IBC | Moratorium Under S 14 No Bar To Execute Decree Against Directors/Officers Of Corporate Debtor: Supreme Court

Case Title: Ansal Crown Heights Flat Buyers Association (Regd.) V M/S. Ansal Crown Infrabuild Pvt. Ltd. & Ors.

Citation: 2024 LiveLaw (SC) 63

The Supreme Court has held that the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has no effect on the execution of a decree against the Directors or Officers of the Company (Corporate Debtor), which is undergoing Corporate Insolvency Resolution Process (“CIRP”) under IBC.

When the Company was admitted into CIRP, the National Consumer Disputes Redressal Commission (“NCDRC”) declined to permit execution of a decree against the Company and also its Directors/Officers. The Bench held that the protection of moratorium under Section 14 of IBC is only available to the Company and not to its Directors or Officers, thus the execution of decree can be done against them even during moratorium.

The Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan, has held, “Therefore, we are of the view that only because there is a moratorium under Section 14 of the IBC against the company, it cannot be said that no proceedings can be initiated against the opposite party Nos. 2 to 9(the respondent Nos. 2 to 9) for execution, provided that they are otherwise liable to abide by and comply with the order, which is passed against the company. The protection of the moratorium will not be available to the directors/officers of the company.”

IBC | Statutory Set Off Or Insolvency Set Off Inapplicable To Corporate Insolvency Resolution Process: Supreme Court

Case Title: Bharti Airtel Limited and Another V Vijaykumar V. Iyer and Others

Citation: 2024 LiveLaw (SC) 11

The Supreme Court has held statutory set off or insolvency set off is not applicable to Corporate Insolvency Resolution Process (“CIRP”) proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”). Further, Regulation 29 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”), which provides for mutual dealing and set off, does not apply to Part II of the IBC which deals with CIRP.

The principle of Set-off recognizes the right of a debtor to adjust the smaller claim owed to him against the larger claim payable to his creditor.

The Bench has also carved out two exceptions to the application of statutory or insolvency set off to CIRP proceedings. First being, when a party is entitled to contractual set-off, on the date which is effective before or on the date of commencement of CIRP. Secondly, in cases of 'equitable set-off' when the claim and counter claim in the form of set-off are linked and connected on account of one or more transactions that can be treated as one.

The Bench comprising Justice Sanjiv Khanna and Justice S.V.N. Bhatti, has observed that Section 30(2)(b) does not support the plea of insolvency set-off, since the provision deals with the amounts to be paid to creditors and not amount payable by creditors to Corporate Debtor. Further, the specific legislative mandate given in Chapter II Part II of IBC, the provisions of IBC relating to CIRP do not recognize the principle of insolvency set-off. “We would not extend it by implication, when the legislature has not accepted applicability of mutual set-off at the initial stage, that is, the Corporate Insolvency Resolution Process stage.”

IBC - Is Dissenting Financial Creditor Entitled To Minimum Value Of Security Interest? Supreme Court Refers To Larger Bench, Doubts Precedent

Case Title: DBS Bank Ltd Singapore v. Ruchi Soya Industries Ltd and another

Citation: 2024 LiveLaw (SC) 6

The Supreme Court has referred to larger bench the issue whether a dissenting financial creditor is to be paid the minimum value of its security interest as per the Insolvency and the Bankruptcy Code 2016.

A bench comprising Justices Sanjiv Khanna and SVN Bhatti, in the case DBS Bank Ltd Singapore v. Ruchi Soya Industries Ltd and another, referred the following question:

Whether Section 30(2)(b)(ii) of the Insolvency and Bankruptcy Code, 20161, as amended in 2019, entitles the dissenting financial creditor to be paid the minimum value of its security interest?

The bench differed from the view expressed by a coordinate bench in the 2021 judgment in the case India Resurgence ARC Private Limited v. Amit Metaliks Limited & Another which held that a dissenting secured creditor cannot challenge an approved resolution plan contending that higher amount should have been paid to it based on the security interest held by it over the corporate debtor.

The bench in the instant case observed that there was a contradiction between India Resurgence ARC Private Ltd with the ratio decidendi of the decisions of the three-Judge Bench judgments in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta(2019) and Jaypee Kensington Boulevard Apartments Welfare Association vs. NBCC (India) Ltd(2021).

IBC | Inappropriate For NCLAT To Direct NCLT To Admit Petition Under Section 7 Without Evaluating Rival Contentions On Merits: Supreme Court

Case Title: Maneesh Pharmaceuticals Ltd v Export Import Bank of India and Ors.

Citation: 2023 LiveLaw (SC) 1073

The Supreme Court has set aside an order passed by the National Company Law Appellate Tribunal (“NCLAT”) whereby the National Company Law Tribunal (“NCLT”) was directed to admit a petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC”).

The Bench comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that it was inappropriate for the NCLAT to direct the NCLT to admit the application under Section 7 of IBC straightaway without an evaluation of the rival contentions on merits. The Bench has directed the NCLT to determine whether the petition under Section 7 of IBC is liable to be admitted, after hearing the parties.

IBC | Resolution Plan Requires Closer Examination If Plan Envisages Use Of Asset Owned By Statutory Authority: Supreme Court

Case Title: Greater Noida Industrial Development Authority Versus Prabhjit Singh Soni & Anr.

Case No.: CIVIL APPEAL NOS.7590-7591 OF 2023

The Supreme Court bench comprising Chief Justice of India Dr. DY Chandrachud, Justice J.B. Pardiwala, and Justice Manoj Misra, has observed that ordinarily feasibility and viability of a resolution plan is best decided by the commercial wisdom of the Committee of Creditors (“CoC”), however, when the resolution plan envisages the use of asset/land not owned by the Corporate Debtor but by a third party, which is a statutory body, bound by its own rules and regulations having statutory flavor, then there has to be a closer examination of the plan's feasibility.

IBC | Claim Submitted With Proof Cannot Be Overlooked Merely Because It Was Submitted In Wrong Form: Supreme Court

Case Title: Greater Noida Industrial Development Authority Versus Prabhjit Singh Soni & Anr.

Case No.: Civil Appeal No(s).7590-7591/2023

The Supreme Court bench comprising Chief Justice of India Dr. DY Chandrachud and Justice JB Pardiwala and Justice Manoj Misra, has observed that the claim submitted by the Resolution Applicant (“RA”) under the Corporate Insolvency Resolution Process (“CIRP”) cannot be rejected/overlooked merely on the fact that the claim submitted appears to be in a different form other than the form in which the claim needs to be submitted.

The creditor submitted a claim to the Resolution Professional under Form C of Regulation 8 of CIRP Regulations 2016, as a financial creditor. The claim of the resolution applicant was rejected by the Committee of Creditors (“CoC”), National Company Law Tribunal (“NCLT”), and National Company Law Appellate Tribunal (“NCLAT”) on the note that the resolution applicant being Operational Creditor needs to submit their claim under Form B of Regulation 7 of CIRP Regulations 2016, as Operational Creditor.\

The Bench held, No doubt, the record indicates that the appellant was advised to submit its claim in Form B (meant for operational creditor) in place of Form C (meant of financial creditor). But, assuming the appellant did not heed the advice, once the claim was submitted with proof, it could not have been overlooked merely because it was in a different Form.”

IBC | Resolution Plan Approved By CoC Can't Be Withdrawn or Modified By Resolution Applicant: Supreme Court

Case Title: Deccan Value Investors L.P. & Anr. Versus Dinkar Venkatasubramanian & Anr.

Citation: 2024 LiveLaw (SC) 265

The Supreme Court has reiterated that once a resolution plan is approved by the Committee of Creditors (“CoC”) then it becomes impermissible for the resolution applicant to withdraw or modify the resolution plan.

The Bench Comprising Justices Sanjiv Khanna and Dipankar Datta referred to the Judgment of Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited and Another, where the Supreme Court elaborated and set out several reasons why the resolution applicant cannot be permitted to withdraw or modify the resolution plan after approval by the Committee of Creditors, and before an order under Section 31(1) of the Code is passed.

The court observed that due to the absence of any statutory provision in the Insolvency and Bankruptcy Code, it is impermissible for the resolution applicant to modify or withdraw the resolution plan after the plan was approved by the CoC.

“The effect of approval by the adjudicating authority under Section 31(1) of the Code makes the resolution plan binding on all stakeholders, even those who are not members of the Committee of Creditors. The scrutiny by the adjudicating authority for grant of approval in terms of Section 31(1), read with other provisions of the Code, is limited and restricted. It does not allow or permit the resolution applicant to unilaterally amend/modify or withdraw the resolution plan post approval by the Committee of Creditors.”, the court said.

NCLAT

Scheme Of Compromise Decided In Absence Of Shareholder Who Submitted It, NCLAT Chennai Directs Re-Consideration In Presence Of The Shareholder

Case Title: Sanjeev Mitla v Mr. Madhusudhan Rao Gonugunta & Anr.

Case No.: Company Appeal (AT) (CH) (Ins) No. 387 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has directed the Liquidator to convene a meeting of the Stakeholders Consultation Committee (SCC) to re-consider the compromise scheme submitted by a shareholder, in the presence of such shareholder.

A shareholder of the Corporate Debtor had submitted a compromise scheme under Section 230 of the Companies Act, 2013 to the Liquidator. The Liquidator placed the Scheme before the Stakeholders Consultation Committee in absence of the shareholder and the same was rejected. The shareholder submitted that it could not persuade the SCC in respect of the Scheme due to his absence.

NCLAT Chennai: Resolution Professional Is Empowered U/S 25(1) Of IBC To Reject CoC's Proposal For Renewal Of Bank Guarantees By Corporate Debtor

Case Title: IDBI Bank Ltd. and Ors. v. Mr. Sumit Binani, RP of KSK Mahanadi Power Company Ltd.

Case No.: Company Appeal (AT) (CH) (INS.) No. 385 / 2023

The National Company Law Appellate Tribunal ('NCLAT'), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the Resolution Professional is empowered under Section 25(1) of IBC to reject the proposal of Committee of Creditors ('CoC') for renewal of Bank Guarantees provided by the Corporate Debtor.

NCLAT New Delhi: Liquidator Is Entitled To His Fee Under S. 34 Of IBC And Regulation 4 Of Liquidation Regulations And Cost Under Regulation 2B Of Liquidation Regulations

Case Title: CA Jai Narayan Gupta (Liquidator of Barcle Enterprises Limited) vs. Radhasiriya Properties Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1473 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has held that the Liquidator is entitled to his fee under Section 34 of IBC and Regulation 4 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and Cost under Regulation 2B of Liquidation Regulations.

NCLAT Delhi: Once CIRP Has Stayed, Resolution Professional Can't Be Directed To Hand Over The Charge Of Corporate Debtor To Ex-Management

Case Title: Mr. Mukesh Kumar Jain vs. Navin Kumar Upadhyay & Anr

Case No.: Company Appeal (AT) (Insolvency) No. 930-931 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that Resolution Professional cannot be directed to hand over the charge of Corporate Debtor to the Ex-management, once CIRP has stayed.

The Bench opined that handing over the charge of the Corporate Debtor to Ex-management can be dangerous and the same is prone to misuse the assets and the assets shall be diminished, which may adversely affect the creditors of the Corporate Debtor in case of stay of the CIRP.

Resolution Professional Can't Question COC Decision Of Replacement: NCLAT Delhi

Case title: Partha Sarathy Sarkar v Specified Undertaking of Unit Trust of India Ltd (SUUTI) & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 1340 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that when the Committee of Creditors (CoC) passes a resolution to replace the Resolution Professional, then it is not open for the Resolution Professional to question the reasons for its replacement and ask NCLT to adjudicate upon the reasons which persuaded the CoC to pass the resolution.

NCLAT Delhi: Corporate Debtor Can't Be Absolved From Liability Just Because Insurance Claim Received By Operational Creditor

Case Title: Mr. Milan Aggarwal vs. Saudi Basic Industries Corporation and Anr.

Case No.: Company Appeal (AT) (Insolvency) No.231 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that the Corporate Debtor cannot be absolved from its liability to discharge its Operational debt by the Insurance Company's payment to the Operational Creditor of its claim and the same cannot be a ground to reject the Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of IBC.

NCLAT Delhi: Non-Stamping Of Agreement Doesn't Render CIRP As Non-Maintainable When Other Material To Prove Default Of Debt Exists

Case Title: Hiren Meghji Bharani vs. Shankheshwar Properties Pvt. Ltd. through its Resolution Professional and Anr.

Case No.: Company Appeal (AT) (Insolvency) No.446 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that the non-stamping of document does not render the Corporate Insolvency Resolution Process ('CIRP') petition filed to be non-maintainable when there exists other material on record to prove existence of default in the payment of debt.

NCLAT New Delhi: When CoC Hasn't Confirmed Appointment Of IRP, IRP Can Be Replaced By CoC U/S 22 Of IBC

Case Title: Kairav Anil Trivedi, IRP of Parenteral Drugs India Ltd. v. State Bank of India (Erstwhile CoC) & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1439 & 1440 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member), and Shri Arun Baroka (Technical Member), has held that when the Committee of Creditors ('CoC') has not confirmed the appointment of Interim Resolution Professional ('IRP'), the IRP can be replaced by the CoC under Section 22 of IBC.

NCLAT Chennai: Goods Not In Possession Of The Port, Claim By Port Can't Be Treated As Secured Creditor Under IBC

Case Title: V O Chidambaranar Port Authority vs. Shri Rajesh Chillale, RP of IndBharath Power Gencom Ltd.

Case No.: Company Appeal (AT) (CH) (Ins) No. 412 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), Chennai, comprising Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that there is no actual lien to invoke Section 171 of the Indian Contract Act, 1872 when the goods are not in possession of the Port Authority and the claim of the Port cannot be treated as a Secured Creditor for distribution of liquidation assets under Sec. 53 of IBC.

NCLAT Delhi Upholds Dismissal Of Insolvency Plea Against Aditya Birla Fashion And Retail Ltd., An Aditya Birla Group Company

Case title: In Style Fashion v Aditya Birla Fashion and Retail Limited

Case No.: Company Appeal (AT)(Insolvency) No. 1679 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has declined to initiate insolvency proceedings against Aditya Birla Fashion and Retail Limited under Section 9 of IBC, on the premise that there is pre-existing dispute between Parties which cannot be investigated upon by NCLT or NCLAT.

Aditya Birla Fashion and Retail Limited is a part of Aditya Birla Group of companies and runs the Pantaloons showrooms.

Successful Auction Purchaser To Pay All Dues For Availing A New Electricity Connection, Except For The Arrears Of Pre-CIRP Period: NCLAT Delhi

Case Title: Paschimanchal Vidyut Vitran Nigam Ltd. v HSA Traders & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.527 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member),
has held that the Successful Auction Purchaser in the liquidation of Corporate Debtor shall be liable to pay all dues for availing a new electricity connection, apart from the pre-CIRP electricity dues.

NCLAT Delhi: Optionally Convertible Debentures Constitute 'Financial Debt' U/s 5(8)(c) Of IBC

Case Title: Santosh Kumar vs. ASK Trusteeship Services Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1575 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), has held that the Optionally Convertible Debentures are Financial Debt within the meaning of Section 5(8)(c) of IBC.

When Number Of Allottees Disputed, NCLT To Decide S.7(1) Compliance Prior To Admission: NCLAT Delhi

Case title: Parikshit Madanmohan Sharma v M.S. Gopikrishnan & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 206 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Shri Naresh Salecha (Technical Member), has held that when the total number of allottees in a real estate project is disputed, then the NCLT should first decide whether the Section 7 petition has been filed by minimum number of allottees prescribed under second proviso to Section 7(1) of IBC or not.

The Bench has set aside a NCLT order whereby insolvency proceedings were initiated against a real estate developer company, without deciding the issue pertaining to compliance of Section 7(1) of IBC.

NCLAT Delhi Terminates Insolvency Proceedings Against Asian Hotels (West) Ltd., Accepts Settlement Proposal By Promoters

Case Title: Sandeep Gupta v JM Financial Asset Reconstruction Company Ltd. & Anr.

Case No.: Company Appeal (AT) (Ins.) No. 1192 & 1193 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has terminated Corporate Insolvency Resolution Process (“CIRP”) of Asian Hotels (West) Ltd., which was initiated by NCLT in September 2022. The Bench has accepted the Settlement Proposal submitted by Promoters and Suspended Directors of Asian Hotels (West), wherein 100% dues of Financial Creditors along with interest and 100% dues of the Operational Creditor, Government dues and dues of employees with entire CIRP cost has been proposed to be paid.

The Asian Hotels (West) Ltd. owns the five-star hotels namely Hotel Hyatt Regency Mumbai and JW Marriott, New Delhi Aerocity (through its subsidiary).

NCLAT Chennai: CoC's Commercial Wisdom Includes Approval Of Resolution Plan Below Liquidation Value

Case Title: Mr. Ramesh Kesavan vs. CA Jasin Jose, RP SD Pharmacy Pvt. Ltd.

Case No.: Company Appeal (AT)(CH)(Ins.) No. 422 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Chennai Bench, comprising Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the approval of the Resolution Plan below the Liquidation value is within the commercial wisdom of the Committee of Creditors ('CoC') as the IBC does not expressly bar that the Resolution Plan value should be over and above the Liquidation value.

NCLAT Delhi: CIRP Against Financial Service Provider Is Not Maintainable Under IBC

Case Title: Globe Capital Market Ltd. vs. Narayan Securities Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.32 of 2024 & I.A No. 62 of 2024

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that a Corporate Insolvency Resolution Process ('CIRP') application against the Financial Service Provider is not maintainable under IBC.

NCLAT Delhi: Ex-Promoter, Who Resigned Before CIRP Commencement, Is Eligible To Submit Resolution Plan

Case Title: Vishram Narayan Panchpor RP of Blue Frog Media Pvt. Ltd. vs. Committee of Creditors (Blue Frog Media Pvt. Ltd.) and Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1489 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that an Ex-Promoter/Director who resigned from Corporate Debtor before initiation of Corporate Insolvency Resolution Process ('CIRP') under Section 10 of IBC is eligible to submit a Resolution Plan under Section 29A of IBC.

Bank Files Claim After 738 Days Of Delay And Post Approval Of Resolution Plan, NCLAT Delhi Upholds Rejection Of Claim

Case title: Kotak Mahindra Bank Ltd. v Sandeep Goel RP for Sarvottam Realcon Pvt Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 140 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has upheld the rejection of a claim submitted by Kotak Mahindra Bank Ltd., which was submitted to the Resolution Professional after delay of 738 days and post approval of resolution plan for the Corporate Debtor.

NCLAT Delhi: Security Of Refund Of Advance Amount Can't Change Nature Of Transaction Into Financial Debt

Case Title: Sainik Industries Pvt. Ltd. vs. Ritesh Raghunath Mahajan, RP, Indian Sugar Manufacturing Company Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1614 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that the Security of refund of the advance amount cannot change the nature of transaction into financial debt.

Resolution Applicant Who Participated In The Process Has Locus To Object The Application For Approval Of Resolution Plan: NCLAT Delhi

Case title: PRIO S.A. v Mr. Pravin R. Navandar & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.1650 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that a resolution applicant who has participated in the process, has locus to object the application filed by Resolution Professional under Section 30(6) of IBC for approval of resolution plan submitted by another resolution applicant.

NCLAT Delhi Upholds Dismissal Of Plea To Initiate Proceedings Under Section 340 Of CrPC Against Allottees For Allegedly Filing False Affidavits

Case title: M/s Mist Direct Sales Pvt. Ltd. v Mr. Nitin Batra & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 96 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has upheld the rejection of an application seeking initiation of proceedings under Section 340 r/w Section 195 of the Criminal Procedure Code, 1973 (“CrPC”) against Allottees, for allegedly filing false affidavits before NCLT in Section 7 of IBC proceedings.

Proceedings under Section 340 of CrPC can be initiated when a person intentionally gives a false statement or fabricated false evidence at any stage of the judicial proceedings. The Appellant alleged that the Section 7 petition was not filed by 100 'valid' allottees as required under Section 7(1) of IBC and the affidavits filed by Allottees were false and fabricated. The NCLT held that it cannot decide on the issue of forged affidavits and declined to initiate proceedings under Section 340 of CrPC.

NCLAT Delhi: Adjudicating Authority Should Grant Extension Of Time To Consider Resolution Plan Crucial To Fulfill Object Of IBC

Case Title: Nimai Gautam Shah, Resolution Professional of Sintex Plastics Technology Ltd. vs. RBL Bank Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.82 of 2024

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member) held that the Adjudicating Authority ought to have granted an exclusion/extension of time when the Resolution Plan received in the process was required to be considered to fulfill the object of the IBC.

Section 9 Petition Not Served Upon Corporate Debtor, NCLAT Delhi Sets Aside NCLT Order Initiating CIRP

Case title: Satish Kumar Sethi v Varsha & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 217 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside an NCLT order whereby a petition under Section 9 of IBC was admitted and CIRP was initiated without serving a copy of petition to the Corporate Debtor.

The Bench has directed that the petition under Section 9 of IBC be revived before the NCLT for fresh consideration and the Corporate Debtor has been granted time to file a Reply.

NCLAT Delhi: Payment By Third Party For Corporate Debtor For Raw Material Or Working Capital Is “Financial Debt”

Case Title: Mr. Rajeev Kumar Jain vs. Uno Minda Ltd. and Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 947 of 2022

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Naresh Salecha (Technical Member), has held that the payment of raw material made by a third party at the instructions of Corporate Debtor or financial assistance towards working capital constitutes 'Financial Debt' under IBC.

Department Of State Tax Submits Claim Post Approval Of Resolution Plan By CoC, NCLAT Delhi Upholds Rejection Of Claim

Case title: Department of State Tax v Dar Media Pvt. Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 73 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that a claim submitted post approval of resolution plan by the Committee of Creditors (“CoC”) is not liable to be admitted. Accordingly, the Bench has upheld the rejection of claim of Department of State Tax, which was submitted post approval of resolution plan by CoC.

NCLAT Delhi Sets Aside NCLT Order Permitting Suspended Director To Enter Settlement During Pendency Of Plan Approval Application

Case title: Nehru Place Hotels and Real Estates Private Limited V Sanjeev Mahajan & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 1715-1716 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside a direction given by the NCLT, whereby the Suspended Director was given opportunity to enter settlement during the pendency of application filed by Resolution Professional for approval of Resolution Plan. The Bench has held that since the application for approval of resolution plan is pending for over a year, the NCLT ought to have decided the same.

On 08.01.2023, the Committee of Creditors (CoC) approved the Resolution Plan submitted by Resolution Applicant with 100% vote share and rejected the Settlement Proposal submitted by Suspended Director of Corporate Debtor with 100% vote share. Accordingly, the Resolution Professional filed an application seeking approval of Resolution plan. The Suspended Director also filed an application seeking consideration of its revised settlement proposal.

The NCLT granted another opportunity to Suspended Director to enter settlement with CoC and kept the application for approval of resolution plan in abeyance.

NCLAT Delhi: Definition Of Financial Debt U/S 5(8) Does Not Provide Disbursal To Be Made To Corporate Debtor Only

Case Title: Mr. Rajeev Kumar Jain vs. Uno Minda Ltd. and Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 947 of 2022

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Naresh Salecha (Technical Member) held that the definition of Financial Debt under Section 5(8) of IBC does not use the expression that disbursal should be made to the Corporate Debtor only.

NCLAT Delhi: NCLT Has Jurisdiction To Decide The Issue Of Trademark U/S 60(5)(c) Of IBC

Case Title: Gloster Cables Ltd. vs. Fort Gloster Industries Ltd. and Ors.

Case No.: Comp. App (AT) (Ins) No. 1343 of 2019

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) held that NCLT has the jurisdiction to decide the whether Trademark forms part of the assets of the Corporate Debtor under Section 60(5)(c) of IBC.

NCLAT Delhi: Liquidator Can Pursue Writ Petition On Behalf Of Corporate Debtor When NCLT Has Allowed Liquidator To Prosecute As Per Sec. 33(5) Of IBC

Case Title: CA Rajeev Bansal Liquidator of Isolux Corsan India Engineering & Construction Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1653 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member) held that the Liquidator can pursue a Writ Petition on behalf of the Corporate Debtor when the Adjudicating Authority has allowed the Liquidator to prosecute on behalf of the Corporate Debtor as per Section 33(5) of IBC.

Voting For Section 12A Proposal To Be Computed As Per Proviso To Section 25A(3A) R/w Section 25A(3) Of IBC: NCLAT Delhi

Case title: Vijay Saini v Shri Devender Singh & Ors

Case No.: Comp. App. (AT) (Ins.) No. 1194 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that for computing voting with regard to proposal under Section 12A of IBC, the voting has to be computed as per proviso to Section 25A(3A) read with Section 25A(3) of IBC. It has been further clarified that a proposal under Section 12A which statutorily requires 90% votes for approval, would not stand approved if majority (more than 50%) homebuyers/financial creditors vote in favour of it. The threshold of 90% votes must be met for approval of proposal.

Section 25A(3) of IBC provides that when the Authorised Representative represents several financial creditors, then he shall cast his vote for each financial creditor according to the instructions received from each financial creditor, to the extent of his voting share.

The Proviso to Section 25A(3A) of IBC states that when voting takes place in respect of proposal under Section 12A, then the Authorised Representative of Financial Creditor shall cast his vote in accordance with Section 25A(3).

“When the statute i.e. Section 12A provides 90% voting for approval of Section 12A proposal, 90% of the voting share of the creditor in class have to be taken into consideration. Since voting by each homebuyers who represented creditor in class has to be computed as per his voting share and adding all vote shares of the creditor in class with any other Financial Creditor if it is at least up to 90% only then 12A proposal is held to be passed”, the Bench held.

NCLAT Delhi: Treatment Of Income Tax Dues In The Resolution Plan As 'Operational Creditor' Doesn't Violate Section 30(2) Of IBC

Case Title: Jaiprakash Associates Ltd. vs. Jaypee Infratech Ltd. and Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 548 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that treatment of the Income Tax Department's dues in the Resolution Plan as 'Operational Creditor' is not violative of Section 30(2) of IBC.

NCLT Can't Direct CoC To Consider Suspended Management's Settlement Proposal, Without Opportunity To SRA: NCLAT Delhi

Case title: One City Infrastructure Pvt. Ltd. v Pratham Expofab Private Limited & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.287 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that the NCLT cannot direct the CoC to consider settlement proposal of Suspended Management of Corporate Debtor, without granting an opportunity to be heard to the Successful Resolution Applicant (SRA).

During the pendency of plan approval application before NCLT, the Suspended Management filed an application seeking consideration of their settlement proposal by Committee of Creditors (“CoC”). The NCLT did not accord any opportunity to SRA to file its response to the application and directed the CoC to consider the settlement proposal vis-à-vis the resolution plan. The NCLAT has set aside the NCLT order.

NCLAT Delhi: Non-Grant Of Reliefs And Concessions By NCLT Does Not Have Any Adverse Effect On The Validity Of The Resolution Plan And Is Not Violative Of The Law

Case Title: Jaiprakash Associates Ltd. vs. Jaypee Infratech Ltd. and Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 548 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that non-grant of any reliefs and concessions by NCLT does not have any adverse effect on the validity of the Resolution Plan and is not a violation of the law. The Bench emphasized that the Successful Resolution Applicant is obligated to implement the Resolution Plan, irrespective of whether specific reliefs and concessions are granted or not. It rejected the argument that the non-approval of certain reliefs and concessions within the Resolution Plan, the Resolution Plan cannot be approved and should be sent back to the CoC.

NCLAT Delhi: Personal And Corporate Guarantors Have No Right Of Subrogation After Approval Of Resolution Plan

Case Title: Jaiprakash Associates Ltd. vs. Jaypee Infratech Ltd. and Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 548 of 2023 & I.A. No. 2643, 3702 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that the personal guarantors and corporate guarantors have no right of subrogation after the approval of the Resolution Plan under IBC.

NCLAT Delhi: Section 29A(C) Disqualifies Those Managing And Controlling Corporate Debtor Who Failed To Clear Debts

Case Title: Navayuga Engineering Company Ltd. vs. Mr. Umesh Garg RP of Athena Demwe Power Ltd. and Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 783 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that Section 29A(c) of IBC disqualifies not only those in management and control of the Corporate Debtor when its account was declared Non-Performing Asset ('NPA') but also those in management and control of the Corporate Debtor in close proximity of time before the Resolution Plan was submitted, who failed to clear the debts of the Corporate Debtor.

NCLAT Delhi: Resolution Professional Is An Aggrieved Person If NCLT Overturns His Decision

Case Title: Devendra Singh Vs. Homebuyers of Sidhartha Buildhome Pvt. Ltd. & Ors.

Case No.: Company Appeal (AT) (Ins.) No. 791 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), held that the Resolution Professional is an aggrieved party when the decision of the National Company Law Tribunal (“NCLT”) directly overturns his decision.

Whether The Vote Of Each Homebuyer Is Required During The Voting On CIRP Withdrawal Resolutions? NCLAT Clarifies S 12A of IBC

Case Title: Vijay Saini vs Devender Singh & Ors.

Case No.: Company Appeal (AT) (Ins.) No. 1194, 791 & 982 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), held that for voting on Corporate Insolvency Resolution Process (CIRP) withdrawals under Section 12A of IBC, the vote of each homebuyer must be counted individually, rather than as a collective class of financial creditors.

Section 12A stipulates statutory provisions governing “withdrawal of application admitted under section 7, 9 or 10”. It states, “The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified.”

NCLAT Delhi: Trademark Hypothecated For Higher Amount And Assignment For Lower Amount Can't Be Sole Criteria To Treat It As 'Undervalued Transaction'

Case Title: Gloster Cables Ltd. vs. Fort Gloster Industries Ltd. and Ors.

Case No.: Comp. App (AT) (Ins) No. 1343 of 2019

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) held that the mere fact that the trademark was hypothecated for a higher amount and subsequently assigned for a lower amount would not be the sole criteria for deeming it an undervalued transaction.

MoU And Ledger Extract Are Insufficient Proof For Admitting Of Financial Debt Claim: NCLAT Delhi

Case title: D S Kulkarni & Associates v Manoj Kumar Aggarwal

Case No.: Company Appeal (AT) (Insolvency) No.923 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Arun Baroka (Technical Member), has held that Memorandum of Understanding (“MoU”) and extract of Ledger of the Corporate Debtor are insufficient proof for acceptance of a claim as financial debt.

One of the creditors of the Corporate Debtor submitted its claim before the Resolution Professional claiming itself to be a Financial Creditor at par with Homebuyers. To substantiate the claim, the creditor submitted an MoU and Ledger extract of the Corporate Debtor as proof. The Resolution Professional rejected the claim citing that financial debt claim cannot be admitted merely upon MoU and Ledger extract and the decision was upheld by the NCLT and NCLAT.

RP Best Person To Decide What Part Of Corporate Debtor's Business Is To Be Carried Out: NCLAT Delhi

Case title: Amit Tyagi v Indirapuram Habitat Centre Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.272 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that the Resolution Professional who is running the Corporate Debtor's business, is the best person to decide as to what part of the business can be carried out. Further, the allottees of a real estate project developed by the Corporate Debtor cannot demand execution of conveyance deed as a matter of right.

Relief To Home Buyers, NCLAT Upholds Resolution Plan Outlining Provisions For Completion Of 96 Residential Towers By Jaypee Infratech Pending Since 2011

Case Title: Jaiprakash Associates Ltd. vs Jaypee Infratech Ltd. and Others

Case No.: Company Appeal (AT) (Insolvency) No. 548

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), upheld a Resolution Plan which outlined provisions for the completion of approximately 96 residential towers that had remained under construction since 2011 by Jaypee Infratech Limited (JIL). The homebuyers' plea revolved around the delay in the implementation of the Resolution Plan and their earnest desire to acquire possession of their units.

Suraksha Realty Limited submitted its Resolution Plan, which was subsequently approved by the Committee of Creditors (CoC). However, objections were filed by Jaiprakash Associates Limited (“JAL”), the holding company of JIL and Manoj Gaur, the erstwhile Managing Director of JIL, against Suraksha Realty's Resolution Plan, in NCLT. The NCLT had approved Suraksha Realty's Resolution Plan, leading to the filing of appeals by JAL and Manoj Gaur in NCLAT. Now NCLAT has upheld the plan submitted by Suraksha Realty Limited.

NCLAT Delhi: Advance Paid By A Speculative Buyer In Real Estate Doesn't Fall Under Financial Debt Under IBC

Case Title: Naman Infradevelopers Pvt. Ltd. vs. Metcalfe Properties Pvt. Ltd.

Case No.: Company Appeal (AT)(INS) No.74 of 2024

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Justice Yogesh Khanna (Judicial Member), and Mr. Barun Mitra (Technical Member) held that the advance paid by a speculative buyer in Real Estate does not fall within the purview of Section 5(8) of IBC.

The Bench concluded that the Appellant cannot be given the status of 'Financial Creditor' as he is a speculative investor who has filed the CIRP application only for recovery of its money with profit and interest and not for the financial well-being of the Corporate Debtor.

Question Of Value Can't Be Raised Post Approval Of Resolution Plan By CoC: NCLAT Delhi

Case title: Committee of Creditors v Anil Tayal

Case No.: Company Appeal (AT) (Ins.) No.1633 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has upheld an order passed by NCLT herein it was held that the question of valuation of assets cannot be raised after the resolution plan has been approved by the Committee of Creditors (“CoC”).

Issue Of Whether Input Tax Has Been Taken In Excess Can't Be Dealt With In Section 9 Proceedings Under IBC: NCLAT Delhi

Case title: Zaara Enterprises Venture Pvt. Ltd. v Dhanraaj Agencies Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 356 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that the issue whether the Corporate Debtor has claimed input tax in excess on a GST invoice raised by the Operational Creditor cannot be decided in proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 (“IBC”).

Once Resolution Plan Is Approved By CoC And NCLT, SRA Can't Seek Its Substitution With Another Resolution Applicant: NCLAT Delhi

Case title: UV Asset Reconstruction Company Ltd. & Anr. v Aircel Ltd. Through Its Monitoring Committee

Case No.: Company Appeal (AT) (Ins.) No. 333 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that after approval of a resolution plan by the Committee of Creditors (“CoC”) and NCLT, the Successful Resolution Applicant (“SRA”) cannot be substituted with another entity/resolution applicant.

The SRA is an Asset Reconstruction Company and the plan submitted by it was approved by the CoC and NCLT. Thereafter, the Reserve Bank of India (“RBI”) issued a circular intimating that Asset Reconstruction Companies cannot be Resolution Applicant unless they have achieved certain net worth. Since the SRA had not achieved the net worth as required by RBI, the SRA filed an application before NCLT seeking its substitution with another resolution applicant, owing to its subsequent ineligibility to be a resolution applicant as per RBI norms. The NCLT rejected the application and NCLAT has upheld the rejection.

NCLAT Delhi: CIRP U/s 7 Of IBC Can Be Initiated Against An Auction Purchaser In Proceedings Under SARFAESI Act, 2002

Case Title: Anjani Kumar Prashar (Suspended Director of Grandstar Realty Pvt. Limited) vs. Manab Datta & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.1366 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that Corporate Insolvency Resolution Process ('CIRP') can be initiated under Section 7 of IBC against an Auction Purchaser in proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ('SARFAESI Act').

The NCLAT highlighted that financial debt can be incurred through various means, including assignment or transfers, as explicitly defined. In instances where amalgamation or demerger occurs under the Companies Act, 2013, resulting in the transfer or vesting of assets and liabilities to the amalgamated or transferee company, the transferee company cannot evade the obligations set forth in the insolvency code by claiming that disbursements were not directly made to it. Since the Corporate Debtor acquired the project under the SARFAESI Act, it cannot circumvent the provisions of the IBC and deprive the homebuyers of their rights. Given the existence of a financial debt, the filing of the application by the allottees under Section 7 cannot be faulted on this basis.

Once Resolution Plan Is Approved By CoC And NCLT, SRA Can't Seek Its Substitution With Another Resolution Applicant: NCLAT Delhi

Case title: UV Asset Reconstruction Company Ltd. & Anr. v Aircel Ltd. Through Its Monitoring Committee

Case No.: Company Appeal (AT) (Ins.) No. 333 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that after approval of a resolution plan by the Committee of Creditors (“CoC”) and NCLT, the Successful Resolution Applicant (“SRA”) cannot be substituted with another entity/resolution applicant.

The SRA is an Asset Reconstruction Company and the plan submitted by it was approved by the CoC and NCLT. Thereafter, the Reserve Bank of India (“RBI”) issued a circular intimating that Asset Reconstruction Companies cannot be Resolution Applicant unless they have achieved certain net worth. Since the SRA had not achieved the net worth as required by RBI, the SRA filed an application before NCLT seeking its substitution with another resolution applicant, owing to its subsequent ineligibility to be a resolution applicant as per RBI norms. The NCLT rejected the application and NCLAT has upheld the rejection.

When Order Passed In Presence Of Both Parties' Counsels, Limitation To File Appeal Commences From Date Of Order: NCLAT Delhi

Case title: Supreme Construction Developers Pvt. Ltd. v Puranik Builders Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 215 of 2024.

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice Yogesh Khanna (Judicial Member) and Shri Barun Mitra (Technical Member), has held that when an order is passed in presence of counsels of both the parties, then the parties cannot claim that they were unaware of the order. Accordingly, the limitation to file appeal before NCLAT would commence from the date of order, and not the date of upload of order on NCLT website.

Section 12(2) of the Limitation Act, 1963 states that while computing limitation for filing an appeal, review or revision, the date on which the judgment was pronounced and the time taken to obtain copy of the judgment shall be excluded.

The Bench opined that when NCLT passes an order, the party is obligated to apply for certified copy to seek benefit of Section 12 of Limitation Act. Since the Appellant applied for certified copy after 30 days of passing of order, the Bench declined to exclude the period from computation of limitation.

Tribunal Not Empowered To Hear Case Afresh Under Recall Jurisdiction: NCLAT Chennai

Case title: Adv. (CA) V. Venkata Sivakumar v Hari S. Hari Karthik & Ors.

Case No.: Comp. App (AT) (CH) (INS) No. 8 / 2022

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that the Tribunal cannot hear a case de-novo while adjudicating an application filed for recall of an order. The Bench has dismissed a review application filed by an Applicant seeking recall of an NCLAT order. The Bench has held that the meaning of 'recall' cannot be expanded to be read as a synonym for 'review'.

“At this juncture, this Tribunal, aptly points out that the Power to Recall of an Order or Judgment of a Tribunal, can be exercised by it only, if any procedural error, committed, in pronouncing the earlier Order or Judgment. In addition, the Power to Recall an Order / Judgment, earlier passed by this Tribunal, is not the power to Re-hear the case De-novo, to find out any Apparent error, in the Order / Judgment, which is in the ambit of a Review of a Judgment, to examine the Judicial Propriety or any Apparent Error, committed, by the Court / Tribunal, which is not the case made out in the instant Review Application, which is sought to be read as Recall, by the Petitioner/Erstwhile Liquidator.”

Erstwhile Liquidator Can't Seek Recall Of An Order In His Personal Capacity After Being Replaced By Another Liquidator: NCLAT Chennai

Case Title: Adv. (CA) V. Venkata Sivakumar v Hari S. Hari Karthik & Ors.

Case No.: Comp. App (AT) (CH) (INS) No. 8 / 2022

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that a Liquidator, after being replaced with another liquidator, cannot seek recall of an order in his personal capacity. If the erstwhile liquidator is aggrieved by an order passed by NCLAT then the remedy would lie in appeal under Section 62 of IBC.

The erstwhile Liquidator had filed an appeal before the NCLAT. In the meanwhile, the erstwhile Liquidator was replaced with new Liquidator, who withdrew the appeal before the NCLAT. The Erstwhile Liquidator filed a review application before NCLAT seeking recall of the order whereby appeal was withdrawn. The NCLAT dismissed the review application citing that the erstwhile Liquidator has no locus standi to file such application or question the decision taken by New Liquidator in his official capacity.

NCLAT Delhi; IBC Does Not Provide Any Scope For Dissatisfied Homebuyers In Minority To Override Majority Decision Of COC

Case - Mr. Girish Nalavade Vs. Bhrugesh Amin and Ors.

Citation - Company Appeal (AT) (Insolvency) No. 1542 of 2023

The National Company Law Appellate Tribunal (NCLAT) New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that the IBC does not provide any scope for dissatisfied homebuyers in the minority to override the majority decision taken by the Committee of Creditors (COC).

NCLT

NCLT Mumbai: Financial Creditor Can't Initiate CIRP Against Successful Resolution Applicant On Default Of Payment As Per Resolution Plan

Case Title: ICICI Prudential Asset Management Company Ltd. vs. Nandi Vardhan Infrastructure Ltd.

Case No.: CP(IB) 276 MB 2023

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that the Financial Creditor cannot initiate a Corporate Insolvency Resolution Process ('CIRP') application against the Successful Resolution Applicant ('SRA') on default in payment to Stakeholders/Creditors as per terms of the approved Resolution Plan under IBC.

NCLT Delhi Approves Resolution Plan of Ramkrishna Forgings Ltd For ACIL Ltd.

Case Title: IDBI Bank Limited v M/s ACIL Limited

Case No.: CP IB-170/PB/2018

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), has approved the Resolution Plan submitted by M/s Ramkrishna Forgings Limited for ACIL Ltd.

The Resolution Plan is valued at Rs. 129.5 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 1,782 Crores.

Claim Arising Out Of Arbitral Award Against Which Section 34 Proceedings Are Pending, NCLT Kolkata Upholds RP's Decision To Admit Claim Contingently

Case Title: Bank of India v McNally Bharat Engineering Company Limited

Case No.: CP (IB) No. 891/KB/2020

The National Company Law Tribunal (“NCLT”), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has upheld the Resolution Professional's decision to admit claim arising out of an arbitral Award as contingent claim, since proceedings under Section 34 of Arbitration and Conciliation Act, 1996 are pending before the High Court against the Award.

NCLT Hyderabad: Amount In Corpus Fund For Maintenance Of Apartments By Homebuyers Does Not Qualify As 'Financial Debt' In IBC

Case Title: Vasathi Anandi Owners Welfare Association v. Vasathi Housing Ltd.

Case No.: Company Petition-CP(IB) No. 50/7/HDB/2020

The National Company Law Tribunal ('NCLT'), Hyderabad Bench, comprising Shri. Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member), has held that the amount deposited in Corpus Fund towards the maintenance of constructed apartments by Homebuyers does not qualify as 'Financial Debt' within the meaning of Section 5(8)(f) of IBC. It was observed that Corpus Fund amount is similar to a prepayment made to a service provider for maintenance and the same does not meet the criteria for classification as Financial Debt.

Suspended Directors Can't Transfer Amount From Corporate Debtor's Account During Stay On CIRP, NCLT Mumbai Directs Refund

Case Title: State Bank of India v Arshiya Northern FTWZ Limited

Case No.: C.P. No. 1245 of 2021

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Ms. Reeta Kohli (Judicial Member) and Shri Sanjiv Dutt (Technical Member), has held that Suspended Directors of Corporate Debtor cannot transfer amounts from the Corporate Debtor's account while there is a stay on CIRP.

The NCLAT stayed the CIRP and before vacation of stay the Suspended Directors transferred certain amounts from the Corporate Debtor's account towards loan payment of Group Companies. The Bench directed the Group Companies to revert the amount in the Corporate Debtor's account.

“After the stay of the CIRP order, Resolution Professional cannot discharge any function. Stay of admission order/CIRP does not mean that the Corporate Debtor should be put back in the management of day to day affairs of the company and allowed to function as such. Interim Order staying CIRP clearly means that no further process shall be taken in CIRP and the Resolution Professional shall not take any further action. The Corporate Debtor can no longer be permitted to function as it was functioning prior to the date of admission order.”

NCLT Allahabad: Operational Debt, Out Of Non Delivery Of Goods Due To Export Ban, Not Maintainable

Case Title: Morex Corporation Ltd. v. Jindal Poly Films Ltd.

Case No.: CP (IB) No.12/ALD/2021

The National Company Law Tribunal ('NCLT'), Allahabad, comprising Shri. Praveen Gupta (Judicial Member) and Shri Ashish Verma (Technical Member), has held that a Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of IBC is not maintainable for any claim arising on account of non-delivery of goods for export by the Corporate Debtor due to a ban imposed by the Government of India.

NCLT Hyderabad Approves Resolution Plan For GVK Power (Goindwal Sahib) Ltd., A GVK Group Company

Case Title: Axis Bank Limited v GVK Power (Goindwal Sahib) Ltd

Case No.: CP No. (IB) 43/7/HDB/2020

The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. N. Venkata Ramakrishna Badarinath (Judicial Member) and Shri Charan Singh (Technical Member), has approved the Resolution Plan submitted by Punjab State Power Corporation Limited for GVK Power (Goindwal Sahib) Limited, which is a part of GVK Group promoted by Mr. Gunupati Venkata Krishna Reddy.

The Resolution Plan is valued at Rs. 1,080 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 6,615.48 Crores.

NCLT Mumbai: Non-Acceptance Of Goods By Corporate Debtor Does Not Equate To Operational Debt U/S 5(21) Of IBC

Case Title: Adishank Chemicals Pvt. Ltd. vs. Baerlocher India Additives Pvt. Ltd.

Case No.: CP(IB)/736/MB/2023

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Justice Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the non-acceptance of the goods by the Corporate Debtor cannot be equated with the default in respect of an Operational debt under Section 5(21) of IBC.

NCLT Hyderabad: IBC Overrides The Provisions Of Andhra Pradesh Revenue Recovery Act, 1864

Case Title: K. Sivalingam RP of NCS Sugars Ltd. vs. District Collector and Ors.

Case No.: CP(IB) No.299/7/HDB/2018

The National Company Law Tribunal ('NCLT') Hyderabad, comprising Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri. Charan Singh (Technical Member) held that the Insolvency and Bankruptcy Code, 2016 ('IBC') overrides the provisions of the Andhra Pradesh Revenue Recovery Act, 1864.

NCLT Hyderabad: Moratorium U/s 14 Of IBC Imposes Legal 'Embargo' Not Only On Financial Creditors But On Any Other Person For Sale Of Assets In CIRP

Case Title: K. Sivalingam RP of NCS Sugars Ltd. vs. District Collector and Ors.

Case No.: CP(IB) No.299/7/HDB/2018

The National Company Law Tribunal ('NCLT') Hyderabad, comprising Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri. Charan Singh (Technical Member), has held that the moratorium u/s 14 of IBC operates as a legal 'embargo' on the sale or alienation of the assets of the Corporate Debtor during the CIRP of the Corporate Debtor not only on the Financial Creditor but also on any person.

NCLT Kolkata: Revival Of Corporate Debtor Is Primary Goal Of Resolution Plan And Going Concern Sale

Case Title: Universaltech Paper LLP vs. Mr. Krishnaswami CVR, Liquidator of Kohinoor Pulp & Paper Pvt. Ltd.

Case No.: I.A. (I.B.C.) 1055/KB/2023 In CP(IB) No. 511/KB/2019

The National Company Law Tribunal ('NCLT') Kolkata, comprising Justice Rohit Kapoor (Judicial Member) and Mr. Balraj Joshi (Technical Member), has held that the primary goal of Resolution Plan as well as the sale of a Corporate Debtor as a going concern remains the same i.e revival of the Corporate Debtor's business.

IBC | Settlement In Section 7 Or Dropping Of Sec. 66 Proceedings Does Not Automatically End Proceedings Under Section 43: NCLT Mumbai

Case Title: Reserve Bank of India v Dewan Housing Finance Corporation Limited

Case No.: COMPANY PETITION (IB) NO. 4258/MB/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that the proceedings under Section 43 of IBC would not automatically end against a party, if the parties enter settlement in Section 7 of IBC proceedings or proceedings under Section 66 of IBC are dropped.

“We again wish to reiterate that merely because the Applicant has settled the matter with regard to the said loan does not ipso facto absolve it of the insinuations or allegations made in the application u/s 43 of the Code. We are further of the view that it would be untimely and inopportune to exonerate the Applicant of the allegations made against it in the said application which is yet to be heard and decided on merits. Besides, settlement with the Respondent in proceedings u/s 7 of the Code does not or cannot have the effect of drawing curtains over the proceedings u/s 43 of the Code which are altogether different and distinct.”

NCLT Indore: Insolvency Resolution Professional Can Continue To Function Till Appointment Of RP U/S 16(5) Of IBC

Case Title: Indian Bank vs. Indison Agro Foods Ltd.

Case No.: IA/166(MP)2023 & IA/253(MP)2023

The National Company Law Tribunal ('NCLT') Indore, comprising Shri P. Mohan Raj (Judicial Member) and Shri Kaushalendra Kumar Singh (Technical Member), held that the Interim Resolution Professional ('IRP') can continue to function till the date of appointment of the Resolution Professional ('RP') as per the amended provisions of Section 16(5) of IBC.

NCLT Delhi: Debt Assignment Deed Cannot Be Challenged In CIRP U/s 7 Of IBC

Case Title: CFM Asset Reconstruction Pvt. Ltd. Vs. M.G. Finvest Pvt. Ltd.

Case No.: Company Petition IB (IBC) NO. 115/PB/2022

The National Company Law Tribunal ('NCLT') New Delhi Bench, comprising Justice Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), held that the Debt Assignment Deed cannot be challenged in a Corporate Insolvency Resolution Process ('CIRP') under Section 7 of IBC.

Passing Of Decree Or Award Does Not Alter The Nature Of Operational Debt To Financial Debt: NCLT Mumbai

Case Title: Hpcl-Mittal Pipelines Limited v Coastal Marine Construction And Engineering Limited

Case No.: C.P. (IB) 323/MB/2023

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Mr. Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the nature of an operational debt would not change to financial debt with the passing of a decree or arbitral award in respect of the same.

“Undisputedly, the claim on the basis of which arbitral proceedings were initiated by the Petitioner emanated from a work contract which originally was at best an operational debt and as per the law laid down in the afore cited cases, the nature of debt would not change with the passing of a decree or an award and, therefore, simply because an award was passed in respect of an operational claim, it will not by itself metamorphose into a financial debt.”

NCLT Delhi: 'Homebuyers' Seeking Redressal Through 'RERA' Or 'NCDRC' Prior To Approaching 'NCLT' Retain Their Status As Financial Creditors

Case Title: Tarun Ahuja & Ors. Vs Puri Construction Private Limited

Case No: CP IB NO. 755/PB/2020

The National Company Law Tribunal (“NCLT”), New Delhi, comprising Shri Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), has held that regardless of whether homebuyer-allottees have sought recourse through RERA (Real Estate Regulatory Authority) or NCDRC (National Consumer Disputes Redressal Commission) prior to approaching Tribunal, their status as 'financial creditors' under Section 5(8)(f) of the IBC will remain unchanged.

NCLT New Delhi: NCLT Rejects Insolvency Petition Filed By Wilmington Trust Against Spicejet Ltd.

Case Title: Wilmington Trust SP Services (Dublin) Ltd. vs. SpiceJet Ltd.

Case No.: CP IB NO. 349/(ND)/2023

The National Company Law Tribunal ('NCLT') New Delhi, comprising Shri Mahendra Khandelwal (Judicial Member) and Shri Rahul Bhatnagar (Technical Member), has declined Wilmington Trust's application to initiate the Corporate Insolvency Resolution Process ('CIRP') against SpiceJet Limited. The CIRP application has been rejected on the premise that for the Insolvency and Bankruptcy Code, 2016 ('IBC'), a clear distinction is required between the Owner, Lessor, Assignee, Trustee, to being recognized as Operational Creditor in terms of provision of IBC.

NCLT Kolkata: Simultaneous CIRP Can Be Initiated Against Principal Borrower And Corporate Guarantor

Case Title: State Bank of India vs. Anupriya Management Pvt. Ltd.

Case No.: Company Petition (IB) No. 18/KB/2023

The National Company Law Tribunal ('NCLT') Kolkata comprising Smt. Bidisha Banerjee (Judicial Member) and Shri D. Arvind (Technical Member) held that a simultaneous Corporate Insolvency Resolution Process ('CIRP') can be initiated against Principal Borrower and Corporate Guarantor under the Insolvency and Bankruptcy Code, 2016 ('IBC').

NCLT Kolkata: Filing Of Default Information With Information Utility Under Rule 20(1A) Of IBBI (UI) Regulations 2017 Is Not Mandatory

Case Title: State Bank of India vs. Anupriya Management Pvt. Ltd.

Case No.: Company Petition (IB) No. 18/KB/2023

The National Company Law Tribunal ('NCLT') Kolkata comprising Smt. Bidisha Banerjee (Judicial Member) and Shri D. Arvind (Technical Member) held that the filing of default information with Information Utility in compliance with Rule 20(1A) of IBBI (Information Utilities) Regulations 2017 ('IBBI Regulations 2017') is not mandatory compliance.

NCLT Hyderabad: 'Provisional Order Of Attachment' Made Under PMLA Would Not Nullify The Protection Granted Under Section 32A IBC

Case Title: Canara Bank vs Deccan Chronicle Holdings Limited

Case No.: CP(IB)No.41/7/HDB/2017

The National Company Law Tribunal ('NCLT') Hyderabad, comprising Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), has held that the provisional order of attachment (POA) under Section 5(1) of the Prevention of Money Laundering Act, 2002, in respect of the properties of the corporate debtor covered under the approved resolution plan, would not end the protection available to such properties under section 32A IBC.

Section 32A stipulates that once Resolution Plan is approved by the Adjudicating Authority after completion of CIRP, there cannot be attachment or confiscation of assets of Corporate Debtor, as otherwise same will defeat objects of the insolvency Regime.

Private Sale Conducted In Non-Transparent Manner & In Absence of Several SCC Members, NCLT Indore Directs Liquidator To Re-Conduct Bidding

Case Title: Hira International Limited v M/s Girdharilal Sugar and Allied Industries Limited

Case No.: CP(IB) 591 of 2019

The National Company Law Tribunal (“NCLT”), Indore Bench, comprising of Shri P. Mohan Raj (Judicial Member) and Shri Kaushalendra Kumar Singh (Technical Member), has directed the Liquidator to re-conduct private sale bidding of the Corporate Debtor since the earlier bidding was not conducted in transparent manner. The Bench observed that the Liquidator failed to make genuine efforts to sale the Corporate Debtor under Liquidation through Public Auction. Thereafter, the Liquidator conducted Private Sale hastily and without giving proper prior notice to Stakeholders Consultation Committee (“SCC”) to attend the bidding. Consequently, only one SCC member could attend the bidding.

On an application filed by unsuccessful bidder, the Bench has directed the Liquidator to re-conduct the Private Sale bidding in presence and consultation of SCC members, including the Commercial Tax Department.

NCLT Mumbai: Corporate Guarantor's Date Of Default Is Independent Of Principal Borrower's Date Of Default

Case Title: Central Bank of India vs Superfine Profile and Extrusions Pvt. Ltd.

Case No.: CP (IB) 692/MB/2023

The National Company Law Tribunal ('NCLT') Mumbai, comprising Mr. Kishore Vemulapalli (Judicial Member) and Ms. Anu Jagmohan Singh (Technical Member), has held that the date of default by the Principal Borrower is not relevant to determine the date of default by the Corporate Guarantor.

NCLT Ahmedabad: Amount Invested In A Joint Venture Project Of A Promoter And Investor Does Not Constitute Financial Debt Under IBC

Case Title: Deccan Charters Pvt. Ltd. vs. GSEC Monarch and Deccan Aviation Pvt. Ltd.

Case No.: CP(IB)/100(AHM)2022

The National Company Law Tribunal ('NCLT') Ahmedabad, comprising Justice Mrs. Chitra Hankare (Judicial Member) and Mr. Velamur G Venkata Chalapathy (Technical Member), has held that the amount invested in a Joint Venture Project of a promoter and investor is not a Financial Debt under IBC.

NCLT Chennai: Liquidation Is A Time-Bound Process And Liquidator Is Accountable To Explain Delay In Liquidation Process

Case Title: State of Tamil Nadu vs. S. Rajendran, Liquidator of Daehsan Trading India Pvt. Ltd. and Anr.

Case No.: IA/1318/IB/2020 in TCP/111/IB/2017

The National Company Law Tribunal ('NCLT') Chennai, comprising Justice Sanjiv Jain (Judicial Member) and Mr. Venkataraman Subramanian (Technical Member) held that Liquidation is a time-bound process and the Liquidator being made accountable is required to explain if there is any delay caused in the liquidation process.

Appeal Under Section 42 Of IBC Would Only Lie Against An 'Adjudicating' Order Of The Liquidator: NCLT Mumbai

Case Title: Sai Projects & Engineers Private Limited v Kalpyog Chemicals Private Limited

Case No.: C.P.(IB)/1619(MB)/C-III/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Smt. Lakshmi Gurung (Judicial Member) and Shri Charanjeet Singh Gulati (Technical Member), has held that an appeal under Section 42 of IBC would only lie against an 'adjudicating' order passed by the Liquidator. The Bench has rejected an appeal filed under Section 42 of IBC, whereby Employees Provident Fund Organization challenged a letter sent by the Liquidator at a time when he stood discharged from his duties due to dissolution of the Corporate Debtor.

NCLT Mumbai: Society Not Entitled To Recover Past Arrears Of Applicant's Purchase In The Auction From Liquidator Of Corporate Debtor

Case Title: Mr. Hitendra Vishanji Nagda and Ors. vs. Prime Plaza Premises Co-operative Society Ltd.

Case No.: CP (IB) No. 4302/MB/C-II/2018

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice Shri. Kuldip Kumar Kareer (Judicial Member) and Shri. Anil Raj Chellan (Technical Member) held that the Society is not entitled to recover the past arrears in respect of the unit purchased by the Applicant in the auction from the Liquidator of the Corporate Debtor.

NCLT Mumbai Allows Withdrawal Of Liquidation Application On Receipt Of Resolution Plan

Case Title: Salil Shashank Kulkarni v Rubique Technologies India Private Limited

Case No.: I.A. No. 4372 of 2023 in CP (IB) No. 4304 (MB) of 2019

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice Shri. Kuldip Kumar Kareer (Judicial Member) and Shri. Anil Raj Chellan (Technical Member) allowed the withdrawal of the liquidation application since one resolution plan was received by the Committee of Creditors ('CoC') during the pendency of the liquidation application upholding the aim of IBC.

NCLT Mumbai: CIRP Can't Be Initiated U/S 7 Of IBC Based On Transfer Agreement For Purchase Of Debentures From Financial Creditors

Case Title: Edelweiss Asset Reconstruction Company Ltd. vs. Ajmera Realty and Infra India Ltd.

Case No.: CP (IB) No.877/MB/2023

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice V.G. Bisht (Retd.) (Judicial Member) and Mr. Prabhat Kumar (Technical Member) held that the Corporate Insolvency Resolution Process ('CIRP') under Section 7 of IBC cannot be initiated based on Transfer Agreement/promise for purchase of Debentures from Financial Creditors.

NCLT Imposes Rs. 2.5 Lakh Cost On Personal Guarantor For Delayed Filing Of Reply, NCLAT Delhi Reduces Cost To Rs. 25,000

Case title: Rakesh Nayar v State Bank of India

Case No.: Company Appeal (AT) (Insolvency) No. 270 of 2024

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has reduced the cost imposed by NCLT on Personal Guarantor for 6 days delay in filing of Reply from Rs. 2.5 Lakhs to Rs. 25,000. The Bench opined that the imposition of Rs. 2.5 Lakh cost is excessive as delay in filing of Reply to application under Section 95 of IBC was of mere 6 days.

NCLT Mumbai Orders Dream 11's Sports Platform Owner Sporta Technologies Pvt. Ltd. Into CIRP Under IBC

Case Title: Piyush Jani, RP for Reward Business Solutions Pvt. Ltd. vs. Sporta Technologies Pvt. Ltd.

Case No.: CP No. 775/(IB)-MB-V/2021

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice Reeta Kohli (Judicial Member) and Shri. Anil Raj Chellan (Technical Member) allowed the petition and ordered Sporta Technologies Pvt. Ltd. (Corporate Debtor) into the Corporate Insolvency Resolution Process ('CIRP') under Section 9 of the Insolvency and Bankruptcy Code, 2016 ('IBC'). The Corporate Debtor is Dream 11's sports platform owner.

NCLT Orders Liquidation Of Mehul Choksi-Promoted Gitanjali Gems

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has ruled for the liquidation of Gitanjali Gems, a jewelry retailing company headed by fugitive Mehul Choksi, under Section 33 of IBC.

“On perusal of records, it is evident that the assets of the Corporate Debtor were under attachment by the Directorate of Enforcement under the enforcement under the provisions of the PMLA, 2002 and considering the bleak chances of insolvency resolution amid the ongoing investigations and attachment of assets, the CoC had resolved in its 06th Meeting held on 05th April, 2019 to liquidate the Corporate Debtor by a majority of 90.16% voting in favour.”

The tribunal further added that, “The CoC with requisite voting as given under Section 33(2) has approved the liquidation of Corporate Debtor in view of bleak chances of receiving any resolution plan for the reasons discussed hereinbefore. This Tribunal has very limited powers of judicial review in such matters of commercial wisdom.”

NCLT Kolkata: Corporate Debtor Can't Take Shelter U/S 186 Of Companies Act To Avoid CIRP When Loan Has Been Advanced In Breach Of Section 186(2) Of Companies Act

Case Title: EDCL Infrastructure Ltd. vs. Urban Infraprojects Pvt. Ltd.

Case No.: Company Petition (IB) No. 106/KB/2023

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Justice Bidisha Banerjee (Judicial Member) and Shri D. Arvind (Technical Member) held that the Corporate Debtor cannot take shelter under Section 186 of the Companies Act, 2013 to avoid Corporate Insolvency Resolution Process ('CIRP') under Section 7 of IBC, wherein the Financial Creditor has advanced loan in breach of Section 186(2) to the Corporate Debtor.

The Bench observed that the said provision serves as a safeguard for the shareholders/stakeholders of the Company, presently the Financial Creditor, ensuring that those managing the company cannot and do not exceed prescribed loan limits which would be in excess of their capacity and could lead the company into significant trouble in case of default. Thus, Section 186 of the Companies Act, 2013, mandates that if a company intends to provide a loan beyond the specified limits, it requires approval from shareholders through a special resolution.

In the event of a violation under Section 186(2) of the Companies Act, 2013, the affected parties would include the shareholders/stakeholders of the Financial Creditor and regulatory authorities. The Corporate Debtor cannot use such violations as a defense to refuse repayment of borrowed funds.

NCLT Mumbai Approves Rs. 9,661 Crore Resolution Plan By IndusInd International Holdings For Reliance Capital

Case Title: Mr. Nageswara Rao Y, Administrator of Reliance Capital Limited vs. Committee of Creditors of Reliance Capital Limited and IndusInd International Holdings Limited

Case No.: CP (IB) No. 1231 of 2021

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice V.G. Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member), has approved the Rs. 9,661 crore resolution plan submitted by IndusInd International Holdings Ltd ('IIHL') for Reliance Capital Limited (Corporate Debtor) under Section 31 of IBC.

The Resolution Plan of IIHL is valued at Rs. 9,661 crores. Out of the total claims of Rs 38,526.42 crore, only Rs 26,086.75 crore were admitted by the NCLT with a massive haircut of 63 percent. The average fair value of the Corporate Debtor is Rs. 16,696.05 crores and the average Liquidation value is Rs. 13,158.46 crores.

Section 53 of IBC provides priority to the dues of Workmen and Employees, however, in the resolution plan they have been paid NIL against an admitted claim of Rs. 5.71 crores.

The Plan provides that the secured financial creditors who voted in favor of the Resolution Plan be paid in full to the extent of their outstanding principal amount. The unsecured financial creditors have been proposed to be paid 5% of their admitted claims.

The Plan provides that payment towards Related Party Creditors be settled for NIL.

NCLT Chennai: Adjudicating Authority Under IBC Is Not The Appropriate Forum To Decide On Revocation Of Attachment Made By ED Under PMLA During CIRP

Case Title: Mr. Palaniappan Liquidator of Nathella Sampath Jewelry Pvt. Ltd. vs. The Joint Director Directorate of Enforcement

Case No.: CP/129(IB)/2018

The National Company Law Tribunal ('NCLT') Chennai, comprising Shri Justice Jyoti Kumar Tripathi (Judicial Member) and Shri Ravichandran Ramasamy (Technical Member) held that the NCLT under IBC, is not the appropriate fora to decide on revocation of attachment made by Enforcement Directorate ('ED') under Prevention of Money Laundering Act, 2002 ('PMLA') during Corporate Insolvency Resolution Process ('CIRP').

NCLT observed that the 'Attachment' as a concept cannot be decided upon by the NCLT and cannot be subject to Section 60(5) of IBC.

NCLT Kolkata: IBC Prevails Over State Financial Corporation Act, 1951

Case Title: Mr. Rajesh Lahila vs. West Bengal Industrial Development Corporation Ltd.

Case No.: C.P. (IB) No. 1674/KB/2019

The National Company Law Tribunal ('NCLT') Kolkata, comprising Justice Ms. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that IBC prevails over State Financial Corporation Act, 1951 (SFC Act).

Tribunal noted the inconsistency between Section 18(f) of IBC and Section 29 of the SFC Act and observed that while Section 18(f) of IBC casts duty on the Resolution Professional to take custody of Corporate Debtor's assets as recorded in the balance sheets, the explanation of the said provision also provides that Corporate Debtor's assets not in possession shall also be taken into custody.

On the other hand, Section 29 of the SFC Act provides that on a failure to the payment as per the terms and conditions of the borrowings, the Corporation can take first charge over the Corporate Debtor's immovable properties to be retained and dispose of the said properties pledged. The NCLT resolved the said inconsistency through the application of Section 238 of IBC providing that IBC shall prevail over any other statute in the case of such inconsistency.

NCLT Mumbai: Profits During CIRP Be Allocated To Financial Creditors When RFRP And Resolution Plan Are Silent On Such Allocation

Case Title: Kalyan Janata Sahakari Bank Ltd. & Anr. vs. Arun Kapoor, Resolution Professional of CICIL Biochem Private Limited

Case No.: C.P. (IB) No. 4676/MB/2018

The National Company Law Tribunal ('NCLT') Mumbai, comprising Mr. Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member) held that the profits accrued during the Corporate Insolvency Resolution Process ('CIRP') be allocated to the Financial Creditors when the Request for Resolution Plan ('RFRP') and the Resolution Plan are silent on the allocation of profits.

Liquidation Value Is More Than Resolution Plan , NCLT Allahabad Directs SRA To Match Liquidation Value

Case title: Hadirah Steels Pvt. Ltd. v Rana Heavy Engineering Ltd.

Case No.: CP (IB) No.50/ALD/2022

The National Company Law Tribunal (“NCLT”), Allahabad Bench, comprising of Shri Praveen Gupta (Judicial Member) and Shri Ashish Verma (Technical Member), has directed the Successful Resolution Applicant to consider matching the resolution plan value at par with the liquidation value, which is on a higher side. The Successful Resolution Applicant is the Financial Creditor of the Corporate Debtor and also the sole member of Committee of Creditors (“CoC”).

“We are also conscious of the fact that commercial wisdom of the Committee of Creditors in the matter of approval of resolution plan should be regarded. However, in the peculiar circumstances of the case where the financial creditor who is member of CoC itself is the SRA as well, we therefore, find it justifiable in passing such directions to the SRA to consider matching the total plan value at par with the liquidation value with corresponding pro-rata rise in the amount of disbursement.”

NCLT Kolkata: Dispute On Forgery And Fabrication Of Document Cannot Be Decided By Adjudicating Authority (NCLT) In A Summary Proceeding Under IBC

Case Title: Abdul Hannan vs. Jai Jute and Industries Ltd.

Case No.: Company Petition (IB) No. 154/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member) held that the dispute relating to forgery and fabrication of a document cannot be adjudicated by the Adjudicating Authority in a summary proceeding under Insolvency and Bankruptcy Code, 2016 ('IBC').

The Tribunal placed reliance on the various decisions of the NCLAT in Radha Exports (India) Pvt. Limited vs. K.P. Jayaram, Jaginder Singh Lather vs. AU Small Finance Bank Ltd., Satori Global Limited v. Shailja Krishna, and Shri T.R. Arya v. Dilawari Motors Pvt. Ltd. wherein it was held that disputes as to whether the documents are forged or have been fabricated cannot be adjudicated by NCLT.

NCLT Kolkata: Police Complaint Before The Issuance Of The Demand Notice U/S 8 Of IBC Relating To Supply Of Inferior Goods Or Services Constitutes 'Pre-Existing Dispute'

Case Title: Abdul Hannan vs. Jai Jute and Industries Ltd.

Case No.: Company Petition (IB) No. 154/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member) held that a Police Complaint, prior to the issuance of the Demand Notice under Section 8 of IBC prosecuting a dispute regarding the supply of inferior goods and/or service is a pre-existing dispute.

The Bench placed reliance on the NCLAT decision in Sherbahadur D. Yadav vs. M/s. Rohan Dyes and Intermediates Ltd. wherein it observed that existence of complaints prior to the initiation of proceedings u/s 9 of IBC is to be considered as a pre-existing dispute between the parties.

Further reliance was placed on NCLAT decision in Mr. Anil J. Nemaavarkar vs. M/s. Kumar Builders Mumbai Realty Pvt. Ltd,. wherein it was held that IBC is not for resolving disputes relating to service, benefits, and the remedy lies elsewhere.

Section 7 IBC Petition Can't Be Filed By Power Of Attorney Holder Unless Authorized By Board Resolution: NCLT Hyderabad

Case Title: Axis Bank Limited vs Karvy Forde Search Pvt. Ltd.

Case No.: CP(IB) No. 249/7/HDB/2022

The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising Dr Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Charan Singh (Technical Member), has held that a petition under Section 7 of IBC cannot be filed by a 'power of attorney' holder unless duly authorized by a Board Resolution.

The NCLT examined the requirements for applying under Section 7(2) of IBC and referred to Form-1 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Entries in the form mandate submission of the name and address of the authorized person to apply on behalf of the financial creditor, along with an authorization letter. However, the form does not explicitly mention a 'power of attorney holder'.

The NCLT perused the notification issued by the Central Government under Section 7(1) of IBC, specifying persons authorized to apply on behalf of a financial creditor, which did not include 'power of attorney holders'.

NCLT Kolkata: Any Attachment Of Tainted Assets Of Corporate Debtor Before CIRP Commencement Would Always Be Available To Fulfill The Object Of IBC

Case Title: State Bank of India vs. Shree Mahalaxmi Corporation Pvt. Ltd.

Case No.: Company Petition (IB) No. 130/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member), has held that Any attachment of tainted assets of a Corporate Debtor before the Corporate Insolvency Resolution Process ('CIRP') commencement would always be available to fulfill the object and goal of IBC.

NCLT Kolkata: Provisional Attachment Order Under PMLA Won't Bar Admission Of CIRP Against Corporate Debtor Under IBC

Case Title: State Bank of India vs. Shree Mahalaxmi Corporation Pvt. Ltd.

Case No.: Company Petition (IB) No. 130/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member) held that the Provisional Attachment Order under PMLA will not bar the admission of Corporate Insolvency Resolution Process ('CIRP') proceedings against the Corporate Debtor under IBC.

NCLT Mumbai: Timeline Provided By CIRP Regulation 36A(6) Must Be Adhered To Strictly

Case Title: Shree Siddhivinayak Cotspin Pvt. Ltd. vs. Rajan Deshraj Agarwal and Anr.

Case No.: IA No. 2390 of 2023 In CP(IB) 518 (IB)2020

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the timeline provided by the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ('CIRP Regulation') 36A(6) must be adhered to strictly.

NCLT Chandigarh - Minimum Threshold Will Be Applicable To Any Amount Raised From Allottee

Case: Mr. Tek Chand Narula vs M/s Vatika Ltd.

Citation: CP (IB) No.528/Chd/Hry/2019 & IA No. 302/2022

The National Company Law Tribunal (NCLT), Chandigarh bench, comprising Justice Dr. P.S.N. Prasad (Judicial Member) and Shri Umesh Kumar Shukla (Technical Member), has held that the requirement of satisfying the minimum threshold of either 10% or 100 allottees will be applicable to any amount raised from an allottee, irrespective of whether the said allottee is alleging the default of interest or the principal amount.

HIGH COURT

S.204 IBC | Provision Of Twin Tier Control By IBBI And IPA By Itself Doesn't Give Rise To Presumption Of Double Jeopardy: Madras High Court

Case Title: CA V Venkata Sivakumar v The Insolvency and Bankruptcy Board of India (IBBI) and Others

Citation: 2024 LiveLaw (Mad) 35

The Madras High Court while dismissing a challenge made to Section 204 of the Insolvency and Bankruptcy Code (IBC), which gives powers to the Insolvency Professional Agency (IPA) to monitor the conduct of the Insolvency professional, observed that merely because the provision gave powers to both the Insolvency Bankruptcy Board of India (IBBI) and the IPA, it would not become arbitrary or give a presumption of double jeopardy.

The bench of Chief Justice SV Gangapurwala and Justice Bharatha Chakravarthy observed that the conferment of powers to the IBBI and IPA by itself would not amount to conferring unbridled power as the regulation and bye-laws provided for checks and balances. Noting that there was no excessive power being granted, the court added that Section 204 of IBC was only an enabling provision and there was no constitutional infirmity in the provision.

NCLT Kochi Order “Preposterous” And “Untenable” Exceeding Jurisdiction In Declaring Tax Assessment Order Void: Kerala High Court

Case Title: Deputy Commissioner (Works Contract), Kerala State Goods and Services Tax Department vs. National Company Law Tribunal

Case No.: WP(C) No. 39185 of 2022

The Kerala High Court bench of Justice Dinesh Kumar Singh, has observed that an Order passed by the National Company Law Tribunal ('NCLT') Kochi Bench was 'preposterous' and 'untenable'.

NCLT Kochi had held an Assessment Order by Kerala Value Added Tax ('KVAT') Works Contract Authorities against Albana Engineering (India) Pvt. Ltd. (Respondent 2) to be void ab initio in violation of Section 14(1)(a) of IBC.

“The Company Law Tribunal has no power and authority under the IBC to declare an assessment order as void ab initio and non-est in law. Such an order only reflects the competence of the persons who are manning such an important Tribunal. The Order shows the lack of basic understanding of the law. Instead of considering the application by the 2nd respondent for permission to file an appeal against the assessment order, the National Company Law Tribunal, Kochi Bench, has assumed the jurisdiction of the Constitutional Court to declare the assessment order as void ab initio.”

Lender Banks Must Furnish Copy Of Audit Reports Before Classifying Loan Account As Fraud: Gujarat High Court

Case Title: Amit Dineshchandra Patel vs. Reserve Bank of India

Citation: 2024 LiveLaw (Guj) 10

The Gujarat High Court bench comprising of Justice Sangeeta K. Vishen, has observed that the Lender Banks must provide a reasonable opportunity to the Borrower by furnishing a copy of Audit Reports and allowing him to submit a representation before classifying the account as fraud.

In 2021, the Corporate Debtor (Company) was admitted into a Corporate Insolvency Resolution Process ('CIRP') under Insolvency and Bankruptcy, Code, 2016. The Company's loan accounts were declared as fraud by the consortium banks.

IBBI

IBBI Amends CIRP Regulations W.E.F. 15th February 2024

Ref. No. IBBI/2023-24/GN/REG113

The Insolvency and Bankruptcy Board of India (“IBBI”) has issued a notification dated 15.02.2024, whereby amendments have been made to the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). The key amendments are:

• Operating separate bank accounts for real estate projects: To ensure financial transparency and accountability, the amendment makes it mandatory to have a separate bank account for each real estate project under a corporate debtor.
• Monthly meetings of the committee of creditors (CoC): Under the amended dispensation, the resolution professional (RP) is mandated to convene a CoC meeting at least once in every thirty days, with a provision to extend the interval between meetings to a maximum of one meeting per quarter, if CoC so decides.
• Voting procedures: In place of provision of minimum period specified for the opening of the voting window with no upper limit, the amended regulation empowers the CoC to decide the period of opening of electronic voting window with a minimum of twenty-four hours and a maximum of seven days with further increments of twenty-four hours each. Further, to streamline the voting process, the amendment mandates that where the matters listed for voting have already received requisite majority vote, the RP shall provide one last opportunity to vote by extending the voting window by a maximum period of twenty-four hours.
• Approval of insolvency resolution process costs: With a view to enhance the oversight of the CoC over going concern costs, the amendment provides that the RP to seek approval from the CoC for all costs including going concern costs related to the insolvency resolution process.
• Disclosure of valuation methodology: With an aim to increase transparency and reduce disputes over valuation related issues, the amendment provide for explaining the valuation methodology to the members of the CoC before the computation of estimates.
• Disclosure of fair value in the information memorandum: For fostering informed participation in the process, the amendment provides that the fair value may be made part of the information memorandum (IM). However, the CoC, after recording the reasons, can decide not to share such an information where in it's considered view such a disclosure is not beneficial for the resolution.
• Flexibility in inviting resolution plans in real-estate cases: With a view that each project in a real estate case may need different treatment in terms of resolution, the amendment clarifies that after due examination, the CoC may direct the RP to invite separate plan for each project.
• Monitoring committee for implementation of resolution plan: The amendment enables the CoC to decide for constitution of a monitoring committee for overseeing the implementation of the resolution plan. The committee may include the RP, any other insolvency professional or any other person as its member. In case the RP is made part of the committee, the monthly fee payable to him shall not exceed the monthly fee received by him during the corporate insolvency resolution process.

Continuation of the resolution process pending extension application: A clarification has been provided to ensure that RP continues to discharge his responsibilities under the resolution process till an application for extension is being decided by the Adjudicating Authority.