Payments From Corporate Debtor's Account Post-CIRP Commencement Without IRP Approval Is Breach Of Moratorium: NCLT Mumbai Directs Refund

The National Company Law Tribunal, Mumbai bench comprising Prabhat Kumar (Technical Member) and Justice V. G. Bisht (Judicial Member) have held that any payments made from the Corporate Debtor's account after the commencement of the Corporate Insolvency Resolution Process (CIRP) without the Interim Resolution Professional's (IRP) approval are in contravention of the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (the Code). The Tribunal directed Respondents to...

IBC Weekly Round Up [24th February - 2nd March 2025]

Nominal Index: ASHOK HARRY POTHEN Vs. THE AUTHORISED OFFICER, M/S. INDIAN BANK, W.P (C) No.4147/2025 M/s. Stesalit Limited Vs Union of India & Ors, WPA 532 of 2025 State Bank of India Versus Mr. Deepak Kumar Singhania, Company Appeal (AT) (Insolvency) No.191 of 2025 DKY Finance Pvt. Ltd. and Ors. Versus Mr. Sanjay Garg and Anr., Company Appeal (AT) (Insolvency) No. 1367 of 2024 & I.A. No. 4973 of 2024 ILD Owners Welfare Association Versus M/s. ALM Infotech City...

Operational Creditors Cannot Question Approval Of Resolution Plan That Provides Them With More Than Liquidation Value: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) that Resolution Plan approved by the Adjudicating Authority cannot be questioned by the Operational Creditors when they were provided more than the liquidation value under the Plan as per section 30(2) of the Insolvency and Bankruptcy Code, 2016 (Code). Brief Facts: On 07.12.2022, the Corporate...

Supreme Court Wonders Why NCLAT Wrote Long Order On Delay Condonation Application Despite High Pendency

The Supreme Court recently expressed surprise that the National Company Law Appellate Tribunal (NCLAT), despite having a high pendency of cases, devoted extensive time and effort to writing a 17-page order on a delay condonation application.A bench of Justice Abhay Oka and Justice Ujjal Bhuyan remarked that lengthy submissions and pleadings by members of the Bar often contribute to...

IBC Moratorium Does Not Bar Execution Of Penalties Imposed Under Consumer Protection Act : Supreme Court

In a significant development, the Supreme Court today (March 4) ruled that an interim moratorium under Section 96 of the Insolvency & Bankruptcy Code, 2016 (“IBC”) does not apply to penalty proceedings under Section 27 of the Consumer Protection Act, 1986 (“CP Act”). The Court explained that Section 79(15) of the IBC excludes certain liabilities, such as fines and penalties, from...

NCLT Admits Insolvency Proceedings Against Ansal Properties And Infrastructure U/S 7 Of IBC, Declares Moratorium

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has admitted insolvency proceedings under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC/ Code) against Ansal Properties and Infrastructure Limited. The Tribunal declared moratorium under section 14 of...

[Noida Sports City Scam] Allahabad HC Lays Down Guidelines Regarding Rights Of Other Members Of Consortium When One Member Goes Into Insolvency

While directing CBI inquiry against officials of New Okhla Development Authority and various allottes/ builder involved in development of the Sporty City project in Noida, the Allahabad High Court laid down guidelines regarding the rights of other members of consortium, when one member goes into insolvency as the same is not provided in the Insolvency and Bankruptcy Code, 2016.Holding that...

Banks Can Initiate Proceedings Under SARFAESI Act To Recover Loan If It Wasn't Party To Resolution Plan: Kerala High Court

The Kerala High Court bench of Justice Gopinath P. has held that a bank can initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to recover outstanding dues if it was not a party to the resolution plan approved under the Insolvency and Bankruptcy Code, 2016. The Court clarified that the bar...

Serving Demand Notice To Personal Guarantor Under Rule 7 Of Personal Guarantors Rules Cannot Be Considered Invocation Of Guarantee: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that a Notice served to the personal guarantor under Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to...

Order Approving Resolution Plan Passed Beyond 330 Days Cannot Be Questioned When Application Seeking Approval Was Filed Within CIRP Period: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that when an order approving the Resolution Plan is passed by the Adjudicating Authority after expiry of 330 days but the application seeking approval was filed within the stipulated time period, it cannot be said the plan...

Interest Free Maintenance Fee Deposited By Allottees Under Conveyance Deed Cannot Be Considered As Financial Debt U/S 5(8) Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that interest free maintenance fee to be paid by the allottees to the corporate debtor under the Conveyance Deed cannot be considered as financial debt under section 5(8) of the...

NCLT Has No Jurisdiction To Convict Person For Offence U/S 68 Of IBC In View Of Section 236 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna and Mr. Ajai Das Mehrotra (Technical Member) has held that the National Company Law Tribunal (NCLT) has no jurisdiction to convict a person for an offence under Section 68 under Chapter VII of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) in view of the express provision contained...