IBC News
CoC Is Empowered To Liquidate Corporate Debtor Any Time After It's Constitution Or Before Resolution Plan Is Confirmed: NCLT Delhi
The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has held that CoC in the legislative scheme of the Insolvency and Bankruptcy Code, 2016 is empowered to take the decision to liquidate the Corporate Debtor, any time after its constitution and before confirmation of the...
Adjudicating Authority Can't Venture Into Appreciation Of Merit Of Pre-Existing Dispute, Not Empowered By Section 9 IBC: NCLAT
The National Company Law Appellate Tribunal Principal Bench of Justice Yogesh Khanna and Ajai Das Mehrotra held that the adjudicating authority cannot venture into the appreciation of the merit of pre-existing dispute and embark upon the adjudication of rival contentions of parties. The bench held that Section 9 of Insolvency and Bankruptcy Code doesn't empower the adjudicating...
NCLT New Delhi Initiates Insolvency Proceedings Against Revital Reality Private Limited For Financial Debt And Default
The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has initiated insolvency proceedings against Revital Reality Private Limited noting that it failed to deliver possession of the residential units within the stipulated time frame. The bench noted: “…it is clear that the applicants...
Madras High Court: Clean State Theory Not Applicable To Undisclosed Creditors Left Out Due To Negligences Of IRP Or RP
The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory shall not apply to undisclosed creditors to protect them from the deliberate non-disclosure or silence of the suspended board of directors or negligence of Interim Resolution Professional ('IRP') or Resolution Professional ('RP') towards disclosing their...
Madras High Court: MSME Corporate Debtor Can't Misuse Clean Slate Theory To Withhold Information When Its Management Had A Duty To Disclose
The Madras High Court bench of Justice N. Seshasayee held that an MSME Corporate Debtor cannot exploit the Clean Slate Theory by withholding information, especially when its management, which remained in control, had a duty to disclose such information. Background Facts: National Sewing Thread Co. Ltd. (Petitioner), a public limited company registered under the MSME Act, 2006,...
Madras High Court: Clean State Theory Only Protects Third-Party Successful Resolution Applicant And Not Suspended Board Of Corporate Debtor From Future Claims
The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory only protects the third party – Successful Resolution Applicant ('SRA') and not the suspended board of the Corporate Debtor from uncertainties of future claims. The High Court remarked: “It should not be forgotten that CST is a judicial coinage to protect the third...
Resolution Applicant Not Bound To Pay Past Dues When No Claim Is Made, Even If Electricity Dues Are Statutory In Character: Meghalaya High Court
The Meghalaya High Court has held that a State authority cannot compel a successful resolution applicant under Insolvency and Bankruptcy Code, 2016 (I&B Code) to pay past electricity dues, if the State authority has not made any claim in respect of its dues under approved resolution plan.The Petitioner-Company, Reliance Infratel was admitted to insolvency and a resolution plan was...
Madras High Court: Adjudicating Authority Must Exercise Jurisdiction Akin To Revisional Jurisdiction To Assess The Correctness Of COC's Actions
The Madras High Court bench of Justice N. Seshasayee held that though the Adjudicating Authority may not substitute the commercial wisdom of the Committee of Creditors ('CoC'), however, it must exercise jurisdiction akin to revisional jurisdiction to assess the correctness of the actions taken by the CoC. Background Facts: National Sewing Thread Co. Ltd. (Petitioner), a...
Madras High Court Urges Parliament To Assess Efficiency Of IBC And Consider Recovery Percentage From Successful Resolution Processes
The Madras High Court bench of Justice N. Seshasayee urged the Parliament to assess and evaluate the working efficiency of the Insolvency and Bankruptcy Code, 2016 ('IBC') and questioned whether the Parliament has considered the general recovery percentage achieved from a successful corporate debtor resolution process. Background Facts: National Sewing Thread Co. Ltd. (Petitioner),...
Weekly Digest Of IBC Cases: 03rd June 2024 To 09th June 2024
HIGH COURTS Official Liquidator Must Adhere To Ethical Principles And Fairness To Discharge Their Duties Under IBC: Delhi High Court Case Title: Sundaresh Bhat vs Insolvency And Bankruptcy Board of India Case No.: W.P.(C) 14389/2022 The Delhi High Court bench of Justice Subramonium Prasad held that official liquidators must adhere to ethical principles and...
NCLT Delhi Bench Appoints Resolution Professional In Self-Initiated Insolvency Application Under Section 94(1) IBC
The National Company Law Tribunal Court-V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has appointed a Resolution Professional in an application filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016. The Personal Guarantor approached the bench for insolvency proceedings to be initiated...
Refundable Security Deposit Carrying Interest In Development Agreement Constitutes Financial Debt U/S 5(8) Of IBC: NCLAT New Delhi
The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising Shri Justice Ashok Bhushan (Judicial Member) and Shri Barun Mitra and Shri Arun Baroka (Technical Members), has held that Refundable Security Deposit carrying interest in development agreement constitutes under Section 5(8) of IBC since the development agreement has the effect of a...