Filing Section 9 Applications For Money Recovery Instead Of Insolvency Resolution Is Abuse Of Process: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that filing a Section 9 application for the sole purpose of recovering money, rather than resolving insolvency, constitutes an abuse of the IBC's provisions and is strongly...

Insolvency Proceedings Initiated Against A Personal Guarantor Under IBC Abate Upon The Death Of The Guarantor: NCLT, New Delhi

The National Company Law Tribunal (NCLT), New Delhi, Bench VI, comprising Shri Mahendra Khandelwal (Member, Judicial) and Shri Rahul Bhatnagar (Member, Technical), has held that insolvency proceedings initiated against a personal guarantor under the IBC abate upon the death of the guarantor and that legal representatives cannot be substituted in such cases. Brief Facts: M/s...

Invoices Deemed Bogus By Income Tax Department Cannot Justify Insolvency Proceedings Against Corporate Debtor: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that invoices deemed bogus by the Income Tax Department in assessment orders cannot be relied upon to initiate insolvency proceedings against a Corporate Debtor. Brief Facts: N.V. Aluminium Cast...

Power Of Recall Limited To Procedural Errors, Not Rehearing For Judgment Review: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) has held that the power of recall does not grant the NCLAT the authority to rehear a case in order to identify any apparent error in the judgment, as that falls within the scope of a review. The bench held that the power of recall...

Stakeholders Consultation Committee's Advice Not Binding On Liquidator: Supreme Court

Recently, the Supreme Court clarified that the advice offered by the Stakeholders Consultation Committee (SCC) constituted in liquidation proceedings is not binding on the Liquidator. In this case, the appellant claimed that the Liquidator failed to constitute an SCC before initiating a liquidation process. However, the respondent refuted this argument stating that constituting an SCC was not...

IBC| Timeline To Pay Balance Sale Consideration By Auction Purchaser In Liquidation Proceedings Mandatory : Supreme Court

The Supreme Court recently interpreted Rule 12 of Schedule 1 under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 as mandatory in character. Rule 12 relates to how assets of the Company (Corporate debtor) are to be sold by the Liquidator. Rule 12 reads: "On the close of the auction, the highest bidder shall be invited to provide balance...

IBC | 'Auction-Purchaser Entitled To Benefit Of COVID Limitation Extension' : Supreme Court Refuses To Cancel Sale Over Delayed Deposit

The Supreme Court recently refused to cancel an e-auction despite the Auction Purchaser making a glaring default in making a deposit of the balance sale consideration on grounds that the subject matter of the auction has been utilised and the appellant failed to approach the court on time.A bench of Justices Hima Kohli and Ahsanuddin Amanullah noted: "Much water has flown under the bridge by...

Interest Claims Must Be Based On Contractual Agreement, Not Just Invoice Terms: NCLT Kolkata

The NCLT Kolkata Divison Bench, comprising Bidisha Banerjee, Member (Judicial) and D. Arvind, Member (Technical) has held that interest cannot be clubbed along with the debt in the absence of an agreement or clause in the purchase order. The Tribunal further observed that TDS deduction on the interest payable is not an acknowledgement of liability. Brief Facts: Sudarshan Paper...

Section 12A Application Not Permitted During Liquidation Period: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technicial Member) and Arun Baroka (Technicial Member) has held that an application under Section 12A of the IBC is not permitted during the liquidation period. Section 12A allows for the withdrawal of an insolvency application with the approval of ninety percent...

Bank Cannot Proceed Under SARFAESI Act Against Personal Guarantor During Interim Moratorium Under IBC, 2016: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) has held that once the interim moratorium is in effect due to insolvency proceedings against a personal guarantor under the IBC, 2016, the bank is prohibited from continuing any further actions under the SARFAESI Act regarding...

Dispute Regarding GST Dues Not A Bar To Section 9 IBC Proceedings: NCLAT

The NCLAT Bench of Justice Rakesh Kumar Jain, Member (Judicial) and Arun Baroka, Member (Technical) has held that the dispute regarding payment of GST dues is not a “pre-existing dispute” between the parties that would preclude the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency & Bankruptcy Code, 2016 (IBC). Brief...

Submission Of New Settlement Proposals Not Permissible After CoC Approves Resolution Plan Or Concludes CIRP: NCLAT

The National Company Law Appellate Tribunal, New Delhi division bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that once a Resolution Plan is approved by the Committee of Creditors (CoC) and the Corporate Insolvency Resolution Process (CIRP) is concluded, the submission of new settlement proposals is not permissible. The CoC's...