Unless Expressly Required: NCLAT New Delhi
Case Title: Aircastle (Ireland) Ltd. Vs. Mr. Ashish Chawchharia, RP of Jet Airways (India) Ltd. and Ors
Case Number: Comp. App. (AT) (Ins) No. 1178 of 2024
The NCLAT Delhi comprising of Justice Rakesh Kumar Jain (Member Judicial), Mr. Naresh Salecha (Member Technical) and Mr. Indevar Pandey (Member Technical) dismissed appeal filed by the Aircastle (Ireland) Ltd. (Appellant) who was aggrieved by the order of the Adjudicating authority. The Bench distinguished between Review Petition and Recall Petition and stated that the adjudicating authorities have the inherent powers to recall their orders but have no power to review the same.
Written Financial Contract Is Not A Pre-Condition For Proving Existence Of Debt U/S 5(8) Of IBC: NCLAT New Delhi
Case Title: Rahul H. Mehta v. Gajendra Investment Ltd. and Ors.
Case Reference: Company Appeal (AT) (Insolvency) No. 739 of 2022
The NCLAT New Delhi Bench of Justices Ashok Bhushan(chairperson) and Barun Mitra (Technical Member) held that it has been held that written financial contract is not a pre-condition or an exclusive requirement for proving existence of debt. It has been further amplified therein that the Application to Adjudicating Authority Rules, 2016 and CIRP Regulations makes it clear that financial debt can be proven from other relevant documents and it is not mandatory that written financial contract can be the only basis for proving the financial debt.
Payment Of Pre-CIRP Dues To Creditors Including Government Dues Cannot Be Made By RP Outside Resolution Framework: NCLAT New Delhi
Case Title: Avil Menezes v. Ministry of Coal and Ors.
Case Reference: Company Appeal (AT) (Insolvency) No. 944 of 2022
The NCLAT New Delhi Bench of Justices Ashok Bhushan, Barun Mitra] Member and Arun Baroka held that the assets of the Corporate Debtor are to be taken over by the Resolution Professions for resolution of the Corporate Debtor. The RP has to make every endeavour to protect and preserve the value of the property of the Corporate Debtor. Payment of pre-CIRP dues to creditors Including Government Dues cannot be made by RP outside the resolution framework.
Dissenting Financial Creditor Only Entitled To Liquidation Value Of Secured Interest U/S 30(2)(b) Of IBC, Commercial Wisdom Of CoC Sacrosanct: NCLAT
Case Title: Merina Commotrade Pvt. Ltd. vs. Anand Sonbhadra Resolution Professional for Shubhkamna Buildtech Pvt. Ltd. & Ors.
Case Number: Comp. App. (AT) (Ins) No. 1347 of 2022 & I.A. No. 4180 of 2022
The NCLAT, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member) has affirmed that as per Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, a dissenting financial creditor is only entitled to the liquidation value of its secured interest, not the total liquidation value of the Corporate Debtor. The Tribunal reiterated that the 'commercial wisdom' of the Committee of Creditors (CoC) is paramount and cannot be interfered with unless similarly situated creditors are denied fair and equitable treatment.
Payment Of Lease Amount, Lease Rent And Premium Cannot Be Considered As CIRP Costs; Not Recoverable U/S 14 Of IBC: NCLAT New Delhi
Case Title: Sunil Kumar Agarwal & Anr v. Anand Sonbhadra Resolution Professional of Shubhkamna Buildtech Pvt. Ltd. & Ors
Case Reference: Comp. App. (AT) (Ins) No. 1351 of 2022 & I.A. No. 4196, 4197, 4666, 4731 of 2022 & 1500 of 2023
The NCLAT New Delhi Bench of Justices Rakesh Kumar Jain and Indevar Pandey held that the payment of lease amount, lease rent and premium arising during CIRP cannot be considered as CIRP costs. Therefore, they cannot be claimed in view of section 14 of the IBC which prohibits any recovery of the property of the corporate debtor during the CIRP.
NCLAT Dismisses Travel Agents Association Of India's Allegations Of Anti-Competitive Practices Against Union Govt's Dept Of Expenditure
Case Title: Travel Agents Association of India vs. Competition Commission of India & Ors.
Case Number: Competition App. (AT) No. 26 of 2020
The NCLAT, New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the Department of Expenditure, Government of India does not qualify as an "enterprise" under Section 2(h) of the Competition Act, 2002, being a “consumer” of air ticketing services.
Development Rights Are Fully Covered By Definition Of "Property" U/S 3(27) Of IBC: NCLAT New Delhi
Case Title: Nilesh Sharma Resolution Professional - Today Homes and Infrastructure Pvt. Ltd. Vs. Mordhwaj Singh & Ors
Case Reference: Company Appeal (AT) (Insolvency) No. 331 of 2024 & I.A. No. 1127 of 2024, Company Appeal (AT) (Insolvency) No. 336 of 2024 and Company Appeal (AT) (Insolvency) No. 337 of 2024
The NCLAT New Delhi Bench of Justices Ashok Bhushan (Chairperson) Barun Mitra (Technical Member) held that it is no more res integra, that the Development Rights are Rights which can be claimed by a Developer in assets. Development Rights are also fully covered by the definition of Property under Section 3(27) of the IBC.
Ineligibility Of Successful Resolution Applicant U/S 29A Of IBC Has To Be Seen On Date Of Submission Of Resolution Plan: NCLAT New Delhi
Case Title: Ashish Singh, Resolution Professional for Vibrant Buildwell Pvt. Ltd. v. Raj Kumar Sahani & Ors.
Case Reference: Company Appeal (AT) (Insolvency) No. 253-254 of 2024
The NCLAT New Delhi Bench of Justices Ashok Bhushan and Barun Mitra held that the eligibility/ineligibility of Successful Resolution Applicant under section 29A of the Insolvency and Bankruptcy Code (IBC) has to be seen on the date of submission of Resolution Plan.
Dissolution Of Corporate Debtor Can Be Sought U/S 54 Of IBC Only After Complete Liquidation: NCLAT
Case Title: Janak Jagjivan Shah Resolution Professional v. Committee of Creditors Rainbow Infrabuild Pvt. Ltd.
Case Reference: Company Appeal (AT) (Insolvency) No.1406 of 2024
The NCLAT New Delhi Bench of Justices Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) held that the scheme of the IBC clearly provides that dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. In the present case, the liquidation proceedings have not been undertaken and resorting to Section 54 for dissolution could not have been taken as per the scheme of the IBC.
Time-Period U/S 61 Of IBC Cannot Be Extended On Ground Of S.14 Of Limitation Act: NCLAT
Case Title: Hero Exports v. Mr. K. Vasudevan.
Case Reference: IA No. 2830-2831/2020 & IA No. 3019-3020/2020 TA (AT) No.254 & 255 / 2021 (Company Appeal (AT) (Ins) Nos.1048 & 1049/2020) IA No. 2826-2827/2020 &IA No.2828-2829/2020
The NCLAT Chennai Bench of Justices Justice Sharad Kumar Sharma and Jatindranath Swain held that the provisions contained under Section 14 of the Limitation Act will not be a recourse available to the appellant, owing to the fact that Section 61 of the IBC, since being a self-contained provision dealing with the principles of Limitation prescribes an upper limit within which an Appeal has to be filed and that cannot be extended under any circumstances even by this Appellate Tribunal.
Limitation Period U/S 61 Commences From Pronouncement Of Order And Not On Uploading Date Of Order: NCLAT New Delhi
Case Title: Tarandeep Kaur Ahluwalia and Ors. Vs. One City Infrastructure Pvt. Ltd. and Ors
Case Number: Comp. App. (AT) (Ins) No. 1898 of 2024 & I.A. No. 7020, 7024 of 2024
The National Company Law Appellate Tribunal (NCLAT) Principal Bench, New Delhi, comprising of Justice Rakesh Kumar Jain, Mr. Barun Mitra (Member Technical) and Mr. Naresh Salecha (Member Technical), disposed two applications filed by the appellant seeking condonation of one-day delay in filing their appeal against the order of the National Company Law Tribunal (NCLT).
Examining The Interplay Between Sections 29A And 240A Of IBC: Clarifying The Status Of MSMEs Within Insolvency Resolution Framework
The NCLAT in a recent decision titled Ashish Singh, Resolution Professional forVibrant Buildwell Pvt. Ltd. v. Raj Kumar Sahani & Ors (Company Appeal (AT) (Insolvency)No. 253-254 of 2024) observed that under section 240A of the IBC, the date of submission of the resolution plan has to be seen to assess whether ineligibility under section 29A of the IBC is triggered. In this case, the tribunal extended the benefit of section 240A of the Insolvency and Bankruptcy Code, 2016 to the corporate debtor even though the MSME registration had been secured after the commencement of the CIRP.
NCLAT Upholds Approved Resolution Plan For M/S Adico Forge Pvt Ltd Which Secured Workers' Provident Fund And Gratuity Dues In Full
Case Title: Audico Forge Kamgar Sangathana v. CA Ramchandra Dallaram Choudhary & Ors.
Case Number: Company Appeal (AT) (Insolvency) No.1645 of 2024
The NCLAT bench of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has reiterated that the jurisdiction of the NCLT and NCLAT while considering the Plan approved by the CoC is limited. The Tribunal ruled that dues that were previously admitted in the Resolution Plan and paid in full cannot be raised again.
Once Debt And Default Satisfied, Petition U/S 7 Of IBC Has To Be Admitted, Vidharbha Ruling Cannot Be Applied Mechanically: NCLAT
Case Title: Canara Bank v. GTL Limited
Case Reference: Company Appeal (AT) (Ins) No. 69 of 2023 & I.A. No. 274, 275 of 2023
The NCLAT New Delhi Bench of Justices Mr. Rakesh Kumar Jain, Mr. Naresh Salecha and Mr. Indevar Pandey affirmed that a petition under section 7 of the IBC cannot be rejected merely on the ground that there are chances of the amount being recovered from other proceedings which will satisfy the entire debt of the creditors. The tribunal further observed that the ratio of the Vidharbha ruling cannot be applied mechanically without satisfying itself as to whether the amount equal or more than the debt amount due to the creditors will in fact be recovered from such other proceedings.
Lease Rent/Damages Subsequent To Commencement Of CIRP Cannot Be Treated As CIRP Cost: NCLAT
Case Title: Mr. A. Guhan and Anr. V. Ms. Sunita Umesh
Case Reference: Company Appeal (AT) (Insolvency) No. 1095 of 2023 & I.A. No. 3782 of 2023
The NCLAT New Delhi Bench of Justices Ashok Bhushan and Barun Mitra held that lease rent/damages due to the corporate debtor after the commencement of the CIRP cannot be considered as CIRP cost that too when an arbitral award with respect to the same amount had already been secured which could not be executed due to moratorium under section 14 of the IBC.
NCLT
Petition Under Section 95 Not Maintainable Against Partnership Firms: NCLT Hyderabad
Case Title: Union Bank of India v. M/s. K M R Enterprises and Anr.
Case Reference: CP (IB) No. 66/95/HDB/2024
The National Company Law Tribunal (NCLT) Hyderabad in an important judgment clarified that partnership firms do not fall under section 95 of the Insolvency and Bankruptcy Code (IBC). The tribunal dismissed a petition filed by Union Bank of India (Financial Creditor) under section 95 of the IBC against KMR Enterprises (Respondent).
The tribunal observed as under:
“To answer the question as to who can be called as personal guarantor, we use fully refer to section 5(22) of IBC, 2016 which defines Personal Guarantor as an individual who is the surety in a contract of guarantee to a Corporate Debtor. It is important to note that partnership firm was not included under the definition of Personal Guarantor”.
Moratorium Can't Be AShield To Defeat Legitimate Claims Of The Creditors: NCLT Chandigarh
Case Title: Punjab National Bank and Anr v. Mohita Indrayan
Case Reference: IA No. 2727/2023, IA No. 2974/2023 & CP (IB) No. 158/Chd/Hry/2023
The National Company Law Tribunal (NCLT), Chandigarh Bench, comprising Shri Harnam Singh Thakur (Judicial Member) and Shri Ashish Kumar Verma (Technical Member), admitted an insolvency petition under section 95 of the Insolvency and Bankruptcy Code (IBC) against Ms. Mohita Indrayan, a personal guarantor, for the debts of M/s Indian Clothing League Private Limited (corporate debtor). This petition was filed by Punjab National Bank along with Indian bank (banks). The NCLT observed that despite a petition under section 94 of the IBC filed by the personal guarantor, no further steps were taken to proceed with the case therefore benefit of interim moratorium under section 96 of the IBC could not be given.
NCLT Hyderabad Declares Stock Brokers As Financial Service Provider, Petition Under Section 9 Not Maintainable
Case Title: Kapston Facilities Management Ltd.v.Karvy Stock Broking Ltd.
Case Reference: CP (IB) No.332/9/HDB/2021
The National Company Law Tribunal Hyderabad Bench, comprising Shri Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member) dismissed insolvency petition filed against Karvy Stock Broking Ltd. (Corporate Debtor/Respondent) by Kapston Facilities Management Ltd. (Operational Creditor) under section 9 of the Insolvency and Bankruptcy Code (IBC). The NCLT held that the respondent is a financial service provider against whom no Corporate Insolvency Resolution Process (CIRP) can be initiated.
The Tribunal held as under:
“However, the financial service provider is not included in the definition of corporate person and accordingly an application cannot be filed for initiation of CIRP against the financial service provider. Here, we may also profitably refer to the decision of Hon'ble NCLAT in Globe Capital Market Ltd. vs. Narayan Securities Ltd. Company Appeal (AT) (Insolvency) No.32 of 2024 & I.A No. 62 of 2024”.
Case Title: Amogh Industrial Products Vs. Mirchi Developers Pvt. Ltd
Case Number: CP(IB) No. 103/9/HDB/2024 u/s. 9 of IBC, 2016
NCLT Hyderabad in its judgement of Amogh Industrial Products Vs. Mirchi Developers Pvt. Ltd dismissed a Section 9 application filed under the Insolvency and Bankruptcy Code, 2016 by Amogh Industrial Products (Operational Creditors) praying to initiate a Corporate Insolvency Resolution Process (CIRP) against Mirchi Developers Pvt ltd, due to the failure in compliance with Section 69(2) of Indian Partnership Act, 1932.
A firm shall be registered under Section 69(2) of the Indian Partnership Act, 1932, to file a petition for the enforcement of rights under contract. In addition, the petitioners did not produce the register of firms showing the names of its partners.
Related Party Prohibited From Participating In CoC, Cannot Overcome Bar Merely By Assignment Of Debt: NCLT Mumbai
Case Title: Greenshift Initiatives Pvt. Ltd.v.Sonu Gupta (RP)
Case Reference: I.A. 331 of 2024 in C.P.(IB) No. 1122/MB/2021
The National Company Law Tribunal (NCLT), Mumbai Bench , comprising Ms. Reeta Kohli (Judicial Member) and Ms. Madhu Sinha (Technical Member), dismissed an application in which voting rights in the committee of creditors (CoC) was sought in the Corporate Insolvency Resolution Process (CIRP) of Rolta Bi & Big Data Analytics Pvt. Ltd. (corporate debtor). Greenshift Initiatives Private Limited (Assignee) who acquired the debt from a related party of the corporate debtor, filed this application. The
Thus, it is evident that firstly the bar is because of the relationship of the parties and secondly the bar is on the person who's holding the debt and not the nature of the debt per-se. That is precisely the reason why the RP has in fact admitted the debt but not allowed the Applicant to be a member of CoC which seems to be justifiable in view of the objective of the law”.
Corporate Debtor Not Responsible For Non-Supply Of Materials By Third Party Being An Agent: Mumbai NCLT
Case Title: Rajendra Kedia (J.M. Steels) vs. Nirav Metals Pvt. Ltd.
Case Reference: CP (IB) No. 186/MB/2024
In a crucial decision, the National Company Law Tribunal (NCLT) Mumbai Bench, comprising Justice V.G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member), dismissed a petition filed by JM Steels (Operational Creditor) under section 9 of the Insolvency and Bankruptcy Code (IBC) against Nirav Metals Pvt. Ltd. (Corporate Debtor). The petition sought to initiate Corporate Insolvency Resolution Process (CIRP) for the default of Rs. 3,63,07,924.89 against the corporate debtor for non-supply of goods.
Interest Cannot Be Raised Unilaterally In Insolvency Petition, Without Prior Intimation To Corporate Debtor: NCLT Bengaluru
Case Title: Janus GBAC Ltd. v. Beloorbayir Biotech Ltd.
Case Reference: CP (IB) No.114/BB/2023
The National Company Law Tribunal (NCLT), Bengaluru, comprising Shri K. Biswal (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member), dismissed a petition under section 9 of the Insolvency and Bankruptcy Code (IBC). The petition was filed by Janus GBAC Ltd. (operational creditor) against Beloorbayir Biotech Ltd. (corporate debtor). The NCLT observed that no interest can be claimed in the petition when it has not been agreed upon in an agreement.
Resolution Professional Becomes Functus Officio After Approval Of Plan, Ceases To Have Authority To File Fresh Application Under IBC: NCLT Mumbai
Case Title: Mr. Ram Ratan Kanoongo v. Mr. Pramod Goenka and Ors.
Case Reference: M.A. 1548 of 2019 in T.P. (IB) 600/MB/2017
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Justice (Retd) Mr. Virendrasingh Gyansingh Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member), observed that Resolution Professional (RP) is not empowered to file an application after the approval of resolution plan. The Tribunal further held that Insolvency and Bankruptcy Board of India (IBBI) should investigate into the conduct of both the RP and respondent 1 to 3 based on the findings of the forensic auditor.
Without Allegations Of Fraud, Objections Raised By Applicant Cannot Be Entertained At Belated Stage After Sale Has Already Been Confirmed: NCLT
Case Title: JSK Estate Pvt. Ltd. v. Mr. Sundaresh Bhat (Liquidator) and Anr.
Case Reference: I.A. No. 5330/2023 in CP(IB) No. 2849(MB)/2018
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), dismissed an application filed under section 60(5) of the Insolvency and Bankruptcy Code (IBC) by a prospective bidder in which e-auction sale of the corporate debtor in liquidation was challenged. The Tribunal observed that the sale was conducted in accordance with Liquidation Regulations, 2016 and objections raised by the applicant were belated and without merit.
Ex-Management Of Corporate Debtor Cannot File Proposal U/S 12A During Consideration Of Resolution Plan When Earlier Proposal Was Rejected: NCLT New Delhi
Case Title: Pratham Expofab Pvt. Ltd. and Anr. v. Anil Matta (RP) and Anr.
Case Reference: I.A. – 188/2024 in C.P.(IB)-995 of 2018
The National Company Law Tribunal, New Delhi Bench, comprising Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), held that settlement proposal under section 12A of the Insolvency and Bankruptcy Code (IBC) cannot be considered after the approval of resolution plan. The Tribunal further held that multiple such proposals had already been proposed on previous occasions and all of them were rejected by Committee of creditors (CoC).
Recovery Of Corporate Debtor's Property By Owner/Landlord Is Not Permissible During Moratorium Period: NCLT Mumbai
Case Title: Sudha Apparels Ltd. v. Mr. Ravi Sethia (RP)
Case Reference: Interlocutory Application No. 4147 of 2023 and Intervention Petition No. 27 of 2024 in CP(IB) No. 959(MB)/2022
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), held that the owner or lessor of the property occupied by the corporate debtor is not entitled to the possession during Corporate Insolvency Resolution Process (CIRP). An application under section 60(5) of the Insolvency and Bankruptcy Code (IBC) was filed by Sudha Apparels Limited (applicant) seeking possession of the property and rent amount.
Cannot Interfere With Liquidator's Rejection Of Claims Which Are Tentative, Contingent Or Potential: NCLT Hyderabad
Case Title: Meja Urja Nigam Pvt. Ltd. v. Mr. Sutanu Sinha (Liquidator)
Case Reference: I.A. No.550 of 2021 in C.P. (IB) No. 294/7/HDB/2017
The National Company Law Tribunal (NCLT), Hyderabad Bench, comprising Shri Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member), observed that the Liquidator is responsible for determining the actual dues to be paid from the proceeds of liquidation. Consequently, claims must pertain to specific payable amounts—whether fixed or variable, disputed or undisputed, legal or equitable, secured or unsecured, or arising from a judgment—rather than assumed, uncertain, or hypothetical.
Secured Creditor Not Precluded From Filing Petition U/S 95 Of IBC, Even If Security Interest In Mortgaged Property Is Enforced: NCLT Mumbai
Case Title: YES Bank Ltd. v. Mrs. Sakshi Jiwarajka
Case Reference: CP (IB) No. 906/MB/2022 and I.A. No. 3244 of 2024
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), held that merely because a secured creditor has taken action to realise/enforce its security interest in the mortgaged property, the secured creditor is not precluded from initiating insolvency resolution process of the Personal Guarantor unless of course the debt is recovered in full.
Pre-Existing Dispute Does Not Bar Operational Creditor From Filing S.9 Application: NCLT Admits CIRP Against Syska LED
Case Title: Sunstar Industries Vs. Syska Led Lights Pvt. Ltd
Case Number: CP (IB)/96/MB/2024
he National Company Law Tribunal Mumbai Bench, Court-II, comprising of Justice Kuldip Kumar Kareer (Member Judicial) and Anil Raj Chellan (Member Technical), admitted a Section 9 petition filed by operational creditor (Sunstar Industries) against the Corporate Debtor (Syska LED Lights Pvt. Ltd) stating that initiation of proceedings before the Micro, Small and Medium Enterprise Facilitation Council (MSEFC) in Delhi, and a complaint under Section 138 of the Negotiable Instruments Act, 1881 did not preclude it from filing a Section 9 application under the Insolvency and Bankruptcy Code, 2016.
Raising Funds Through Share Subscription-Cum-Shareholders Agreement Is Financial Debt, Plea U/S 7 Of IBC Maintainable: NCLT
Case Title: Spectrum Trimpex Pvt. Ltd. v. VPhrase Analytics Solutions Pvt. Ltd.
Case Reference: CP (IB) 249/MB/2024
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), held that money raised through a share and subscription agreement in which an exit window with stipulated return is provided will constitute a financial debt for which a petition under section 7 of the Insolvency and Bankruptcy Code (IBC) can be filed. However, in this case, the petition was dismissed as debt amount failed to meet the threshold limit provided under section 4 of the IBC.
Order U/S 45A Of ESI Act Cannot Be Passed During Moratorium Period U/S 14 Of IBC: NCLT Allahabad
Case Title: Saurabh Chawla v. Employee State Insurance Corporation
Case Reference: IA No. 438/2023 in CP (IB) No. 81/ALD/2019
The National Company Law Tribunal, Allahabad Bench, comprising Shri Praveen Kumar Gupta (Judicial Member) and Shri Ashish Kumar Verma (Technical Member), held that proceedings under ESI Act cannot be initiated after admission of the corporate debtor into insolvency. In this case, an order passed by ESI authority was challenged by Resolution Professional (RP) in which the authority claimed unpaid contribution towards state insurance.
Authorised Officer Of Financial Creditor Can Also File Petition U/S 7 Of IBC: NCLT Mumbai
Case Title: Avendus Finance Private Limited v. Acute Retail Infra Private Limited
Case Reference: C.P. (IB)/913(MB)2023
The National Company Law Tribunal (NCLT), Mumbai Bench, Court V, comprising Ms. Reeta Kohli, Hon'ble Member (Judicial) Ms. Madhu Sinha, Hon'ble Member (Technical), held that general authorization given to an officer of the Financial Creditor by means of a power of attorney, would not disentitle such officer to act as the authorized representative of the Financial Creditor while filing an application under Section 7 of the Insolvency and Bankruptcy Code (IBC). In this case, a petition under section 7 of the IBC was filed.
Non-Obtaining Of NOC From Applicant Does Not Ipso Facto Invalidate Security Documents Executed In Favour Of Respondents: NCLT Mumbai
Case Title: Bank of Baroda v. Mr. Ajit Kumar and Ors.
Case Reference: IA No. 3/2024 ,CP (IB) 1738/MB/ of 2017
The National Company Law Tribunal, Mumbai Bench, comprising Anil Raj Chellan Kuldip Kumar Kareer (Member Technical) (Member Judicial), held that non-obtaining of NOC from the Applicant does not ipso facto invalidate the security documents executed in favour of Respondents.
Right To Replace Resolution Professional Not Provided To Operational Creditor, Only CoC Can Replace RP: NCLT Chennai
Case Title: Giriraj Enterprises v. State Bank of India and Anr.
Case Reference: IA/1693/2024 IN IA(IBC)/1512/CHE/2024 IN IBA NO.1099 OF 2019
The National Company Law Tribunal (NCLT), Chennai Bench, comprising Ravichandran Ramasamy, Jyoti Kumar Tripthi, Member Technical Member (Judicial) ,held that on reading of section 27 of the Insolvency and Bankruptcy Code (IBC), it is clear that the right of replacement of RP is not provided to the operational creditor and necessary party required for adjudication will be heard in lines of Principle of Natural justice.
Case Title: Vijayalaxmi Developers and Anr.
Case Reference: IP. No. 28/2024 in C.P.(IB) No. 336/MB/C-II/2024
The National Company Law Tribunal, Mumbai Bench of justice of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member) held that no third party can be allowed to participate in the pre admission stage of a petition under section 7 of the Insolvency and Bankruptcy Code (IBC).
Expressions Of Interest Submitted After CIRP Due Date Cannot Be Considered: NCLT Mumbai
Case Title: Mr Vikram Venkatrao Gaikwad v. Mr. Jitendra Palande
Case Reference: IA. No. 3106/2024 In C.P.(IB)/1132(MB)/2023
The National Company Law Tribunal, Mumbai Bench of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member) held that no Expressions of Interest (EOIs) can be considered if they are submitted after the due date as provided under regulation 36A of the CIRP Regulations.
Date Of Default Occurring Within Prohibited Period U/S 10A Of IBC Can't Be Shifted By Sending Notice After Prohibited Period For Same Debt: NCLT Mumbai
Case Title: - REC LIMITED v. GLOBAL METAL & ENERGY PRIVATE LIMITED
Case Reference: CP (IB) No.956/MB/2023
The National Company Law Tribunal, Mumbai Bench of Hon'ble Shri K. R. Saji kumar, (Judicial Member) Hon'ble Shri Sanjiv Dutt, (Technical Member) held that the date of default occurring within the prohibited period cannot be shifted merely because a notice for payment is issued again after the end of such prohibited period.
Uncorroborated Allegations Pertaining To Pre-Existing Dispute Cannot Be Entertained: NCLT Admits Petition U/S 9 Of IBC
Case Title:M/s Rishabh Triexim LLP v. M/s Nandi Irrigation Systems Limited
Case Reference:CP (IB) No. 22/09/HDB/2023 & IA No. 1712 of 2023
The National Company law Tribunal (NCLT) Hyderabad Bench of Justices Rajeev Bhardwaj and Sanjay Puri admitted M/s Nandi Irrigation Systems Limited (Corporate Debtor) into Corporate Insolvency Resolution Process (CIRP) on an application made by M/s Rishabh Triexim LLP (Operational Creditor) under section 9 of the Insolvency and Bankruptcy Code (IBC). This case arises due to the default made by the corporate debtor in paying the operational debt amounting to Rs. 11.32 crores which was to be paid on November 30, 2022.
Banks Have Inherent Power To Classify Account Of Personal Guarantor As NPA During Moratorium Period: NCLT New Delhi
Case Title: Central Bank of India vs Kushan Mitra
Case Number: IA-3290/2024
The NCLT, Delhi comprising of Justice Bachu Venkat Balaram Das, Member (Judicial) and Justice Atul Chaturvedi (Technical Member), accepted a Section 95 application filed by the applicant bank to initiate Corporate Insolvency Resolution Process (CIRP) against the Personal Guarantor of M/s CMYK Printech Limited.
Any Claimed/Unclaimed Dues Prior To Approval Date Of Resolution Plan Stand Extinguished: NCLT Kolkata
Case Title: Gandhamardhan Sponge Industries Pvt. Ltd. vs. Income Tax Department and Anr.
Case Number: I.A. (I.B.) No. 880/KB/2024 in C.P. (I.B.) No. 180/KB/2024
The National Company Law Tribunal (NCLT), Kolkata bench of Smt. Bidisha Banerjee (Judicial Member) and Shri D. Arvind (Technical Member) have held that the income tax notice, demand notice and payment for past dues that accrued prior to the date of the Resolution Plan against the corporate debtor is null and void. It observed, “It is a well-established law that the corporate debtor was come out of insolvency resolution process by way of successful resolution of its insolvency cannot be settled with past dues as the successful resolution applicant takes over the corporate debtor on a fresh slate principal and assets as such, any dues claimed/unclaimed for the period up to the date of approval of the resolution plan stands extinguished…”
Constitution Of CoC In Violation Of Section 21(2) Proviso Of IBC Is Nullity In Eyes Of Law, Vitiates Entire CIRP: NCLT
Case Title: Mr. Vipin Kumar Sharma v. Mr. Sunit Suri and Ors.
Case Reference: I.A. No.851 of 2023