NCLT Has Discretion To Not Admit Financial Creditor's CIRP Application? Supreme Court Allows Open Court Hearing For Review

Case Title: Axis Bank Ltd versus Vidarbha Industries Power Ltd

Case No.: RP (Civil) 1043/2022

The Supreme Court Bench comprising of Justice Indira Banerjee and Justice MM Sundersh allowed open court hearing for the review petition filed against the judgment in Vidarbha Industries Power Ltd. vs Axis Bank Limited which held that the National Company Law Tribunal has discretion to not admit the insolvency application filed by a financial creditor even if the corporate debtor is in default. The Petition is listed for hearing in open court on September 19, 2022.

The judgment delivered in Vidarbha Industries Case on July 12, 2022 had held that it is not mandatory for the Adjudicating Authority to admit an application to initiate Corporate Insolvency Resolution Process even if a debt existed and the Corporate debtor is in default. The Adjudicating Authority (NCLT) would have to exercise its discretion to admit and initiate CIRP on satisfaction of the existence of a financial debt and default on the part of the Corporate Debtor in payment of the debt, unless there are good reasons not to admit the petition.

NCLAT

Unregistered Sale Cannot Be The Basis For Claim On Immovable Property: NCLAT Delhi

Case Title: Smt. Sabita A. Biswa v Shri Vinodkumar Pukhraj Ambavat

Case No.: Company Appeal (AT) (Insolvency) No. 1056 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has declined to entertain the claim of a creditor based on an unregistered and unstamped sale deed which was only executed before the Notary and has held that such document cannot be basis for any claim with respect to the purchase of immovable property.

NCLT

SEBI Order No Bar To Initiation Of CIRP; NCLT Mumbai Initiates Insolvency Proceedings Against Pancard Clubs

Case Title: Mr. Nitin Suresh Satghare & Ors. v Pancard Clubs Limited

Case No.: CP (IB) 4578/MB/C-I/2018

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P. N. Deshmukh (Retd.) (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), has initiated Corporate Insolvency Resolution Process ("CIRP") against Pancard Clubs Ltd., while observing that an Order passed by Securities Exchange Board of India ("SEBI") is no bar for initiation of CIRP under the IBC.

Time Schedule Has A Purpose; NCLT Kolkata Declines To Entertain The Bid Submitted After The Time

Case Title: State Bank of India v Ess Dee Aluminum Limited

Case No.: C.P (IB) No.1284/KB/2019

The National Company Law Tribunal ("NCLT"), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has declined to entertain a revised bid received after the due time fixed by the Liquidator in the bidding notice, while observing that time lines are fixed with a definite purpose and the different stages of bidding process should conclude at the scheduled time.

NCLT Delhi Holds Suspended Directors Liable For Running Fraudulently

Case Title: M/s Concord Infrastructure Pvt. Ltd. v M/s Shubhkamna Buildtech Pvt. Ltd.

Case No.: C.P. No. IB-1059/ND/2018

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Dharminder Singh (Judicial Member) and Dr. Binod Kumar Sinha (Technical Member), has approved the resolution plan submitted by Mr. Sunder Kumar Singhal and Mr. Sunil Kumar Agarwal for M/s Shubhkamna Buildtech Pvt. Ltd. The Bench held the Suspended Directors of Subhkamna Buildtech liable under Section 66 of the IBC, for running the business in a fraudulent manner and having siphoned off the funds of the company to the tune of Rs. 106.19 Crores. The Bench has directed the Suspended Directors to contribute Rs. 106.19 Crores, which would be distributed to the Financial Creditors proportionately.

NCLT Cuttack To Hear Cases Only On Monday And Tuesday Until Further Orders

File No. 10/03/2022-NCLT

The National Company Law Tribunal, Cuttack Bench, shall conduct proceedings on only Monday and Tuesday in view of NCLT Circular dated 14.09.2022 and matters shall be heard through video conferencing. The NCLT Cuttack Bench was reconstituted vide a notification dated 10.10.2021 and the Circular dated 14.09.2022 has been issued in partial modification of the said notification. At present the NCLT Cuttack Bench comprises of:

NCLT Cuttack Bench

1. Shri P. Mohan Raj (Judicial Member)
2. Shri Satya Ranjan Prasad (Technical Member)

NCLT Kochi Bench Re-Constituted,Proceedings To Be Conducted Only On Wednesday, Thursday And Friday Until Further Orders

File No. 10/03/2022-NCLT

The National Company Law Tribunal, Kochi Bench, has been re-constituted vide a Circular dated 14.09.2022, issued by NCLT as per Section 419(3) of the Companies Act, 2013. The new NCLT Kochi Bench shall comprise of:

NCLT Kochi (First Half)

1. Shri P. Mohan Raj (Judicial Member)
2. Shri Satya Ranjan Prasad (Technical Member)

The Circular has been issued in partial modification of Order of even number dated 01.07.2022 and is applicable from 15.09.2022 till further orders. The reconstituted Bench shall conduct proceedings on every Wednesday, Thursday and Friday only and the matters shall be heard through Video Conferencing.

Breach Of Settlement Agreement Not A Ground To Trigger CIRP: NCLT Delhi Rejects Application For Revival Of Petition

Case Title: Bajaj Rubber Company Pvt. Ltd. v Saraswati Timber Pvt. Ltd.

Case No.: C.P. (IB) 1441 (ND)/2018

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Dharminder Singh (Judicial Member) and Shri L.N. Gupta (Technical Member), has declined to revive a petition filed under Section 9 of IBC, which was earlier withdrawn due to Settlement Agreement being entered upon between the parties and later settlement had failed. The Bench reiterated that breach of terms and conditions of a Settlement Agreement does not come under the purview of Operational Debt under IBC and the same cannot be a ground to trigger CIRP.

The Bench placed reliance on the judgments of NCLT New Delhi in M/s Alhuwalia Contracts (India) Ltd. v M/s Logix Infratech Pvt. Ltd., IB 882/ND/2022, and in Nitin Gupta v International Land Developers Pvt. Ltd., IB 507/ND/2020, wherein it has been held that unpaid installment as per settlement agreement cannot be treated as an operational debt under Section 5(21) of IBC.

NCLT Chennai Bench Re-Constituted, Matters To Be Heard Through Video Conferencing

File No.: 10/03/2022-NCLT

The National Company Law Tribunal, Chennai Bench, has been re-constituted vide a Circular dated 14.09.2022, issued by NCLT as per Section 419(3) of the Companies Act, 2013. The new NCLT Chennai Benches shall comprise of:

NCLT Chennai, Court Room No. 1 (Second Half)

1. Justice Ramalingam Sudhakar (President)
2. Shri Sameer Kakar (Technical Member)

NCLT Chennai, Court Room No. 2 (First Half)

1. Dr. Deepti Mukesh (Judicial Member)
2. Shri Sameer Kakar (Technical Member)

The Circular has been issued in partial modification of Order of even number dated 01.07.2022 and is applicable from 19.09.2022 till further orders. The reconstituted Bench shall take up matters through Video Conferencing.

NCLT Delhi Bench Re-Constituted, Matters To Be Heard Through Video Conferencing

File No.: 10/03/2022-NCLT

The National Company Law Tribunal, New Delhi Bench, has been re-constituted vide a Circular dated 14.09.2022, issued by NCLT as per Section 419(3) of the Companies Act, 2013. The new NCLT New Delhi Benches shall comprise of:

NCLT New Delhi, Court Room No. 2 (First Half)

1. Shri Bachu Venkat Balaram Das (Judicial Member)
2. Shri L.N. Gupta (Technical Member)

NCLT New Delhi, Court Room No. 3 (Second Half)

1. Shri Bachu Venkat Balaram Das (Judicial Member)
2. Dr. Binod Kumar Sinha (Technical Member)

The Circular has been issued in partial modification of Order of even number dated 24.08.2022 and is applicable from 15.09.2022 till further orders. The reconstituted Bench shall take up matters through Video Conferencing.

IBBI

Fee Payable To Insolvency Professional; IBBI Notifies Third Amendment To CIRP Regulations

Notification No.: No. IBBI/2022-23/GN/REG091

The Insolvency and Bankruptcy Board of India ("IBBI") has amended the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") for a third time and has notified the amendment on 13.09.2022. The amendment has introduced Clause 34B and Schedule II to the CIRP Regulations which have brought about the following changes:

1. The fee of the interim resolution professional or the resolution professional, appointed on or after 1^st October 2022 shall be decided by the applicant or committee in accordance with the said amendment regulations.
2. An insolvency professional shall be paid minimum fixed fee in the range of One Lakh Rupees to Five Lakh Rupees, per month, depending on the quantum of claims admitted, as specified under Table-1 of Schedule-II of the said amendment regulations. However, the applicant or committee may decide to fix higher amount of fees than the said minimum fixed fee, after taking into consideration market factors such as size and scale of business operations of corporate debtor, business sector in which corporate debtor operates, level of operating economic activity of corporate debtor and complexity related to process.
3. For the resolution plan approved by the committee on or after 1^st October 2022, the committee may decide to pay, after approval of such resolution plan by the Adjudicating Authority on commencement of payment to creditors by the resolution applicant, performance-linked incentive fee, not exceeding a total of five crores of rupees.

IBBI Notifies Second Amendment To Insolvency Professional Regulations

Notification No.: No. IBBI/2022-23/GN/REG092

The Insolvency and Bankruptcy Board of India ("IBBI") has amended the IBBI (Insolvency Professionals) Regulations, 2016 ("IP Regulations") for a second time and has notified the amendment on 13.09.2022. The amendment has added Clause 26A to the IP Regulations which states that an Insolvency Professional shall not accept /share any fees or charges from any professional and/or support service provider who are appointed under the processes.