NCLT Has Power To Recall Its Order: NCLAT

Case Title: Printland Digital (India) Pvt. Ltd. v Nirmal Trading Company

Case No.: Company Appeal (AT) (Insolvency) No. 504 of 2022

The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Alok Srivastva (Technical Member) recently held that the National Company Law Tribunal has the power to recall its order of closing the right to file reply. It was observed that there is a difference between recalling an order and review of an order where an issue is decided on merit by the Tribunal. "No doubt that the Adjudicating Authority has no jurisdiction to review its order after deciding a substantial issue but it has the jurisdiction to recall the order of the kind in dispute i.e., where the right to Reply was closed by an order on the ground that the opportunities granted were not availed." The order was passed on 30.05.2022.

NCLAT Terminates The CIRP Of Kanoria Sugar & General Manufacturing Co. Ltd., As Parties Enter Settlement

Case Title: Kanoria Sugar and General Manufacturing Co. Ltd. v Punjab National Bank

Case No.: Company Appeal (AT) (Ins.) No. 548 of 2022.

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), has terminated the Corporate Insolvency Resolution Process ("CIRP") of Kanoria Sugar and General Manufacturing Co. Ltd. ("Appellant"), which was initiated by NCLT vide an order dated 27.04.2022. A settlement was arrived at between the parties and a One Time Settlement (OTS) proposal dated 31.05.2022 was accepted by the Respondent Bank for an amount of Rs. 40 Crores. A joint application bearing I.A. No. 1782 of 2022 was filed by both the parties to bring the settlement on record. The NCLAT permitted the Respondent Bank to withdraw the Section 7 petition in view of settlement and the CIRP was terminated against the Appellant. The order was passed on 03.06.2022.

NCLAT Set Asides Insolvency Process Against HCL

Case Title: C Vijay Kumar v Sahaj Bharti Travels

Case No.: Company Appeal (AT) (Insolvency) No. 58 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan, Ms. Shreesha Merla and Mr. Naresh Salecha allowed the appeal filed by the suspended director of HCL Technologies (HCL) and set aside the Corporate Insolvency Resolution Process (CIRP) initiated against the HCL. NCLAT held that merely having a remedy under Arbitration and Conciliation Act, 1996 is a not a ground to deny relief under IBC but it has to be considered that IBC proceedings should not be converted into debt recovery proceedings.

The Bench observed that HCL is a globally renowned business entity and the Balance Sheet of HCL for the financial year ending on 31.03.2018 reflects a turnover of INR 61,786 Crores and a profit of INR 8,772 Crores. NCLAT ruled that the proceedings under IBC were only initiated by Operational Creditor for virtually establishing its claim of minimum guarantee amount which was never accepted or admitted by HCL and therefore, the present proceedings were initiated as a debt enforcement measure. Accordingly, NCLAT allowed the appeal filed by suspended director of HCL and set aside the insolvency admission order against HCL.

NCLAT Limits Supertech's Insolvency Process To One Project

Case Title: Ram Kishor Arora v. Union Bank of India

Case No.: Company Appeal (AT) (Insolvency) No. 406 of 2022

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising of Justice Ashok Bhushan and Mr. Naresh Salecha, has modified its stay order on constitution of Committee of Creditors of Supertech Ltd. (Supertech) and limited the Corporate Insolvency Resolution Process of Supertech to one project i.e., Eco Village II. Earlier, the NCLAT vide its order dated 12.04.2022 while granting time to the promoters of Supertech to settle the dispute with the Union Bank of India directed the Interim Resolution Professional not to constitute the COC. The Bench noted that as per the status report filed by IRP, out of the total 49,554 units Supertech has sold 38,603 units which is a substantial number.

The NCLAT modified its interim order and directed that project wise resolution to be started to test out the success of such resolution and directed that the construction of other projects shall continue under the supervision of IRP with the assistance of ex management. NCLAT directed the IRP that the COC be constituted only for the Eco Village II project and claims received regarding the Eco Village II project shall be separated and accordingly information memorandum shall be prepared only for Eco Village II. NCLAT also directed that no resolution plan shall be put to vote without the leave of NCLAT. The next date of hearing is 27.07.2022 for filing of status report by IRP. The order was passed on 10.06.2022.

NCLT

NCLT Chennai Restraints Liquidator From Dealing With Assets Of Jeypore Sugar Co. Ltd.

Case Title: IDBI Bank v Jeypore Sugar Company Ltd.

Case No.: CP/1307/IB/2018

The National Company Law Tribunal ("NCLT"), Chennai Bench, comprising of Justice S. Ramathilagam (Judicial Member) and Shri Anil Kumar B (Technical Member), has restrained the liquidator from dealing with the assets of Jeypore Sugar Company Ltd. ("Corporate Debtor") till the pendency of the application filed by promoters of the Corporate Debtor.

The Promoters of the Corporate Debtor had filed an application before the NCLT, alleging that the Liquidator was selling the plant and machinery of the Corporate Debtor for a scrap value. The NCLT Bench observed that the NCLAT had imposed a stay on the order dated 17.11.2021 of the NCLT, which was in operation till date and hence the Liquidator cannot be permitted to sell the plant and machinery of the Corporate Debtor. It was held that, "The Liquidator shall not deal with any of the assets of the Corporate Debtor till the disposal of the present application. Further, Respondent No. 12 is also restrained from lifting any kind of machinery or scrap until the disposal of the present application." The order was passed on 03.06.2022.

Ansal Properties Pays The Dues Lately, NCLT Delhi Dismisses Insolvency Petition Imposing A Cost Of Rs. 1 Lakh On Ansal

Case Title: M/s. Dalmia Family Office Trust v M/s. Ansal Properties and Infrastructure Limited

Case No.: (IB)-639(ND)/2021

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri. Abni Ranjan Kumar Sinha (Judicial Member) and Shri. L. N. Gupta (Technical Member), has dismissed the application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("IBC"), seeking initiation of the Corporate Insolvency Resolution Process ("CIRP") against Ansal Properties and Infrastructure Ltd. after the outstanding dues were paid off. A cost of Rs. 1 Lakh has been imposed on Ansal Properties and Infrastructure Ltd. for delaying the proceedings and depositing the due amount in the account of Dalmia Family Office Trust without its consent and after the NCLT Bench had reserved the order. The Order was passed on 06.06.2022.

Wave Megacity Projects, NCLT Dismisses Wave's Insolvency Plea With A Cost Of One Crore

Case Title: In the Matter of Wave Megacity Centre Private Limited

Case No.: C.P. (IB) No. 197 (PB)/2021

The National Company Law Tribunal (NCLT), Principal bench, comprising of Shri Bhaskara Pantula Mohan (Member Judicial) and Shri Hemant Kumar Sarangi (Member Technical), dismissed the insolvency petition filed by Wave Megacity Centre Private Limited (Wave) under Section 10 of the Insolvency and Bankruptcy Code, 2016. The Bench also imposed a cost of INR One Crore on Wave for filing the insolvency petition against itself for malicious or fraudulent intent and also directed the Central Government to make necessary investigation into the affairs of Wave.

The bench held that the removal of the directors of Wave just before filing of the Section 10 Petition is an indicator that the management who was running the Wave wants to hide from the reasons of default and wants to immunize itself from the rigors of the Code. NCLT noted that there are around 285 cases pending against Wave and the possibility of filing the Section 10 Petition to escape the liability arising out of this pending litigation cannot be overlooked. "We have concluded that the application filed under Section 10 of IBC, 2016 was an attempt on the part of the Corporate Debtor to play fraud on thousands of homebuyers, Noida Authority, Government etc. Further greater prejudice must have caused to them if CIRP was triggered." Further, NCLT also directed the Central Government to make necessary investigation into the affairs of Wave as it has collected huge amount in cash and siphoned off the same.

NCLT Closes The Right To File Reply Due To Delay, NCLAT Delhi Allows Appeal And Directs To Take Reply On Record

Case Title: Samyak Metals Pvt. Ltd. v Ugro Capital Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 668 of 2022.

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice M. Venugopal (Judicial Member) and Shri Ashok Kumar Mishra (Technical Member), has permitted taking on record of a Reply, which was allegedly lying with the Registry for over 50 days for curing of defects and the Adjudicating Authority had thus refused to take it on record by closing the right to file reply. The order was passed on 08.06.2022.

The NCLAT observed that Rule 34 of the NCLT Rules, 2016 provides that in a situation not provided in these rules, the Tribunal (Adjudicating Authority) may determine in the procedure in a particular case in accordance with the Principles of Natural Justice, by recording reasons in writing. The Bench reiterated that every man must be given an opportunity of being heard. "The technical aspect of the Appellant keeping his Reply lying in the Registry based on the objection is not a proper one without delving deep in the matter any further and also at this stage this Tribunal is not expressing any opinion one way or other about the merits of the matter which is to be taken up on arguments on 09.06.2022."