Can Provisional Attachment Under PMLA Be Passed After Initiation Of CIRP Under IBC? Supreme Court To Consider

Case Title: Ashok Kumar Sarawagi v Enforcement Directorate & Anr.

Case no.: Special Leave Petition (Civil) Diary No(S). 30092/2022

The Supreme Court Bench comprising of Chief Justice U.U. Lalit and Justice Bela M. Trivedi, has issued notice in a petition where it is to be decided whether an order of provisional attachment passed under Prevention of Money Laundering Act, 2002 ("PMLA") would prevail over Insolvency and Bankruptcy Code, 2016 ("IBC") or not, if the said order has been passed subsequent to initiation of Corporate Insolvency Resolution Process ("CIRP"). The Supreme Court has issued notice on the Special Leave Petition and has directed the Parties to maintain status quo with respect to the proceedings in question. The question before the Bench is whether a provisional attachment order passed under PMLA subsequent to initiation of CIRP would prevail over IBC or not.

NCLAT

Change In Composition Of COC Will Not Affect Its Prior Decisions: NCLAT New Delhi

Case Title: DBS Bank v. Rakesh Kumar Jain

Case No.: CA (AT) (Ins) No. 540/2021

The National Company Law Appellate Tribunal bench comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member) has held that the change in composition of the Committee of Creditors (COC) of the Corporate Debtor will not affect its previous decision and the same will be binding on the newly included members of the COC.

NCLAT Delhi Upholds Dismissal Of Section 9 Petition In Absence Of Cogent Evidence To Prove Supply Of Goods

Case Title: M/s Mahadev Trading Company v M/s Supreet Chemicals Pvt. Ltd.

Case No.: Company Appeal (AT) (Ins.) No. 149 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Kanthi Narahari (Technical Member), has held that in absence of cogent evidence to prove that goods were supplied to the Corporate Debtor, a petition filed under Section 9 of IBC by Operational Creditor cannot be admitted.

Default During Section 10A Period Cannot Be Clubbed To Meet Threshold Requirement Under Insolvency And Bankruptcy Code, 2016: NCLAT New Delhi

Case Title: Plus Corporate Ventures Pvt. Ltd v. Transnational Growth Fund Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1270 of 2022

The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Ashok Bhushan and Mr. Barun Mitra, while deciding an appeal filed by the Operational Creditor against the order dated 17.08.2022 passed by NCLT, New Delhi held that amount of default occurred during the Section 10A period (24.03.2020-23.03.2021) of the Insolvency & Bankruptcy Code, 2016 (IBC/Code) cannot be clubbed by the Operational Creditor to meet the threshold requirement of One Crore under Section 4 of the Code. NCLAT also noted that there are two events of default which are outside the Section 10A period but their amount is less than one crore and thus, the application under Section 9 will not be maintainable and accordingly, dismissed the appeal filed by the Appellant.

Provident Fund Dues Are Not Assets Of Corporate Debtor, They Have To Be Paid In Full: NCLAT Delhi

Case Title: Assam Tea Employees Provident Fund Organization v Mr. Madhur Agarwal & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 262 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that provident fund dues are not the assets of the Corporate Debtor and they have to be paid in full. The Bench placed reliance on its recent judgment in Regional P.F. Commissioner v Ashish Chhawchharia, Resolution Professional for Jet Airways (India) Ltd. & Anr., Company Appeal (AT) Ins. No. 987 of 2022, wherein it has been held that provident fund dues have to be paid in full. It was observed that the Resolution Professional's contention that Appellant is an Operational Creditor and both Operational Creditor and Financial Creditor have taken haircut is not acceptable.

AA Cannot Enquire Into Justness Of Rejection Of Resolution Plan By COC: NCLAT Chennai

Case Title: Dr. C. Bharath Chandran v Ms. Sabine Hospital and Research Centre & Ors.

Case No.: Company Appeal (AT) (CH) (Ins) No. 320 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Mr. Naresh Salecha (Technical Member), has held that the Adjudicating Authority has no authority to enquire into the 'justness' of Committee of Creditor's decision to reject a Resolution Plan. When a rejected plan is placed before the Adjudicating Authority, then it is expected to do nothing more but to initiate Liquidation process under Section 33(1) of IBC.

Coc Initiates Liquidation, Appeal Against Initiation Of CIRP Becomes Infructuous: NCLAT Delhi

Case Title: Mr. Rakshit Dhirajlal Doshi v IDBI Bank Limited

Case No.: Company Appeal (AT) (Insolvency) No. 296 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that an appeal challenging the order initiating CIRP becomes infructuous if the Committee of Creditors decided to liquidate the Corporate Debtor and accordingly an application for liquidation is filed. "After hearing the parties and going through the pleadings made on behalf of the parties, we agree with the reasons given by the Adjudicating Authority while passing the impugned order and as the CoC has recommended for liquidation of the Company for which I.A. is pending before the Adjudicating Authority, hence this Appeal has become infructuous."

Advance Paid Towards Service Is Operational Debt: NCLAT Delhi

Case Title: Chipsan Aviation Private Limited v Punj Llyod Aviation Limited

Case No.: Company Appeal (AT) (Insolvency) No. 261 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that an advance paid towards a service falls within definition of operational debt, even if there was no privity of contract between the Parties.

Disputes Pertaining To Contractual Issues Not To Be Resolved In Section 9 IBC Proceedings: NCLAT Delhi

Case Title: a'XYKno Capital Services Pvt. Ltd. v Rattan India Power Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 913 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that disputes pertaining to contractual issues are not to be resolved in proceedings under Section 9 of IBC.

Award In Favour Of Financial Creditor Already In Execution, Section 7 Petition Must Be Rejected: NCLAT Delhi

Case Title: Shaikh Mohammed Tariq v Aegis Forging Ltd.

Case No.: Company Appeal (AT) (Ins.) No. 1342 of 2022 & I.A. No. 4107, 4165 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that when an arbitral award has been passed in favour of Financial Creditor for the alleged financial debt and the award has been put in execution, then the same is good enough reason to refuse admission of Section 7 application.

NCLAT Delhi Stays Insolvency Process Against BPTP LTD., As Parties Enter Settlement

Case Title: Sudhanshu Tripathi v M/s RBCL Projects Pvt. Ltd.

Case No.: Comp. App. (AT) (Ins.) No. 1382 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Judicial Member) and Shri Barun Mitra (Technical Member), has stayed the initiation of Corporate Insolvency Resolution Process ("CIRP") against BPTP Ltd. by the Adjudicating Authority, as Parties have entered settlement. BPTP Ltd. is a renowned real estate company, having several residential and commercial projects at NOIDA, Gurugram and Faridabad.

Tribunal Not To Enter Into Evidence And Record Findings Like A Civil Court: NCLAT Delhi

Case Title: Avneet Goyal v Radha Kishan Gobind Ram Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1388 of 2022

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr. Alok Srivastava (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that Tribunal does have not to enter into evidence and record findings like a Civil Court.

NCLT

No Notice Is Required For Personal Guarantor At The Stage Of Appointment Of IRP: NCLT Amravati

Case Title: Central Bank of India v Mr.Kothapatti Raju

Case No.: CP (IB) No. 89/95/AMR/2022

The National Company Law Tribunal ("NCLT"), Amravati Bench, comprising of Justice Telaprolu Rajani (Judicial Member), has held that in terms of Section 97 and Section 100 of IBC, no notice or right of audience can be given to the Personal Guarantor at a stage before appointing the Interim Resolution Professional. It was observed that it is only under Section 100(3) of IBC that the Adjudicating Authority shall provide a copy of the order passed under Section 100(1) to the Creditors. Hence, in terms of Section 97 & Section 100 of IBC, no right of audience can be given to the Personal Guarantor at a stage before appointing the Interim Resolution Professional (IRP).

Past Tax Liabilities That Are Not Part Of Resolution Plan Shall Stand Extinguished: NCLT Mumbai

Case Title: Subodh Kumar Agrawal v Taguda Pte. Limited

Case No.: CP(IB)No. 1790/MB/2017

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), has held that all past liabilities arising out of any levies/tax dues to any government authorities, etc., which accrued during CIRP period and are not part of the Resolution Plan, shall stand extinguished from the date of approval of the Resolution Plan. The Bench accordingly waived off the income tax and GST liabilities of the Corporate Debtor that had accrued after initiation of CIRP.

Continuation Of RP Till Appointment Of Liquidator Doesn't Contravene IBC: NCLT Chandigarh

Case Title: Brij Lal Ashok Kumar v Tara Chand Rice Mills Pvt. Ltd.

Case No.: CP (IB) No.121/Chd/Hry/2017

The National Company Law Tribunal ("NCLT"), Chandigarh Bench, comprising of Shri Harnam Singh Thakur (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), has held that in absence of any order from the Adjudicating Authority appointing a liquidator, the Resolution Professional's continuation in its position is not in contravention of IBC. The Bench also directed the Liquidator to pay the professional fees to the Resolution Professional for such unauthorized period of service.

Union Govt. Appoints Judicial & Technical Members For NCLT

Circular No. 18/25/2022-EO(SM-II)

The Government of India vide its notification dated 05.11.2022 approved the appointment of 9 judicial members and 6 technical members in the National Company Law Tribunal (NCLT).

Judicial Members

1. T Krishna Valli, Retd. Judge, Madras High Court
2. Vikas Kumar Srivastav, Retd. Judge, Allahabad High Court
3. Kuldeep Kumar Kareer, Retd. District Judge
4. Vishesh Sharma, Retd. District Judge
5. Adv. Ashok Kumar Bhardwaj
6. Adv. Praveen Gupta
7. Adv. Mahendra Khandelwal
8. Bidisha Banerjee, Judicial Member, CAT
9. Sanjiv Jain, Dist. Judge

Technical Members

1. Prabhat Kumar, CA
2. Charan Singh, Former Executive Director, UCO Bank
3. Anu Jagmohan Singh, Former Member, CBDT
4. Ashish Verma, Retd. Principal Chief Commissioner of Income Tax
5. Atul Chaturvedi, Retd. IAS
6. Madhu Sinha, Former Director, Citi Bank, India.

When Corporate Debtor Does Not Create A Gratuity Fund, No Gratuity Is Payable: NCLT Chandigarh

Case Title: Small Industries Development Bank of India (SIDBI) v International Mega Food Park Limited

Case No.: CP (IB) No.174/Chd/Chd/2018

The National Company Law Tribunal ("NCLT"), Chandigarh Bench, comprising of Shri Harnam Singh Thakur (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), has held that if the Corporate Debtor had not created a Gratuity Fund, then the Resolution Professional cannot be directed to pay Gratuity to the employee(s). Further, the salary and leave encashment of employees accrued during CIRP period fall within the definition of insolvency resolution process cost under Section 5(13)(c) of IBC.

NCLT Delhi Initiates Insolvency Process Against Ansal Properties & Infrastructure Ltd.

Case Title: Bibhuti Bhushan Biswas & Ors. v M/s Ansal Properties and Infrastructure Ltd.

Case No.: IB-330(ND)/2021

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri L.N. Gupta (Technical Member), has initiated Corporate Insolvency Resolution Process ("CIRP") against Ansal Properties and Infrastructure Ltd. on a Section 7 petition filed by homebuyers under IBC. Mr. Ashwani Kumar Singla has been appointed as the Interim Resolution Professional (IRP).

Nine Members Took Oath In National Company Law Tribunal, Strength Rises To 37

Nine new members take oath as the members of the National Company law Tribunal on 18.11.2022. The oath was administered to the newly appointed members by Chief Justice (Retd.) Ramalingam Sudhakar, President, NCLT at Principal Bench, NCLT, New Delhi.

Following members took oath as the Member (Judicial) of NCLT

a. Mr. Kuldeep Singh Kareer

b. Ms. Bidisha Banerjee

c. Mr. Praveen Gupta

d. Mr. Arun Kumar Bhardawaj

Following members took oath as Member (Technical) of NCLT

a. Mr.Atul Chaturvedi

b. Ms. Anu Jagmohan Singh

c. Mr.Ashish Verma

d. Mr.Charan Singh

e. Mr. Prabhat Kumar

The notification dated 05.11.2022 has notified the appointment of 15 members but today only 9 members were administered oath. The appointment of these members rises the working strength of NCLT to 37 members as against the sanctioned strength of 63 members.

NCLT Mumbai Initiates Insolvency Process Against M/S S Kumars Ltd.

Case Title: Edelweiss Asset Reconstruction Co. Ltd. v M/s. S. Kumars Limited

Case No.: Company Petition No. (IB) -3707 (MB)/2019

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Mr. Shyam Babu Gautam (Technical Member), had initiated Corporate Insolvency Resolution Process ("CIRP") against the textile manufacturing company M/s S Kumars Ltd. M/s S Kumars Ltd. ("Corporate Debtor") is a renowned textile manufacturing company based in Maharashtra, which has been in business for over 70 years. Further, Mr. Anjan Bhattacharya has been appointed as the Interim Resolution Professional.

NCLT Hyderabad Initiates Insolvency Process Against Gayatri Projects Ltd., A Gayatri Group Company

Case Title: State Bank of India v M/s Gayatri Projects Limited

Case No.: CP(IB) No. 308/07/HDB/2022

The National Company Law Tribunal ("NCLT"), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula, (Judicial Member) and Mr. Satya Ranjan Prasad (Technical Member), has initiated Corporate Insolvency Resolution Process (CIRP) against Gayatri Projects Ltd., which is a part of the Gayatri Group. Gayatri Projects Ltd. ("Corporate Debtor") is the flagship company of the Gayatri Group that has interests in infrastructure, power, hospitality, real estate and industry. The Corporate Debtor is engaged in the construction of major Civil Works including Concrete/Masonry Dams, Earth Filling Dams, National Highways, Bridges, Canals, Aqueducts, Ports, etc. across India. Mr. Sai Ramesh Kanuparthi has been appointed as the Interim Resolution Professional (IRP).

NCLT Hyderabad Recalls Order Initiating CIRP In View Of Concealment of Facts By Financial Creditor

Case Title: Canara Bank v Feno Plast Limited

Case No.: CP (IB) No. 10/07/HDB/2022

The National Company Law Tribunal ("NCLT"), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula, (Judicial Member) and Mr. Satya Ranjan Prasad (Technical Member), has recalled its Order whereby CIRP was initiated against the Corporate Debtor, as the said Order was obtained by the Financial Creditor over misrepresentation before the Adjudicating Authority. Reliance was placed on the Supreme Court judgment in United India Insurance Co. Ltd. v Rajendra Singh, wherein it was held that, "No Court or Tribunal can be regarded as powerless, to recall its own order, if it is convinced that the order was wangled through fraud or misrepresentation of such a dimension as would affect the very basis of the claim".

IBBI

IBBI Amends Model Bye-Laws Regulations For Insolvency Professional Agencies

Notification No.: IBBI/2022-23/GN/REG101

The Insolvency and Bankruptcy Board of India ("IBBI") has amended the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 ("Model Bye laws Regulations") for a second time vide Gazette notification dated 31.10.2022.

The Model Bye Laws Regulations lay down the governance structure and provides for model bye laws of the Insolvency Professional Agencies (IPA). The IBBI had issued three circulars, namely, (i) Circular No. IP/005/2018 dated 16.01.2018 specifying the format for disclosure of relationship by the insolvency professional; (ii) Circular no. IPA/009/2018 dated 19.04.2018 mandating IPAs to submit Annual Compliance Certificate in the format given in the circular; and (iii) Circular No. IBBI/IPA/43/2021 dated 28.07.2021 specifying the list of contraventions by IP and the amount of penalty to be imposed by IPAs. The second amendment incorporates the aforesaid three Circulars in the amended Model Bye Laws Regulations and the said circulars stand rescinded.

IBBI Rescinds Circulars Pertaining To Insolvency Professionals

Circular No.: IBBI/IP/55/2022

The Insolvency and Bankruptcy Board of India ("IBBI") vide its circular dated 09.11.2022 has rescinded its certain circulars pertaining to Insolvency Professionals, as these circulars now form a part of the IBBI (Insolvency Professionals) Regulations, 2016; IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016; and the IBBI (Information Utilities) Regulations, 2017. The IBBI opined that the concerned circulars were no longer required on account of being already provided in the Insolvency Professionals Regulations, Model Bye-Laws Regulations, and the Insolvency and Information Utilities Regulations. These circulars have been rescinded with immediate effect.

HIGH COURT

Interim Moratorium Under Section 96 Of Insolvency & Bankruptcy Code, 2016 Is Limited To Particular Guarantor And Will Not Protect The Other Personal Co-Guarantors Of Same Debt: Delhi High Court

Case Title: Axis Trusteeship Services Limited v. Brij Bhushan Singhal & Anr.

Case No.: 2022 LiveLaw (Del) 1050

The Delhi High Court bench comprising of Justice Amit Bansal while dealing with two summary suits filed by creditors of Bhushan Steel limited against the ex-promoters of Bhushan Steel namely Brij Bhushan Singhal and Neeraj Singhal for recovery of money, held that the interim moratorium under Section 96 of the Insolvency & Bankruptcy Code, 2016 is specific to all debts of a particular debtor and will not be applicable to other personal co-guarantors.

Refusal To Register As IP Due To Low Cibil Score And NI Act Proceedings, Gujarat High Court Sets Aside Order

Case Title: Gundeep Singh Sood v Insolvency Professional Agency Of Institute Of Cost Accountants Of India.

Case No.: R/Special Civil Application No.16410 Of 2021.

The Gujarat High Court, Ahmedabad Bench, comprising of Justice Biren Vaishnav, , has set aside an order passed by IPA ICAI refusing registration to an applicant on the ground of low CIBIL Score and pending proceedings under Negotiable Instruments Act, 1881. The Bench has directed the IPA ICAI to pass a fresh order, by taking into consideration the fact that Petitioner's CIBIL score was low due to its engagement as a Director in the Companies.