IBC | When Matter Heard But No Order Pronounced On The Same Day, Limitation To Commence From The Date When Order Gets Uploaded: Supreme Court

Case Title: Sanjay Pandurang Kalate v Vistra ITCL (India) Limited and Others

Case No.: Civil Appeal Nos 7467-7468 of 2023

The Supreme Court bench comprising Chief Justice of India Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that when the NCLT hears a matter on a particular date but does not pronounce the order on the same date, then the limitation for filing an appeal from such order before the NCLAT under Section 61 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), would commence from the date when the Order of NCLT gets uploaded.

However, in cases where matter was heard and order was pronounced on the same day by the NCLT, limitation would commence from the date of pronouncement of order and not its upload.

The NCLT heard a matter on 17.05.2023 but no order was pronounced or passed. The order was uploaded on 30.05.2023. The Appellant filed an appeal against the NCLT order. before NCLAT The issue was whether limitation under Section 61(2) of IBC would commence from 17.05.2023 or 30.05.2023.

The bench while differentiating between 'hearing' of a case and 'pronouncement' of order in view of NCLT Rules 2016, and has held that the time for filing an appeal would commence only when the order appealed from was uploaded, since prior to that date no order was pronounced.

IBC | When Matter Heard On A Particular Date But Order Pronounced Later, NCLT Not To Affix Date Of Hearing On Order: Supreme Court

Case Title: Sanjay Pandurang Kalate v Vistra ITCL (India) Limited and Others

Case No.: Civil Appeal Nos 7467-7468 of 2023

The Supreme Court bench comprising Chief Justice of India Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that when a matter is heard by the NCLT on a particular date but the order is pronounced on another date, then NCLT must refrain from affixing the date of hearing on the order. The requirement of pronouncement of order cannot be dispensed with, since under the NCLT Rules, 2016 there is a distinction between 'hearing' and 'pronouncement'.

The NCLT heard a matter on 17.05.2023 but no order was pronounced. The order was uploaded on 30.05.2023. The Appellant filed an appeal against the NCLT order before NCLAT under Section 61(2) of the Insolvency and Bankruptcy Code, 2016 (“IBC”), The issue was whether limitation under Section 61(2) of IBC would commence from 17.05.2023 or 30.05.2023.

The bench observed that,“To avoid situations such as these, in cases where the matter has been heard on a particular day but the order is pronounced on a later date, the NCLT must refrain from affixing the date of hearing on the order. Such an approach would be a violation of the NCLT Rules, which create a distinction between hearing and pronouncement and do not allow the NCLT to dispense with the requirement of pronouncement.”

The Bench has also appreciated the NCLAT Chairperson, Members and Registry for taking pro-active steps towards the observations made in Sanket Kumar Agarwal v. APG Logistics Private Limited, 2023 LiveLaw (SC) 406, wherein it was observed that filing of physical copies is not mandatory when e-filing has been done. “Such proactive action by tribunals is essential to ensure that the move towards a modernized and technology-friendly judiciary trickles down to every judicial forum across the country.”

Sec 240A IBC | Even If MSME Registration Obtained Post Commencement Of CIRP, Promoter Eligible To Submit Resolution Plan: Supreme Court

Case Title: Hari Babu Thota

Citation: 2023 LiveLaw (SC) 1051

The Supreme Court bench comprising Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia, has held that the Promoter of a Corporate Debtor is eligible to submit a resolution plan in terms of Section 240A of the Insolvency and Bankruptcy Code, 2016 (“IBC”), even if the Corporate Debtor was registered as Micro Small Medium Enterprise (“MSME”) after commencement of Corporate Insolvency Resolution Process (“CIRP”).

The Bench has set aside an order passed by the National Company Law Appellate Tribunal (“NCLAT”), wherein the Promoter of a MSME Corporate Debtor was declared ineligible to submit a plan on the premise that the MSME certificate was obtained post commencement of CIRP.

IBC | Cut-Off Date To Determine Resolution Applicant's Eligibility Under S.240A Is Date Of Submitting Resolution Plan: Supreme Court

Case Title: Hari Babu Thota v. Other

Citation: 2023 LiveLaw (SC) 1051

The Supreme Court bench comprising Justice Sanjay Kishan Kaul and Justice Sudhanshu Dhulia, has held that for the purpose of Section 240A of Insolvency and Bankruptcy Code, 2016 (“IBC”), the cut-off date to determine the eligibility of a resolution applicant to submit a resolution plan, is the date on which the resolution plan was submitted and not the date on which Corporate Insolvency Resolution Process (“CIRP”) commenced.

The Bench has set aside an order passed by the National Company Law Appellate Tribunal (“NCLAT”), wherein the Promoter of a MSME Corporate Debtor was declared ineligible to submit a plan on the premise that the MSME certificate was obtained post commencement of CIRP, by relying on the ratio in Digamber Anand Rao Pingle v Shrikant Madanlal Zawar & Ors., Comp. App. (AT) (Ins.) No.43-43A/2021.

IBC- Properties Sold In Auction Sale Before Declaration Of Moratorium Can't Be Treated As Liquidation Asset: Supreme Court

Case Title: Haldiram Incorporation Pvt. Ltd. v Amrit Hatcheries Pvt. Ltd.

Citation: 2023 LiveLaw (SC) 1029

The Supreme Court bench comprising Justices Aniruddha Bose and Justice Vikram Nath, has observed that the properties of a defaulting borrower sold in an auction sale could not be treated as liquidation assets if the sale was concluded before the declaration of a moratorium under the Insolvency and Bankruptcy Code, 2016 (“IBC”).

The Bank had advanced loan to Corporate Debtor and the latter mortgaged two sets of properties to the bank. On default of payment, one of the properties were sold to the Auction Purchaser via auction sale. While the Auction Purchaser completed the payment on 16.08.2019, Corporate Debtor was admitted into CIRP on 20.08.2019. This also resulted in the declaration of a moratorium by the NCLT.

The NCLT held the issue of the sale certificate and handing over of the property as illegal and the subject property should continue to be assets of the Corporate Debtor. The NCLT had proceeded on the basis that sale was not concluded. Thus, while commencing the resolution process, the Liquidator was directed to take possession of the subject properties. When challenged, the NCLAT dismissed the appeal. The Supreme Court has set aside the order passed by the NCLAT.

NCLAT

No Provision In IBC For Upfront Payment To Dissenting Financial Creditors On Resolution: NCLAT Delhi

Case Title: Puro Naturals JV v Warana Sahakari Bank & Ors.

Case No.: Company Appeal (AT) (Insolvency) Nos.661-663 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that there is no provision under IBC which requires the Successful Resolution Applicant to make upfront payment to Financial Creditors who dissented to the resolution plan.

The resolution plan proposed to make upfront payment to assenting Financial Creditors within 90 days, whereas the payment to dissenting Financial Creditors was to be made in three years. The dissenting Financial Creditor contended that they should be paid upfront. The Bench held as under:

“There is no provision which can be pointed out, which requires Successful Resolution Applicant to make upfront payment to the dissenting Financial Creditors. What is required by law is the payment “in priority over the Financial Creditors who voted in favour of the plan”.”

NCLAT Delhi: Period Of Limitation For Filing An Appeal U/S 61 Of IBC Starts From Date Of The Rectification Order; Rectification Order Merges With The Original Order

Case Title: Ashok Tiwari vs Tattva & Mittal Lifespaces Private Limited

Case No.: Company Appeal (At) (Insolvency) No. 729 Of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr Ajai Das Mehrotra (Technical Member), has held that the rectification Order of NCLT merges with the Original Order and the period of Limitation for filing an appeal under Section 61 of IBC starts from the date of the rectification Order.

NCLAT Delhi: National Financial Reporting Authority Has Overriding Powers To Penalise CAs For Professional Misconduct

Case Title: Mr Harish Kumar T.K vs National Financial Reporting Authority

Case No.: COMPANY APPEAL (AT) NO. 87 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member), has upheld the penalty imposed by the National Financial Reporting Authority (“NFRA/Respondent”) on the auditors of Dewan Housing Finance Corporation Ltd (“DHFL”). The ruling confirms that NFRA has the right to issue a penalty retrospectively when there is misconduct.

NCLAT clarified that NFRA holds superior and overriding powers over the Institute of Chartered Accountants of India (“ICAI”) in cases related to the professional misconduct of Chartered Accountants.

“NFRA has superior and overriding powers in matters relating to professional misconduct of the Chartered Accountants in terms of Section 132 of Companies Act, 2013 … We may conclude NFRA has been consciously and deliberately given superior authority over ICAI on oversight of auditors and in disciplinary matters as stipulated in Section 132 of Companies Act, 2013 After taking into consideration the background for forming NFRA, the judgment of the Apex Court, proven scams, need to restore shaken confidence of public and investors at large and prevent any adverse impact on Indian economy, we hold that NFRA has clear and required retrospective jurisdiction over the alleged offences by delinquent Chartered Accountants for period prior to formation of NFRA or prior to coming into effect relevant portion of Section 132 of Companies Act, 2013,”

NCLAT New Delhi: Raising Of Amount Via Share Subscription-Cum-Shareholders Agreement Is A Commercial Borrowing And Constitutes 'Financial Debt' Under IBC

Case Title: Sanjay D. Kakade vs. HDFC Ventures Trustee Company Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.481 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that raising of amount through Share Subscription-cum-Shareholders Agreement is a commercial borrowing and constitutes 'Financial Debt' under IBC.

NCLAT New Delhi: Workers' Claim Through Sub-Contractor Can't Be Treated On Par With Corporate Debtor's Workmen

Case Title: Amit Kumar Pandey & Ors. vs. Pardeep Kumar Sethi, Resolution Professional (JMT Auto Ltd.) and Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 1364 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member), held that the Claim of workers employed through sub-contractor filed through sub-contractor as Operational Debt cannot be treated as workmen of Corporate Debtor.

Condition To Submit Refundable BG, Not Violative 36-B Of CIRP Regulations: NCLAT Delhi

Case Title: Rakesh Ranjan v Fanendra Harakchand Munot & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1352 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that if the Request For Resolution Plan (RFPR) requires the resolution applicant(s) to submit a refundable Bank Guarantee, then such condition is not violative of Regulation 36-B of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”).

Regulation 36-B of CIRP Regulations states that in a RFPR there can be no requirement for a non-refundable deposit alongwith resolution plan. The Bench has upheld the decision of Committee of Creditors to reject a resolution plan which did not comply with the requirement of submitting a refundable Bank Guarantee alongwith plan.

Homebuyers Or Unsuccessful Resolution Applicant Not Entitled To File Avoidance Application: NCLAT Delhi

Case title: Ms. Amita Saurabh Bihani & Ors. v E&G Global Estates Limited & Ors.

Case No.: Company Appeal (AT)(Insolvency) No. 1214 & 1215 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that as per Section 25(2)(j) of IBC the Resolution Professional alone is empowered to file application for avoidance of transactions which are preferential, fraudulent, undervalued or extortionate in nature. The Homebuyer of the Corporate Debtor's real estate project or the unsuccessful resolution applicant is not entitled to file any application for avoidance of transactions under IBC.

CIRP And Avoidance Application Separate Set Of Proceedings, Adjudication Of Avoidance Application Can Survive CIRP: NCLAT Delhi

Case title: G.S. Constructions v E & G Global Estates Ltd. & Ors.

Case No.: Company Appeal (AT)(Insolvency) No. 1217 & 1218 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that Corporate Insolvency Resolution Process (“CIRP”) and proceedings for avoidance of transactions are separate set of proceedings. If an avoidance application filed by Resolution Professional is pending adjudication, then the same would not stall the approval of resolution plan by NCLT. Similarly, an avoidance application can survive CIRP.

“CIRP and avoidance applications are, thus by their very nature, a separate set of proceedings. The former is time bound whereas the latter requires a proper discovery of suspect transactions that are time consuming. The scheme of the IBC reinforces this difference and thus adjudication of an avoidance application is independent of the resolution of the corporate debtor and can survive CIRP.”

NCLAT Delhi: Auction Purchaser In Liquidation Proceedings Entitled For Certain Consequential Reliefs

Case Title: Punjab National Bank (International Limited) vs Perfect Day INC

Case No.: Company Appeal (AT) (Insolvency) No.1427 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) has held that the Successful Auction Purchaser can be given certain reliefs and concession consequent to going concern sale in the liquidation proceeding of Corporate Debtor.

NCLAT New Delhi: RERA Has Locus To Appeal Against CIRP Initiation Order And Is An “Aggrieved Person” U/S 61 Of IBC

Case Title: Real Estate Regulatory Authority vs. D.B. Corp Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No.1172-1173 of 2022

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that the Real Estate Regulatory Authority ('RERA') has locus to challenge Corporate Insolvency Resolution Process ('CIRP') initiation Order in Real Estate Insolvency in appeal under Section 61 of IBC before NCLAT.

NCLAT New Delhi: Barter Agreements Don't Constitute 'Operational Debt'

Case Title: Real Estate Regulatory Authority vs. D.B. Corp Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No.1172-1173 of 2022

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has held that the Corporate Insolvency Resolution Process ('CIRP') cannot be initiated under Section 9 of Insolvency and Bankruptcy Code, 2016 ('IBC') based on Barter Agreement/Transactions.

NCLAT New Delhi: Inter-Corporate Deposit In A Joint Venture Can't Be Construed As A 'Financial Debt' Under IBC

Case Title: Ansal Housing Ltd. Vs. Samyak Projects Pvt. Ltd.

Case No.: Company Appeal (AT)(Insolvency) No. 542 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member) has held that financial assistance given by one party to another in a Joint Venture Agreement ('JVA') by way of an Inter-Corporate Deposit ('ICD') to develop a real estate project jointly cannot be construed as a 'Financial Debt' in terms of IBC.

NCLAT New Delhi: Liquidator Is Not Entitled To Charge Fee From Scheme Proponent Submitting Scheme Under S.230 Of The Companies Act

Case Title: CA Jai Narayan Gupta (Liquidator of Barcle Enterprises Limited) vs. Radhasiriya Properties Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1473 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has held that the Liquidator is not entitled to charge any fee from the Scheme Proponent, who has submitted the Scheme under Section 230 of the Companies Act, 2013 read with Regulation 2B of IBBI (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”).

The NCLAT observed that Regulation 2B of the Liquidation Regulations only refers to the cost incurred by the Liquidator and Regulation 4 of the Liquidation Regulations deals with the Liquidator's fee. It held that being aware of the difference between the cost and fee, Regulation 2B does not indicate that any fee by the Liquidator can be charged from the Scheme Proponent. The Liquidator is entitled to his fee as per the statutory provision of Section 34, sub-sections (8) and (9) read with Regulation 4 of Liquidation Regulations. Thus, no fee can be charged from the Scheme Proponent, who has submitted the Scheme under Section 230 of the Companies Act, 2013 read with Regulation 2B of Liquidation Regulations.

NCLAT Delhi: Decisions To Liquidate Corporate Debtor By CoC U/S 33(2) Of IBC Must Be With Reasons And Cannot Be Done Arbitrarily

Case Title: Jaipur Trade Expocentre Pvt. Ltd. vs. Metro Jet Airways Training Pvt. Ltd. & Ors.

Case No.: Company Appeal (AT) (Ins.) No. 1224 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that decisions of the Committee of Creditors ('CoC') to liquidate the Corporate Debtor under Section 33(2) of IBC have to be with reasons and the liquidation cannot be decided arbitrarily.

NCLT

NCLT Chennai Terminates Insolvency Proceedings Against Appu Hotels Ltd., Approves Settlement Proposal By Promoter

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IA(IBC)/1134(CHE)/2022 in IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has terminated the Corporate Insolvency Resolution Process (“CIRP”) against Appu Hotels Ltd. while allowing an application filed under Section 12A of IBC by the Resolution Professional.

The Committee of Creditors have approved the Settlement Proposal submitted by Promoter of Corporate Debtor valued at Rs. 592 Crores, whereas the total claims admitted by the Resolution Professional amounted to Rs. 438.8 Crores. A Resolution Plan submitted by MGM Healthcare's owner, Mr. M.K. Rajagopalan, valued at Rs. 423 Crores was earlier approved by the NCLT but later set aside by the NCLAT.

NCLT Ahmedabad Directs Income Tax Department To Refund Tax To Corporate Debtor; Section 53 Of IBC Overrides Sec. 194-IA Of Income Tax Act

Case Title: Sunil Kumar Agarwal v Chief Commissioner of Income Tax (TDS), Ahmedabad

Case No.: CP(IB) 149 of 2017

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Mrs. Chitra Hankare (Judicial Member) and Dr. Velamur G Venkata Chalapathy (Technical Member), has held that Income Tax deducted and paid by the auction purchaser amounts to recovery of tax from Corporate Debtor (which is under liquidation), on priority with other creditors as mentioned in Section 53 of IBC, which is against the object and provisions of IBC.

The Liquidator sold the assets of the Corporate Debtor in e-auction to successful purchasers, who deducted Rs. 28,92,101/- towards 1% TDS payable in view of Section 194-IA of the Income Tax Act, 1963. The Bench has directed the Income Tax Department to refund the amount of Rs. 28,92,101/- to the Corporate Debtor.

NCLT Mumbai: Buyer In Liquidation Auction Sale Can't Step Back On Ill-Founded Ground Of Absence Of NCLT's Order Extending Period To Conclude Sale

Case Title: Melkar TTI Biofuels Ltd. vs. Mr. Dharit Kishorbhai Shah

Case No.: Company Petition (IB) No. 3610/MB/2019

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Justice Shri V.G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member), held that a Buyer in a Liquidation Auction sale can't be allowed to step back on the ill-founded ground of the absence of an Order of NCLT extending the period of 90 days to conclude the sale.

NCLT Mumbai: Substance Of A Transaction Is Important Over Its Form, Accounting Entries Can Not Determine Character And Nature Of Transaction

Case Title: Mr. Rakesh Bothra vs. Mr. Alok Kailash Saksena

Case No.: I.A. 812 of 2023 in C.P.(IB) No. 1807/MB/2018

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Justice Shri V.G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) has held that the substance of a transaction is important rather than its form and accounting entries cannot determine the character and nature of a transaction.

NCLT Mumbai: Unspent Balance And Refundable Security Deposit Of Prepaid And Postpaid Subscribers Constitutes 'Operational Debt' (Other Than Government Dues)

Case Title: Telecom Regulatory Authority of India Vs. Reliance Telecom Ltd.

Case No.: I.A. 88 of 2020 in C.P. (IB)No.1386/MB/2017

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Justice Shri V.G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member), has held that the unspent balance of Prepaid Subscribers and the Refundable Security Deposit of Postpaid Customers shall be treated as Operational Debt (other than Government dues) under IBC concerning telecom insolvency.

NCLT Kolkata Approves Resolution Plan For McNally Bharat Engineering Company Ltd

Case Title: Bank of India v McNally Bharat Engineering Company Limited

Case No.: I.A. (IB) No. 1391/KB/2023 in CP (IB) No. 891/KB/2020

The National Company Law Tribunal (“NCLT”), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has approved the Resolution Plan submitted by BTL EPC Limited (part of Shrachi Group) for McNally Bharat Engineering Company Limited.

The Resolution Plan is valued at Rs. 441.11 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 5,015.28 Crores.

NCLT Mumbai Approves Resolution Plan For Reliance Communications Infrastructure Ltd., Valued At Rs 455.9 Crores As Against Total Admitted Claim Of Rs 47,251 Crores

Case Title: State Bank of India v Reliance Communications Infrastructure Limited

Case No.: IA No. 2429 of 2021 in CP (IB) No. 3025 of 2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Justice Virendrasingh G. Bisht (Retd.) (Judicial Member) and Shri Prabhat Kumar (Technical Member), has approved the Resolution Plan submitted by Reliance Projects & Property Management Services Ltd. (wholly owned subsidiary of Mr. Mukesh Ambani promoted Reliance Industries Ltd.) for Reliance Communications Infrastructure Ltd., which is a subsidiary of Reliance Communications Ltd. previously being run by Anil Ambani.

The Resolution Plan is valued at Rs. 455.9 Crores, while the total admitted claims against the Corporate Debtor amounts to Rs. 47,251 Crores.

NCLT Guwahati Bench: Amount Given As Investment For Joint Venture By Financial Creditor To Corporate Debtor Is Not Financial Debt Under IBC

Case Title: Chiragsala Sales Pvt. Ltd vs Vaishno Devi Traders Private Limited

Case No.: CP (IB) No.33/GB/2022

The National Company Law Tribunal (“NCLT”), Guwahati Bench, comprising of Shri H. V. Subba Rao (Judicial Member) and Shri Satya Ranjan Prasad (Technical Member), has held that the amount given to a Corporate Debtor by a Financial Creditor by way of an investment for a Joint Venture does not fall within the definition of a financial debt as per the provisions of Insolvency and Bankruptcy Code, 2016 (“IBC”).

NCLT

NCLT Kolkata: CIRP Petition U/S 10 Avoiding Income Tax Liability Not Maintainable Under The IBC

Case Title: M/s Jayam Vyapaar Private Limited

Case No.: Company Petition (IB) No. 72/KB/2023

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that a petition filed under Section 10 of IBC to initiate Corporate Insolvency Resolution Process (CIRP) for avoiding Income Tax liability is not maintainable.

NCLT Kolkata: Explicit Written Agreement Of Loan Compulsory For NBFC To Establish 'Financial Debt'

Case Title: Desana Impex Limited vs. Brick and Mortar Reality Pvt. Ltd.

Case No.: Company Petition (IB) No. 342/KB/2022

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that an explicit written agreement of loan is compulsory for the Financial Creditor for being a NBFC to demonstrate whether the amount disbursed constituted a 'financial debt' under IBC.

ESI Dues Not At Par With PF, Pension Or Gratuity Dues; Neither Excluded From Liquidation Estate: NCLT Ahmedabad

Case Title: Regional Director, ESIC v Manish Kumar Bhagat

Case No.: IA/184(AHM)2021 in CP(IB) 537 of 2018

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Mrs. Chitra Hankare (Judicial Member) and Dr. Velamur G Venkata Chalapathy (Technical Member), has held that the dues of Employees State Insurance Corporation (ESIC) are not at par with the dues of Provident Fund, Pension Fund or Gratuity Fund under IBC. Consequently, ESIC dues not being 'workmen dues', are neither entitled to be excluded from liquidation estate nor entitled to be paid in priority over other dues.

Section 36(4)(iii) of IBC does not define the dues of ESIC as workmen dues and specifically mentions Provident Fund, Pension Fund and Gratuity Fund to fall under such category.

NCLT Mumbai: License Agreement Terminated Before Commencement Of CIRP, Security Deposit Can Be Appropriated Against Arrears Of Rent Receivable From Corporate Debtor

Case Title: M/s Sanghvi Metal Corporation vs Dilip Chhabria PVT LTD

Case No.: C.P.(IB) No. 1967/MB/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising Justice Shri V.G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member), has held that in the case of the license agreement which has been terminated before the commencement of Corporate Insolvency Resolution Process (“CIRP”) proceedings, the security deposit can be appropriated against the arrears of rent which is receivable from the Corporate Debtor.

Department Of State Tax Submits Belated Claim To Liquidator Due To Personal Medical Difficulty Of Officer-In-Charge, NCLT Mumbai Condones Delay Of 92 Days

Case Title: IDBI Bank Limited v M/s Essar Projects (India) Limited

Case No.: CP (IB) No. 1832/MB/C-II/2017

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has allowed the belated claim filed by Department of State Tax before the Liquidator, while holding the failure of Officer-in-Charge to file claim within time due to personal medical difficulty to be a 'sufficient cause' for condonation of delay.

NCLT Hyderabad: Airport Authority Of India Being A Statutory Body Does Not Fall Within Scope Of 'Corporate Person' U/S 3(7) Of IBC

Case Title: Akash Electrotek Engineers Pvt. Ltd. vs. NCC Ltd.

Case No.: CP(IB) No. 66/09/HDB/2022

The National Company Law Tribunal (NCLT), Hyderabad Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that no proceedings can be initiated against the Airport Authority of India ('AAI') as it is a statutory body created under the Airport Authority of India Act, 1944, does not fall under the definition of 'corporate person' under Section 3(7) of IBC.

NCLT New Delhi: Date Of Default Or Pleadings Can Be Amended At Any Stage Of The Matter Under IBC

Case Title: Piramal Enterprises Ltd. v. Kay Jay Leasing

Case No.: IA-1547/2023 in IB-359(ND)/2021

The National Company Law Tribunal (NCLT), New Delhi Bench, comprising of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member), has allowed the application of the Applicant for amendment of the date of default and held that the amendment of pleadings (including date of default) in a Corporate Insolvency Resolution Process (CIRP) application filed under Section 7 of IBC can be done at any stage of the matter.

For Deciding Preliminary Issue Of Maintainability In Section 9 Petition, Not Necessary To Seek Written Response From Corporate Debtor: NCLT Delhi

Case title: Willis Lease Finance Corporation v Spicejet Ltd.

Case No.: IB NO. 249/(ND)/2023

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Shri Rahul Bhatnagar (Technical Member), has held that it is not necessary to seek written response of the Corporate Debtor at the stage of deciding maintainability of petition under Section 9 of IBC.

“However, in this regard, this Adjudicating Authority is of the view that, this application is being analyzed on a prima facie issue, i.e. on the issue of maintainability of Section 9 petition. The Civil Procedure Code in its strict sense is not applicable under the present case and only the principle underlying therein may be applied wherever necessary. However, for the limited purpose of deciding preliminary issue of maintainability, no fruitful purpose would be served, by seeking written response, from the Corporate Debtor, when the application is at the stage of maintainability, i.e. whether the Applicant, is an Operational Creditor under the provisions of IBC or not”, the Bench held.

In Absence Of Privity Of Contract, Servicer Of Aircraft Lessors Has No Locus Standi To File Insolvency Proceedings Against SpiceJet: NCLT Delhi

Case title: Willis Lease Finance Corporation v Spicejet Ltd.

Case No.: IB NO. 249/(ND)/2023

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Shri Rahul Bhatnagar (Technical Member), has held that a Servicer of Aircraft Lessors, who is neither a party in Aircraft Lease Agreements nor the issuer of invoices, has no locus standi to seek initiation of insolvency proceedings against Spicejet Ltd. in the capacity of an Operational Creditor.

The Bench has dismissed a petition filed under Section 9 of IBC by Willis Lease Finance Corporation, seeking initiation of Corporate Insolvency Resolution Process (“CIRP”) against Spicejet Ltd. for the amounts due to the Aircraft Lessors.

NCLT Kolkata: Debt Arising From Foreign Arbitral Awards Can't Be Considered Financial Debt, But Can Be Treated As “Other Debts”

Case Title: Rishima SA Investments LLC (Mauritius) vs Avishek Gupta

Case No.: I.A. (IB) No. 1131/KB/2022

The National Company Law Tribunal (“NCLT”), Kolkata Bench, comprising Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member), has held that the debt arising out of foreign arbitral awards cannot be considered as Financial Debt, however, it can be treated as “Other Debts”. The Bench further observed that since the claim has reached finality in the view of the decree of competent foreign arbitral forums and only the execution is pending before the High Court, the claim should be admitted in full, and provision should have been made from the Resolution Plan value.

NCLT Mumbai: Insufficiently Stamped Assignment Deed Transferring Loan To Corporate Debtor Is Void And No CIRP Can Be Initiated Under IBC

Case Title: Vinsari Fruitech Ltd. vs. Effort BPO Pvt. Ltd.

Case No.: CP (IB) No. 330/MB/2023

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising of Justice V.G. Bisht (Retd.) (Judicial Member) and Mr. Prabhat Kumar (Technical Member), has held that the Transfer of loan from Principal Borrower to Corporate Debtor through assignment agreement, which is not stamped, is a void contract and CIRP under Section 7 of IBC cannot be initiated against such Corporate Debtor.

NCLT Mumbai: No Bar On Clubbing Multiple Purchase In A Single CIRP Petition Under IBC

Case Title: MM Aqua Technologies Ltd. vs. Clean Flow Cooling Tower Solutions Pvt. Ltd.

Case No.: C.P. (I.B) No. 861/MB/2022

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Ms. Reeta Kohli (Judicial Member) and Ms. Madhu Sinha (Technical Member) held that Multiple Purchase Orders can be clubbed in a single Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of IBC and the same is maintainable.

Non-compliance Of Regulation 30A Of CIRP Regulations Not A Ground For Rejection Of Section 12A Application: NCLT Chennai

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has held that an application under Section 12A of IBC cannot be rejected merely on hyper-technical ground of non-compliance of Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”). Compliance of Regulation 30A is directory and not mandatory.

“Regulation 30A prescribes the set of procedure for withdrawal of Application under Section 12A of IBC, 2016. This is nothing but a set of procedural rules. All the rules of procedure by themselves are to aid the Tribunal which is exercising its judicial power to render justice. Procedure rules are a hand-maiden to justice and should never be made a tool to deny justice or perpetuate injustice. Procedural defects or irregularities which are curable should not be allowed to defeat the substantive rights or to cause injustice”, the Bench held.

Prospective Resolution Applicant Has No Locus To Question Promoter's Settlement Proposal Under Section 12A: NCLT Chennai

Case Title: Tourism Financial Corporation of India Ltd v M/s. Appu Hotels Limited

Case No.: IBA/1459/2019

The National Company Law Tribunal (NCLT), Chennai Bench, comprising of Shri Sanjiv Jain (Judicial Member) and Shri Venkataraman Subramaniam (Technical Member), has held that Prospective Resolution Applicants have no locus to question the settlement proposal of the Promoter under Section 12A of IBC.

“It is also pertinent to point out here that the Prospective Resolution Applicants also cannot state that non – compliance of Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 has caused prejudice to them. Regulation 30A encompasses only (i) Applicant / Petitioning Creditor, (ii) CoC and (iii) IRP / RP. It does not confer any right upon the Prospective Resolution Applicants to object to the settlement proposal or withdrawal of Application under Section 12A. Even assuming for a moment, if such a right is conferred, the Resolution Applicant is required to convince this Adjudicating Authority that non – compliance has caused serious prejudice to the Applicant.”

COMPETITION COMMISSION OF INDIA

CCI Closes Complaint Against Lupin Ltd. And Dr. Reddy Laboratories, Citing No Contravention Of Section 3 And 4 Of Competition Act

Case Title: Shri. Nadie Jauhri And Lupin Ltd. and Another

Case No.: Case No. 23 of 2023

The Competition Commission of India ('CCI') comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member), and Mr. Deepak Anurag (Member), closed the complaint filed by Shri. Nadie Jauhri ('Informant') against Lupin Ltd. ('OP-1') and Dr. Reddy's Laboratories Ltd. ('OP-2') alleging violation of the provisions of Section 3 and Section 4 of the Competition Act, 2002 ('Act').

The Informant contended that OP-1's procedure to refuse the supply of products to Indira Medical Agencies, Nashik violated the Drug (Price Control) Order, 2013 issued under Section 3 of the Essential Commodities Act, 1965. Informant contended that no pharma company can impose its dictates over wholesalers. Moreover, while OP-1's policy might not violate the Drugs and Cosmetics Act, of 1940, it is in contravention to allow healthy competition. Further, it has been alleged that OP-1 did not have a Food and Drug Administration license, thereby supplying spurious/misbranded goods.

The CCI held that no prima facie evidence has been provided by the Informant to substantiate its allegations against OP-1 and OP-2 to warrant a case of contravention of Sections 3 and 4 of the Act.

CCI Closes Complaint Against Survey Of India: Procurer Free To Prescribe Technical Conditions Under Tender

Case Title: XYZ (Confidential) And Surveyor General of India, Survey of India

Case No.: Case No. 24 of 2023

The Competition Commission of India ('CCI') comprising Ms. Ravneet Kaur (Chairperson), Mr. Anil Agrawal (Member), Ms. Sweta Kakkad (Member), and Mr. Deepak Anurag (Member), has closed the complaint against Surveyor General of India, Survey of India ('OP-1') and Technical Committee for Purchase of Plotter, Survey of India ('OP-2'). The complaint was filed alleging contravention of the provisions of Section 3 of the Competition Act, 2002 ('Act') while procuring LED Plotters with Folders, by the Survey of India, Department of Science and Technology ('SoI').

The CCI held that technical criteria or conditions within the tender documentation can be prescribed by the procurer as per its particular need.