NCLAT Once Dissolution Application Is Filed After Liquidation, Adjudicating Authority Has No Discretion :NCLAT Delhi Case Title: Sudhir Kumar Goel & Ors. v M/s Shashi Oils and Fats Pvt. Ltd. & Ors. Case No.: Company Appeal (AT) (Ins) No. 676 of 2021 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Rakesh Kumar (Judicial...
NCLAT
Case Title: Sudhir Kumar Goel & Ors. v M/s Shashi Oils and Fats Pvt. Ltd. & Ors.
Case No.: Company Appeal (AT) (Ins) No. 676 of 2021
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member), has held that once the liquidation process is complete and an application is filed by the liquidator for dissolution of the Corporate Debtor, the Adjudicating Authority has no option but to pass an order of dissolution. Equity though not applicable to Insolvency and Bankruptcy Code, 2016 ("IBC"), cannot come into play at this juncture.
Case Title: Somesh Choudhary v Knight Riders Sports Private Limited & Ors.
Case No.: Company Appeal (AT)(INS) No. 501 of 2021
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that claims arising out of grant of an exclusive right and license to use intellectual property rights falls within the ambit of the definition of 'Operational Debt'.
In this case, the 'Corporate Debtor' was permitted to use the trademark of 'KKR' in relation to its licensed products and hence we note that there was temporary transfer/permission to use, constituting 'provision of service' rendered by the first Respondent and therefore falls within the definition of service and any amounts 'due and payable' arising out of such service is an 'Operational Debt'.
Case Details: Jangsher Singh Choudhary v. Ram Kripal Singh Construction Pvt. ltd.
Case No.: Company Appeal (AT) (Ins) No. 739 of 2021
The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Rakesh Kumar and Dr. Alok Srivastava held that a time barred appeal against the decree filed after the issuance of demand notice under Section 8 of the Insolvency & Bankruptcy Code, 2016 will not amount to a pre-existing dispute.
Mobilization Advance Is An Operational Debt: NCLAT Delhi
Case Title: Athena Demwe Power Ltd. v Abir Infrastructure Private Limited & Ors.
Case No.: Company Appeal (AT) (Insolvency) No.158 of 2022
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that a mobilization advance given for mobilization of material and workforce is an operational debt.
Reliance was placed on the Supreme Court judgment in M/s. Consolidated Construction Consortium Limited Vs. M/s. Hitro Energy Solutions Private Limited, Civil Appeal No. 2839 of 2020, in which it was held that the words "in respect of" in Section 5(21) has to be interpreted in a broad and purposive manner, in order to include all those who provide or receive operational services from the corporate debtor, which ultimately lead to an operational debt.
Case Title: Mr. V R Ashok Rao v TDT Copper Limited
Case No.: Company Appeal (AT) (Insolvency) No. 780 of 2022
The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice N Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), has observed that issue of delay in refilling of appeal is often coming before the NCLAT Bench for consideration. Accordingly, the NCLAT Bench has referred the following question to a larger Bench: 'whether limitation for filing an Appeal before NCLAT also governs the period for curing defect in the Appeal and does NCLAT have jurisdiction to condone the delay in refilling of appeal if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013?'
Tribunal Cannot Interfere With Decision Of COC To Replace Resolution Professional :NCLAT Chennai
Case Title: M/s IDBI Bank Limited v C.J. Davis
Case No.: Company Appeal (AT) (CH) (Ins) No. 116 of 2022.
The National Company Law Appellate Tribunal ("NCLAT"), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mr. Kanthi Narahari (Technical Member), had set aside the Adjudicating Authority's order disallowing the Committee of Creditors ("CoC") to replace the Resolution Professional under Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016 ("IBC"). The Bench held that the commercial wisdom of CoC is paramount and can only be interfered by the Tribunal if the same is arbitrary, illegal, irrational and dehors the IBC and its Rules.
Litigation Of Government Is Not Looked After As It Should Be: NCLAT New Delhi
Case Detail: Rajasthan Drugs and Pharmaceuticals Ltd v. ATE Projects Pvt Ltd.
Case No.: Company Appeal (AT) (Ins) No. 1003 of 2021
The National Company Law Appellate Tribunal, New Delhi bench comprising of Justice Rakesh Jain and Dr. Alok Srivastava while dismissing an appeal filed by the Rajasthan Drugs and Pharmaceuticals Ltd. expressed its displeasure as to how the litigation of the Government is not looked after the way as it should have been. The Bench was hearing an appeal filed by the Rajasthan Drugs and Pharmaceuticals challenging the order dated 11.11.2021 of NCLT, Jaipur whereby Corporate Insolvency Resolution Process was initiated against it.
Case Details: Amit Jain v Siemens Financial Services Pvt Ltd.
Case No.: Company Appeal (AT) (Insolvency) No. 292 of 2022
The National Company Law Appellate Tribunal, New Delhi bench comprising of Justice Ashok Bhushan and Justice M Satyanarayan Murthy and Mr. Barun Mitra recently held that Section 10A of the Insolvency & Bankruptcy Code, 2016 is not applicable to proceedings against the personal guarantors under Section 95 of the Code.
"Had the legislature intended to prohibit filing of application under Section 95(1) by a creditor against the Personal Guarantor for any default committed on or after 25.03.2020, a provision akin to Section 10A could have very well be inserted in Chapter III Part III of the Code."
NCLAT concluded that the Section 10A is only capable of one interpretation which is the suspension of CIRP only for Corporate Debtor and not for the Personal Guarantor and accordingly, NCLAT dismissed the appeal filed by the Personal Guarantor.
NCLT
Insolvency Plea Against Kishore Biyani Led Future Enterprises Ltd., NCLT Mumbai Issues Notice
Case Title: Foresight Innovations Pvt. Ltd. v Future Enterprises Ltd.
Case No.: C.P.(IB)-513(MB)/2022
The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Shri H.V. Subba Rao (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), has issued notice to Future Enterprises Ltd. in a petition under Section 9 of the Insolvency and Bankruptcy Code, 2016 ("IBC") filed by Foresight Innovations Pvt. Ltd. for an alleged default of Rs. 1,58,78,942/-. In April 2022, Foresight Innovations Pvt. Ltd. had filed a petition under Section 9 of the IBC before NCLT, Mumbai Bench, seeking initiation of CIRP against FEL over an alleged default of Rs. 1,58,78,942/-.
Future Enterprises Ltd. ("FEL") is a part of the Mr. Kishore Biyani led Future Group of companies. While Future Retail Limited caters to the front end, FEL forms the backbone and links the retail arm with its infrastructure. FEL develops, owns and leases the retail infrastructure for the Future Group. Further, FEL also holds the Future Group's investments in subsidiaries and joint ventures including insurance, textile manufacturing, supply chain and logistics.
Case Title: Asset Reconstruction Company (India) Limited v GPT Steel Industries Ltd.
Case No.: CP (IB) No./157/AHM/NCLT/ 2018
The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Dr. Deepti Mukesh (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), has held that Adjudicating Authority has right to send back the resolution plan for reconsideration to the CoC, on a request made by the CoC in its commercial wisdom. Reliance was placed on NCLAT judgment in Bank of Maharashtra v Videocon Industries Ltd. & Ors., CA (AT) (Ins) No. 503 of 2021, wherein it was held that Adjudicating Authority is competent to send back a resolution plan to the CoC for re-consideration.
Investment Made By Director Of A Company Is Not An Operational Debt: NCLT Kolkata
Case Title: Akshat Pandey v Avighna Films Private Limited
Case No.: C.P. (IB) No. 178/KB/2021
The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rohit Kapoor ("Judicial Member") and Shri Harish Chander Suri (Technical Member), has held that an investment made by the Director of a Company does not fall under the purview of an Operational Debt under the IBC.
The Bench observed that under Section 5(21) of the IBC, an Operational Debt means a claim in respect of the provision of goods or services including employment or a debt in respect of the re-payment of dues arising under any law and payable to Government. Further, under Section 5(20) of the IBC an 'Operational Creditor' is a person to whom an Operational debt is owed and includes any person to whom such debt has been legally assigned or transferred. Based on the same, the Bench opined that Applicant is a director of the Corporate Debtor, who had invested money in the latter for production of a movie and an investment made by the Director of the Company does not fall under the purview of an Operational Debt under the IBC.
NCLT New Delhi Bench Re-Constituted, Matters To Be Heard Through Video Conferencing
The National Company Law Tribunal, New Delhi Bench, has been re-constituted vide a Circular dated 24.08.2022, issued by NCLT as per Section 419(3) of the Companies Act, 2013. The new NCLT New Delhi Bench shall comprise of:
NCLT New Delhi, Court Room No. 3 (Second Half)
- Shri Bachu Venkat Balaram Das (Judicial Member)
- Dr. Binod Kumar Sinha (Technical Member)
NCLT New Delhi, Court Room No. 4 (First Half)
- Shri Dharminder Singh (Judicial Member)
- Dr. Binod Kumar Sinha (Technical Member)
The Circular has been issued in partial modification of Order of even number dated 10.10.2021 and is applicable from 25.08.2022 till further orders. The reconstituted Bench shall take up matters through Video Conferencing.
NCLT Hyderabad Bench Re-Constituted,Matters To Be Heard Through Video Conferencing
The National Company Law Tribunal, Hyderabad Bench, has been re-constituted vide a Circular dated 24.08.2022, issued by NCLT as per Section 419(3) of the Companies Act, 2013. The new NCLT Hyderabad Bench shall comprise of:
NCLT Hyderabad, Court Room No. 2 (Second Half)
- Dr. Venkata Ramakrishna Badarinath Nandula(Judicial Member)
- Shri Veera Brahma Rao Arekapudi (Technical Member)
The Circular has been issued in partial modification of Order of even number dated 10.10.2021 and is applicable from 25.08.2022 till further orders. The reconstituted Bench shall take up matters through Video Conferencing.
IBBI
IBBI Suspends Deloitte Partner's IP Registration For 3 Years And Imposes Penalty
Case No.: No. IBBI/DC/124/2022
The Disciplinary Committee of the Insolvency and Bankruptcy Board of India ("IBBI") vide an order dated 18.08.2022 has suspended the registration of Insolvency Professional, Mr. Savan Godiawala, for a period of three years and has also imposed a penalty of amount equivalent to payments made to Deloitte Touche Tohmatsu India LLP after 23.07.2019 till now. Mr. Savan Godiawala is a Professional Member of Indian Institute of Insolvency Professionals of ICAI (IIIP-ICAI) and an Insolvency Professional (IP) registered with the IBBI. He is also a partner of the Deloitte Touche Tohmatsu India LLP ("Deloitte").
The Disciplinary Committee observed that contraventions in terms of wrongful withdrawal of fee and hiring of related party without proper identification of scope of work with wrong manner of determination of fee in case of Mr. Savan's dealings in respect of Lanco Infra Tech Limited and laxity in filling application on avoidance transaction in respect of Shirpur Power Pvt. Ltd. were established beyond doubt.