NCLAT New Delhi: Barter Agreements Don't Constitute 'Operational Debt'

Case Title: Real Estate Regulatory Authority vs. D.B. Corp Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No.1172-1173 of 2022

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has held that the Corporate Insolvency Resolution Process ('CIRP') cannot be initiated under Section 9 of Insolvency and Bankruptcy Code, 2016 ('IBC') based on Barter Agreement/Transactions.

NCLAT New Delhi: Inter-Corporate Deposit In A Joint Venture Can't Be Construed As A 'Financial Debt' Under IBC

Case Title: Ansal Housing Ltd. Vs. Samyak Projects Pvt. Ltd.

Case No.: Company Appeal (AT)(Insolvency) No. 542 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member) has held that financial assistance given by one party to another in a Joint Venture Agreement ('JVA') by way of an Inter-Corporate Deposit ('ICD') to develop a real estate project jointly cannot be construed as a 'Financial Debt' in terms of IBC.

NCLAT New Delhi: RERA Has Locus To Appeal Against CIRP Initiation Order And Is An “Aggrieved Person” U/S 61 Of IBC

Case Title: Real Estate Regulatory Authority vs. D.B. Corp Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No.1172-1173 of 2022

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that the Real Estate Regulatory Authority ('RERA') has locus to challenge Corporate Insolvency Resolution Process ('CIRP') initiation Order in Real Estate Insolvency in appeal under Section 61 of IBC before NCLAT.

NCLAT New Delhi: Liquidator Is Not Entitled To Charge Fee From Scheme Proponent Submitting Scheme Under S.230 Of The Companies Act

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 not entitled to charge any fee from the Scheme Proponent, who has submitted the Scheme under Section 230 of the Companies Act, 2013 read with Regulation 2B of IBBI (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”).

The NCLAT observed that Regulation 2B of the Liquidation Regulations only refers to the cost incurred by the Liquidator and Regulation 4 of the Liquidation Regulations deals with the Liquidator's fee. It held that being aware of the difference between the cost and fee, Regulation 2B does not indicate that any fee by the Liquidator can be charged from the Scheme Proponent. The Liquidator is entitled to his fee as per the statutory provision of Section 34, sub-sections (8) and (9) read with Regulation 4 of Liquidation Regulations. Thus, no fee can be charged from the Scheme Proponent, who has submitted the Scheme under Section 230 of the Companies Act, 2013 read with Regulation 2B of Liquidation Regulations.

NCLAT Delhi: Decisions To Liquidate Corporate Debtor By CoC U/S 33(2) Of IBC Must Be With Reasons And Cannot Be Done Arbitrarily

Case Title: Jaipur Trade Expocentre Pvt. Ltd. vs. Metro Jet Airways Training Pvt. Ltd. & Ors.

Case No.: Company Appeal (AT) (Ins.) No. 1224 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 decisions of the Committee of Creditors ('CoC') to liquidate the Corporate Debtor under Section 33(2) of IBC have to be with reasons and the liquidation cannot be decided arbitrarily.

NCLT

NCLT Chennai Terminates Insolvency Proceedings Against Appu Hotels Ltd., Approves Settlement Proposal By Promoter

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IA(IBC)/1134(CHE)/2022 in IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has terminated the Corporate Insolvency Resolution Process (“CIRP”) against Appu Hotels Ltd. while allowing an application filed under Section 12A of IBC by the Resolution Professional.

The Committee of Creditors have approved the Settlement Proposal submitted by Promoter of Corporate Debtor valued at Rs. 592 Crores, whereas the total claims admitted by the Resolution Professional amounted to Rs. 438.8 Crores. A Resolution Plan submitted by MGM Healthcare's owner, Mr. M.K. Rajagopalan, valued at Rs. 423 Crores was earlier approved by the NCLT but later set aside by the NCLAT.

Non-compliance Of Regulation 30A Of CIRP Regulations Not A Ground For Rejection Of Section 12A Application: NCLT Chennai

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has held that an application under Section 12A of IBC cannot be rejected merely on hyper-technical ground of non-compliance of Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). Compliance of Regulation 30A is directory and not mandatory.

“Regulation 30A prescribes the set of procedure for withdrawal of Application under Section 12A of IBC, 2016. This is nothing but a set of procedural rules. All the rules of procedure by themselves are to aid the Tribunal which is exercising its judicial power to render justice. Procedure rules are a hand-maiden to justice and should never be made a tool to deny justice or perpetuate injustice. Procedural defects or irregularities which are curable should not be allowed to defeat the substantive rights or to cause injustice”, the Bench held.

Prospective Resolution Applicant Has No Locus To Question Promoter's Settlement Proposal Under Section 12A: NCLT Chennai

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has held that Prospective Resolution Applicants have no locus to question the settlement proposal of the Promoter under Section 12A of IBC.

“It is also pertinent to point out here that the Prospective Resolution Applicants also cannot state that non – compliance of Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 has caused prejudice to them. Regulation 30A encompasses only (i) Applicant / Petitioning Creditor, (ii) CoC and (iii) IRP / RP. It does not confer any right upon the Prospective Resolution Applicants to object to the settlement proposal or withdrawal of Application under Section 12A. Even assuming for a moment, if such a right is conferred, the Resolution Applicant is required to convince this Adjudicating Authority that non – compliance has caused serious prejudice to the Applicant.”