NCLAT

Adjudicating Authority Can Extend Time Limit Of PPIRP Beyond 120 Days: NCLAT New Delhi

Case Title: Mr. Vikash Gautamchand Jain RP of Kethos Tiles Pvt. Ltd.

Case Reference: Company Appeal (AT) (Insolvency) No. 1173 of 2024 & I.A. No. 4190, 4191 of 2024 with Company Appeal (AT) (Insolvency) No. 1323 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), held that expiration of 120 days does not lead to automatic termination of Pre Packaged Insolvency Resolution Process (PPIRP) if sufficient cause is shown. In this case, PPIRP of the corporate debtor was initiated by M/s. Kethos Tiles Pvt. Ltd., an MSME, under section 54C of the Insolvency and Bankruptcy Code (IBC) and the National Company Law Tribunal (NCLT) had terminated the PPIRP when time period within which the entire process had to be completed, expired.

Resolution Applicants Can't Revise Offers Post Approval, CoC's 'Commercial Wisdom' Can't Be Faulted: NCLAT

Case Title: Vantage Point Asset Management Pte. vs. Ashish Arjunkumar Rathi & Anr.

Case Numbers: Company Appeal (AT) (Insolvency) No. 1619 & 1620 of 2024 with Company Appeal (AT) (Insolvency) No. 1621 & 1622 of 2024 with Company Appeal (AT) (Insolvency) No. 1696 & 1697 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) has observed that the 'commercial wisdom' of the Committee of Creditors (CoC), which did not approve a Resolution Plan, which had given the highest money, cannot be questioned. The Tribunal went on to observe that after approval of the Resolution Plan, no Resolution Applicant is entitled to raise its offIt noted clause 4.1.8 which stated, “the CoC is under no obligation to any of the Resolution Applicants … to approve a Resolution Plan which has scored the highest as per the Evaluation Criteria and any Resolution Plan shall be approved solely on the basis of the CoC's commercial wisdom.”

Assignee Stepping Into Shoes Of Assignor, Borrower Or Guarantor Cannot Challenge Such Assignment: NCLAT New Delhi

Case Title: Mr. Paresh Parekh v. Alchemist Asset Reconstruction Co. Ltd. and Anr.

Case Reference: Company Appeal (AT) (Insolvency) No. 1204 of 2024 with Company Appeal (AT) (Insolvency) No. 1205 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that personal guarantee can be invoked even if a put option has not been exercised. The Tribunal dismissed an appeal filed by Paresh Parekh and Manish Patel (personal guarantors) against an order passed by the NCLT in which insolvency proceedings under section 95 of the Insolvency and Bankruptcy Code.The NCLAT further observed that SARFAESI Act allows the debt to be assigned to the Assets Reconstruction Companies and once the debt is assigned, assignee steps into the shoes of an original lender. Additionally, the deed of guarantee contained a clause to assign the debt itself therefore the arguments of the appellant cannot be accepted.

NCLAT Chennai Upholds Creditors Right To File For Bankruptcy Beyond Threshold Timeline U/S 118 Of IBC

Case Title: Tummala Sri Ganesh Vs. State Bank of India and Anr

Case Number: Company Appeal (AT) (CH) (Ins) No.315/2024

Recently, the NCLAT Chennai dismissed appeals filed by Tummala Sri Ganesh and other applicants. In this case, the issue was with respect to applicants who had furnished personal guarantees for the debt liabilities of Chadalvada Infratech Limited. The principal borrower had defaulted on the repayment of debt and CIRP was invoked in pursuance to which NCLT approved a repayment plan. However, the appellants, without completing the repayment process, made the RP file a report under Section 118 of IBC.NCLAT held that Section 118 of the Insolvency and Bankruptcy Code provides that where an insolvency resolution plan contemplated under the IBC is not filed within the threshold timeline, its mere existence lapses even before the lapse of its natural duration; at which point the right of the creditor to file bankruptcy proceedings vests.

Limitation U/S 61 Of IBC Is To Be Calculated From Date Of E-Filing, Rules Prevalent When Application Is Considered To Be Applied: NCLAT New Delhi

Case Title: Shree Ganapati Power and Transformers. v. Vijeta Projects and Infrastructure Ltd. and Ors

Case Reference: Company Appeal (AT) (Ins.) No. 811 of 2022 & I.A. No. 5695 of 2023

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member), held that the period of limitation for appeal should be counted from the date of e-filing and not from the physical presentation. The tribunal condoned the delay of 3 days in filing the appeal as sufficient cause was shown and it was in accordance with the Standard Operating Procedure.

Obtaining Prior NOC From Stock Exchanges/SEBI Not Mandatory Before Submitting Scheme Of Arrangement For Company In Liquidation: NCLAT New Delhi

Case Title: Nikhil Jain and Ors.v. Anil Goel (Liquidator) and Anr.

Case Reference: Company Appeal (AT) No. 148 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Yogesh Khanna (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), observed that it is not mandatory to obtain No Objection Certificate (NOC) before submitting a scheme of arrangement to revive a company in liquidation under Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) under section 230 of the Companies Act.

Thus, under the Companies Act, there is no requirement for prior NOC from the stock exchanges or SEBI before the Scheme is filed before the Ld. NCLT, and the requirement is only to give notice to the stock exchanges and SEBI once the Scheme is filed with the Ld. NCLT for calling/dispensing with meetings of creditors and members, which has been duly complied with by the Liquidator / Applicant of the Scheme”.Successful Resolution Applicant Entitled Benefit Of Protection U/S 32A IBC To Lift ED's Attachment Over Corporate Debtor's Assets: NCLAT New Delhi

Case Title: Vantage Point Asset Pte. Ltd.v.Gaurav Misra (RP)

Case Reference: Company Appeal (AT) (Insolvency) No. 1495 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), in a crucial judgment observed that the benefit of section 32A of the Insolvency and Bankruptcy Code (IBC) will be extended to the new management of the Alchemist Infra Reality Ltd.(corporate debtor) after the approval of resolution plan. In this case, the tribunal ordered to lift the proper

The Hon'ble Supreme Court has clearly held that Section 32-A has been engrafted in the legislation, which is a legislative scheme and if legislature thought that immunity be granted to the Corporate Debtor or its property, it hardly furnishes a ground for this Court to interfere. The extinguishment of the criminal liability of the Corporate Debtor is apparently important to the new management to make a clean break with the past and start on a clean slate”.

“Clean Slate" Principle Does Not Extend To Liabilities On Date Of E-Auction Sale Of Corporate Debtor As 'Going Concern': NCLAT

Case Name: Shantech International Pvt. Ltd. vs. Devendra Singh

Case No: Company Appeal (AT) (Insolvency) No. 1520 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical member) and Arun Baroka (Technical member) has held that when the claim itself are on the liquidation commencement date in the liquidation process, the argument that extinguishment of claims and liabilities should be granted till the date of sale by e-auction is not in accord with the statutory scheme as delineated by IBBI (Liquidation Process) Regulations, 2016.

[IBC] Pendency Of Civil Suit Doesn't Preclude Admission Of S. 7 Application When Debt & Default Are Proven: NCLAT

Case Title: Navin Chandra Mishra (Suspended Director of CMR Lifesciences Pvt. Ltd.) vs. Nand Kishore Palaha & Ors.

Case Number: Company Appeal (AT) (Insolvency) No. 1851 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Member Technical), Arun Baroka (Member Technical) has held that the pendency of the Civil Suit is no reason for not proceeding to admit the Section 7 Application when the debt and default are proved.

NCLAT Rejects Condonation Of Delay Application Due To Non-Compliance With Limitation Period U/S 61 Of IBC

Case Title: Southern Power Distribution Company of Telangana Ltd. Vs. Kalvakolanu Murali Krishna Prasad RP for Vaksh Steels Pvt. Ltd. and Ors

Case Number: Company Appeal (AT) (CH) (Ins) No.177 /2021(IA Nos. 360 & 362 / 2021)

The National Company Law Appellate Tribunal (NCLAT), Chennai, comprising of Justice Sharad Kumar Sharma, Member (Judicial) and Shri Jatindranath Swain (Technical Member), dismissed an appeal under Section 61 of the Insolvency and Bankruptcy Code (IBC). The appeal was filed by the Southern Power Distribution Company of Telangana Ltd. against Kalvakolanu Murali Krishna Prasad (Resolution Professional for Vaksh Steels Pvt. Ltd.,). The NCLAT observed that the appellant cannot file an application for condonation of delay as it was duly aware of the proceedings well before the expiration of the time and as a result not acting within the prescribed time-period does not allow it to file for condonation of delay.

NCLT

Operational Creditor's Failure To Comply With S.69(2) Of Indian Partnership Act Leads To Rejection Of CIRP Petition: NCLT Hyderabad

Case Title: Amogh Industrial Products Vs. Mirchi Developers Pvt. Ltd

Case Number: CP(IB) No. 103/9/HDB/2024 u/s. 9 of IBC, 2016NCLT Hyderabad in its judgement of Amogh Industrial Products Vs. Mirchi Developers Pvt. Ltd dismissed a Section 9 application filed under the Insolvency and Bankruptcy Code, 2016 by Amogh Industrial Products (Operational Creditors) praying to initiate a Corporate Insolvency Resolution Process (CIRP) against Mirchi Developers Pvt ltd, due to the failure in compliance with Section 69(2) of Indian Partnership Act, 1932.

A firm shall be registered under Section 69(2) of the Indian Partnership Act, 1932, to file a petition for the enforcement of rights under contract. In addition, the petitioners did not produce the register of firms showing the names of its partners.

Related Party Prohibited From Participating In CoC, Cannot Overcome Bar Merely By Assignment Of Debt: NCLT Mumbai

Case Title: Greenshift Initiatives Pvt. Ltd.v.Sonu Gupta (RP)

Case Reference: I.A. 331 of 2024 in C.P.(IB) No. 1122/MB/2021

The National Company Law Tribunal (NCLT), Mumbai Bench , comprising Ms. Reeta Kohli (Judicial Member) and Ms. Madhu Sinha (Technical Member), dismissed an application in which voting rights in the committee of creditors (CoC) was sought in the Corporate Insolvency Resolution Process (CIRP) of Rolta Bi & Big Data Analytics Pvt. Ltd. (corporate debtor). Greenshift Initiatives Private Limited (Assignee) who acquired the debt from a related party of the corporate debtor, filed this application. TheThus, it is evident that firstly the bar is because of the relationship of the parties and secondly the bar is on the person who's holding the debt and not the nature of the debt per-se. That is precisely the reason why the RP has in fact admitted the debt but not allowed the Applicant to be a member of CoC which seems to be justifiable in view of the objective of the law”.

Corporate Debtor Not Responsible For Non-Supply Of Materials By Third Party Being An Agent: Mumbai NCLT

Case Title: Rajendra Kedia (J.M. Steels) vs. Nirav Metals Pvt. Ltd.

Case Reference: CP (IB) No. 186/MB/2024

In a crucial decision, the National Company Law Tribunal (NCLT) Mumbai Bench, comprising Justice V.G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member), dismissed a petition filed by JM Steels (Operational Creditor) under section 9 of the Insolvency and Bankruptcy Code (IBC) against Nirav Metals Pvt. Ltd. (Corporate Debtor). The petition sought to initiate Corporate Insolvency Resolution Process (CIRP) for the default of Rs. 3,63,07,924.89 against the corporate debtor for non-supply of goods.

Interest Cannot Be Raised Unilaterally In Insolvency Petition, Without Prior Intimation To Corporate Debtor: NCLT Bengaluru

Case Title: Janus GBAC Ltd. v. Beloorbayir Biotech Ltd.

Case Reference: CP (IB) No.114/BB/2023

The National Company Law Tribunal (NCLT), Bengaluru, comprising Shri K. Biswal (Judicial Member) and Shri Manoj Kumar Dubey (Technical Member), dismissed a petition under section 9 of the Insolvency and Bankruptcy Code (IBC). The petition was filed by Janus GBAC Ltd. (operational creditor) against Beloorbayir Biotech Ltd. (corporate debtor). The NCLT observed that no interest can be claimed in the petition when it has not been agreed upon in an agreement.

Resolution Professional Becomes Functus Officio After Approval Of Plan, Ceases To Have Authority To File Fresh Application Under IBC: NCLT Mumbai

Case Title: Mr. Ram Ratan Kanoongo v. Mr. Pramod Goenka and Ors.

Case Reference: M.A. 1548 of 2019 in T.P. (IB) 600/MB/2017

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Justice (Retd) Mr. Virendrasingh Gyansingh Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member), observed that Resolution Professional (RP) is not empowered to file an application after the approval of resolution plan. The Tribunal further held that Insolvency and Bankruptcy Board of India (IBBI) should investigate into the conduct of both the RP and respondent 1 to 3 based on the findings of the forensic auditor.

Without Allegations Of Fraud, Objections Raised By Applicant Cannot Be Entertained At Belated Stage After Sale Has Already Been Confirmed: NCLT

Case Title: JSK Estate Pvt. Ltd. v. Mr. Sundaresh Bhat (Liquidator) and Anr.

Case Reference: I.A. No. 5330/2023 in CP(IB) No. 2849(MB)/2018

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), dismissed an application filed under section 60(5) of the Insolvency and Bankruptcy Code (IBC) by a prospective bidder in which e-auction sale of the corporate debtor in liquidation was challenged. The Tribunal observed that the sale was conducted in accordance with Liquidation Regulations, 2016 and objections raised by the applicant were belated and without merit.Ex-Management Of Corporate Debtor Cannot File Proposal U/S 12A During Consideration Of Resolution Plan When Earlier Proposal Was Rejected: NCLT New Delhi

Case Title: Pratham Expofab Pvt. Ltd. and Anr. v. Anil Matta (RP) and Anr.

Case Reference: I.A. – 188/2024 in C.P.(IB)-995 of 2018

The National Company Law Tribunal, New Delhi Bench, comprising Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), held that settlement proposal under section 12A of the Insolvency and Bankruptcy Code (IBC) cannot be considered after the approval of resolution plan. The Tribunal further held that multiple such proposals had already been proposed on previous occasions and all of them were rejected by Committee of creditors (CoC).

Recovery Of Corporate Debtor's Property By Owner/Landlord Is Not Permissible During Moratorium Period: NCLT Mumbai

Case Title: Sudha Apparels Ltd. v. Mr. Ravi Sethia (RP)

Case Reference: Interlocutory Application No. 4147 of 2023 and Intervention Petition No. 27 of 2024 in CP(IB) No. 959(MB)/2022

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), held that the owner or lessor of the property occupied by the corporate debtor is not entitled to the possession during Corporate Insolvency Resolution Process (CIRP). An application under section 60(5) of the Insolvency and Bankruptcy Code (IBC) was filed by Sudha Apparels Limited (applicant) seeking possession of the property and rent amount.

Cannot Interfere With Liquidator's Rejection Of Claims Which Are Tentative, Contingent Or Potential: NCLT Hyderabad

Case Title: Meja Urja Nigam Pvt. Ltd. v. Mr. Sutanu Sinha (Liquidator)

Case Reference: I.A. No.550 of 2021 in C.P. (IB) No. 294/7/HDB/2017

The National Company Law Tribunal (NCLT), Hyderabad Bench, comprising Shri Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member), observed that the Liquidator is responsible for determining the actual dues to be paid from the proceeds of liquidation. Consequently, claims must pertain to specific payable amounts—whether fixed or variable, disputed or undisputed, legal or equitable, secured or unsecured, or arising from a judgment—rather than assumed, uncertain, or hypothetical.Secured Creditor Not Precluded From Filing Petition U/S 95 Of IBC, Even If Security Interest In Mortgaged Property Is Enforced: NCLT Mumbai

Case Title: YES Bank Ltd. v. Mrs. Sakshi Jiwarajka

Case Reference: CP (IB) No. 906/MB/2022 and I.A. No. 3244 of 2024

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), held that merely because a secured creditor has taken action to realise/enforce its security interest in the mortgaged property, the secured creditor is not precluded from initiating insolvency resolution process of the Personal Guarantor unless of course the debt is recovered in full. Pre-Existing Dispute Does Not Bar Operational Creditor From Filing S.9 Application: NCLT Admits CIRP Against Syska LED

Case Title: Sunstar Industries Vs. Syska Led Lights Pvt. Ltd

Case Number: CP (IB)/96/MB/2024

he National Company Law Tribunal Mumbai Bench, Court-II, comprising of Justice Kuldip Kumar Kareer (Member Judicial) and Anil Raj Chellan (Member Technical), admitted a Section 9 petition filed by operational creditor (Sunstar Industries) against the Corporate Debtor (Syska LED Lights Pvt. Ltd) stating that initiation of proceedings before the Micro, Small and Medium Enterprise Facilitation Council (MSEFC) in Delhi, and a complaint under Section 138 of the Negotiable Instruments Act, 1881 did not preclude it from filing a Section 9 application under the Insolvency and Bankruptcy Code, 2016.Articles

Abatement Of Proceedings Initiated Under Section 95 Of Insolvency And Bankruptcy Code, 2016 On Death Of Personal Guarantor

Another facet that may arise in future and require indulgence of the forums is the time/stage of death of the personal guarantor and its impact on the ongoing proceedings. Let us illustrate this facet further with a hypothetical situation. Suppose the death of the personal guarantor occurs after the Adjudicating Authority passes an order approving the repayment plan i.e. at the stage of implementation of the repayment plan.