IBC | Moratorium Under S 14 No Bar To Execute Decree Against Directors/Officers Of Corporate Debtor: Supreme Court

Case Title: Ansal Crown Heights Flat Buyers Association (Regd.) V M/S. Ansal Crown Infrabuild Pvt. Ltd. & Ors.

Citation: 2024 LiveLaw (SC) 63

The Supreme Court has held that the imposition of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) has no effect on the execution of a decree against the Directors or Officers of the Company (Corporate Debtor), which is undergoing Corporate Insolvency Resolution Process (“CIRP”) under IBC.

When the Company was admitted into CIRP, the National Consumer Disputes Redressal Commission (“NCDRC”) declined to permit execution of a decree against the Company and also its Directors/Officers. The Bench held that the protection of moratorium under Section 14 of IBC is only available to the Company and not to its Directors or Officers, thus the execution of decree can be done against them even during moratorium.

The Bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan, has held, “Therefore, we are of the view that only because there is a moratorium under Section 14 of the IBC against the company, it cannot be said that no proceedings can be initiated against the opposite party Nos. 2 to 9(the respondent Nos. 2 to 9) for execution, provided that they are otherwise liable to abide by and comply with the order, which is passed against the company. The protection of the moratorium will not be available to the directors/officers of the company.”

IBC | Statutory Set Off Or Insolvency Set Off Inapplicable To Corporate Insolvency Resolution Process: Supreme Court

Case Title: Bharti Airtel Limited and Another V Vijaykumar V. Iyer and Others

Citation: 2024 LiveLaw (SC) 11

The Supreme Court has held statutory set off or insolvency set off is not applicable to Corporate Insolvency Resolution Process (“CIRP”) proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”). Further, Regulation 29 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”), which provides for mutual dealing and set off, does not apply to Part II of the IBC which deals with CIRP.

The principle of Set-off recognizes the right of a debtor to adjust the smaller claim owed to him against the larger claim payable to his creditor.

The Bench has also carved out two exceptions to the application of statutory or insolvency set off to CIRP proceedings. First being, when a party is entitled to contractual set-off, on the date which is effective before or on the date of commencement of CIRP. Secondly, in cases of 'equitable set-off' when the claim and counter claim in the form of set-off are linked and connected on account of one or more transactions that can be treated as one.

The Bench comprising Justice Sanjiv Khanna and Justice S.V.N. Bhatti, has observed that Section 30(2)(b) does not support the plea of insolvency set-off, since the provision deals with the amounts to be paid to creditors and not amount payable by creditors to Corporate Debtor. Further, the specific legislative mandate given in Chapter II Part II of IBC, the provisions of IBC relating to CIRP do not recognize the principle of insolvency set-off. “We would not extend it by implication, when the legislature has not accepted applicability of mutual set-off at the initial stage, that is, the Corporate Insolvency Resolution Process stage.”

IBC - Is Dissenting Financial Creditor Entitled To Minimum Value Of Security Interest? Supreme Court Refers To Larger Bench, Doubts Precedent

Case Title: DBS Bank Ltd Singapore v. Ruchi Soya Industries Ltd and another

Citation: 2024 LiveLaw (SC) 6

The Supreme Court has referred to larger bench the issue whether a dissenting financial creditor is to be paid the minimum value of its security interest as per the Insolvency and the Bankruptcy Code 2016.

A bench comprising Justices Sanjiv Khanna and SVN Bhatti, in the case DBS Bank Ltd Singapore v. Ruchi Soya Industries Ltd and another, referred the following question :

Whether Section 30(2)(b)(ii) of the Insolvency and Bankruptcy Code, 20161, as amended in 2019, entitles the dissenting financial creditor to be paid the minimum value of its security interest?

The bench differed from the view expressed by a coordinate bench in the 2021 judgment in the case India Resurgence ARC Private Limited v. Amit Metaliks Limited & Another which held that a dissenting secured creditor cannot challenge an approved resolution plan contending that higher amount should have been paid to it based on the security interest held by it over the corporate debtor.

The bench in the instant case observed that there was a contradiction between India Resurgence ARC Private Ltd with the ratio decidendi of the decisions of the three-Judge Bench judgments in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta(2019) and Jaypee Kensington Boulevard Apartments Welfare Association vs. NBCC (India) Ltd(2021).

IBC | Inappropriate For NCLAT To Direct NCLT To Admit Petition Under Section 7 Without Evaluating Rival Contentions On Merits: Supreme Court

Case Title: Maneesh Pharmaceuticals Ltd v Export Import Bank of India and Ors.

Citation: 2023 LiveLaw (SC) 1073

The Supreme Court has set aside an order passed by the National Company Law Appellate Tribunal (“NCLAT”) whereby the National Company Law Tribunal (“NCLT”) was directed to admit a petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC”).

The Bench comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that it was inappropriate for the NCLAT to direct the NCLT to admit the application under Section 7 of IBC straightaway without an evaluation of the rival contentions on merits. The Bench has directed the NCLT to determine whether the petition under Section 7 of IBC is liable to be admitted, after hearing the parties.

NCLAT

Scheme Of Compromise Decided In Absence Of Shareholder Who Submitted It, NCLAT Chennai Directs Re-Consideration In Presence Of The Shareholder

Case Title: Sanjeev Mitla v Mr. Madhusudhan Rao Gonugunta & Anr.

Case No.: Company Appeal (AT) (CH) (Ins) No. 387 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has directed the Liquidator to convene a meeting of the Stakeholders Consultation Committee (SCC) to re-consider the compromise scheme submitted by a shareholder, in the presence of such shareholder.

A shareholder of the Corporate Debtor had submitted a compromise scheme under Section 230 of the Companies Act, 2013 to the Liquidator. The Liquidator placed the Scheme before the Stakeholders Consultation Committee in absence of the shareholder and the same was rejected. The shareholder submitted that it could not persuade the SCC in respect of the Scheme due to his absence.

NCLAT Chennai: Resolution Professional Is Empowered U/S 25(1) Of IBC To Reject CoC's Proposal For Renewal Of Bank Guarantees By Corporate Debtor

Case Title: IDBI Bank Ltd. and Ors. v. Mr. Sumit Binani, RP of KSK Mahanadi Power Company Ltd.

Case No.: Company Appeal (AT) (CH) (INS.) No. 385 / 2023

The National Company Law Appellate Tribunal ('NCLAT'), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the Resolution Professional is empowered under Section 25(1) of IBC to reject the proposal of Committee of Creditors ('CoC') for renewal of Bank Guarantees provided by the Corporate Debtor.

NCLAT New Delhi: Liquidator Is Entitled To His Fee Under S. 34 Of IBC And Regulation 4 Of Liquidation Regulations And Cost Under Regulation 2B Of Liquidation Regulations

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 entitled to his fee under Section 34 of IBC and Regulation 4 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and Cost under Regulation 2B of Liquidation Regulations.

NCLAT Delhi: Once CIRP Has Stayed, Resolution Professional Can't Be Directed To Hand Over The Charge Of Corporate Debtor To Ex-Management

Case Title: Mr. Mukesh Kumar Jain vs. Navin Kumar Upadhyay & Anr

Case No.: Company Appeal (AT) (Insolvency) No. 930-931 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 Resolution Professional cannot be directed to hand over the charge of Corporate Debtor to the Ex-management, once CIRP has stayed.

The Bench opined that handing over the charge of the Corporate Debtor to Ex-management can be dangerous and the same is prone to misuse the assets and the assets shall be diminished, which may adversely affect the creditors of the Corporate Debtor in case of stay of the CIRP.

Resolution Professional Can't Question COC Decision Of Replacement: NCLAT Delhi

Case title: Partha Sarathy Sarkar v Specified Undertaking of Unit Trust of India Ltd (SUUTI) & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 1340 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 when the Committee of Creditors (CoC) passes a resolution to replace the Resolution Professional, then it is not open for the Resolution Professional to question the reasons for its replacement and ask NCLT to adjudicate upon the reasons which persuaded the CoC to pass the resolution.

NCLAT Delhi: Corporate Debtor Can't Be Absolved From Liability Just Because Insurance Claim Received By Operational Creditor

Case Title: Mr. Milan Aggarwal vs. Saudi Basic Industries Corporation and Anr.

Case No.: Company Appeal (AT) (Insolvency) No.231 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that the Corporate Debtor cannot be absolved from its liability to discharge its Operational debt by the Insurance Company's payment to the Operational Creditor of its claim and the same cannot be a ground to reject the Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of IBC.

NCLAT Delhi: Non-Stamping Of Agreement Doesn't Render CIRP As Non-Maintainable When Other Material To Prove Default Of Debt Exists

Case Title: Hiren Meghji Bharani vs. Shankheshwar Properties Pvt. Ltd. through its Resolution Professional and Anr.

Case No.: Company Appeal (AT) (Insolvency) No.446 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that the non-stamping of document does not render the Corporate Insolvency Resolution Process ('CIRP') petition filed to be non-maintainable when there exists other material on record to prove existence of default in the payment of debt.

NCLAT New Delhi: When CoC Hasn't Confirmed Appointment Of IRP, IRP Can Be Replaced By CoC U/S 22 Of IBC

Case Title: Kairav Anil Trivedi, IRP of Parenteral Drugs India Ltd. v. State Bank of India (Erstwhile CoC) & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1439 & 1440 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi, comprising Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member), and Shri Arun Baroka (Technical Member), has held that when the Committee of Creditors ('CoC') has not confirmed the appointment of Interim Resolution Professional ('IRP'), the IRP can be replaced by the CoC under Section 22 of IBC.

NCLAT Chennai: Goods Not In Possession Of The Port, Claim By Port Can't Be Treated As Secured Creditor Under IBC

Case Title: V O Chidambaranar Port Authority vs. Shri Rajesh Chillale, RP of IndBharath Power Gencom Ltd.

Case No.: Company Appeal (AT) (CH) (Ins) No. 412 of 2023

The National Company Law Appellate Tribunal ('NCLAT'), Chennai, comprising Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that there is no actual lien to invoke Section 171 of the Indian Contract Act, 1872 when the goods are not in possession of the Port Authority and the claim of the Port cannot be treated as a Secured Creditor for distribution of liquidation assets under Sec. 53 of IBC.

NCLAT Delhi Upholds Dismissal Of Insolvency Plea Against Aditya Birla Fashion And Retail Ltd., An Aditya Birla Group Company

Case title: In Style Fashion v Aditya Birla Fashion and Retail Limited

Case No.: Company Appeal (AT)(Insolvency) No. 1679 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 declined to initiate insolvency proceedings against Aditya Birla Fashion and Retail Limited under Section 9 of IBC, on the premise that there is pre-existing dispute between Parties which cannot be investigated upon by NCLT or NCLAT.

Aditya Birla Fashion and Retail Limited is a part of Aditya Birla Group of companies and runs the Pantaloons showrooms.

Successful Auction Purchaser To Pay All Dues For Availing A New Electricity Connection, Except For The Arrears Of Pre-CIRP Period: NCLAT Delhi

Case Title: Paschimanchal Vidyut Vitran Nigam Ltd. v HSA Traders & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.527 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 the Successful Auction Purchaser in the liquidation of Corporate Debtor shall be liable to pay all dues for availing a new electricity connection, apart from the pre-CIRP electricity dues.

NCLAT Delhi: Optionally Convertible Debentures Constitute 'Financial Debt' U/s 5(8)(c) Of IBC

Case Title: Santosh Kumar vs. ASK Trusteeship Services Pvt. Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1575 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), has held that the Optionally Convertible Debentures are Financial Debt within the meaning of Section 5(8)(c) of IBC.

When Number Of Allottees Disputed, NCLT To Decide S.7(1) Compliance Prior To Admission: NCLAT Delhi

Case title: Parikshit Madanmohan Sharma v M.S. Gopikrishnan & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 206 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Shri Naresh Salecha (Technical Member), has held that when the total number of allottees in a real estate project is disputed, then the NCLT should first decide whether the Section 7 petition has been filed by minimum number of allottees prescribed under second proviso to Section 7(1) of IBC or not.

The Bench has set aside a NCLT order whereby insolvency proceedings were initiated against a real estate developer company, without deciding the issue pertaining to compliance of Section 7(1) of IBC.

NCLAT Delhi Terminates Insolvency Proceedings Against Asian Hotels (West) Ltd., Accepts Settlement Proposal By Promoters

Case Title: Sandeep Gupta v JM Financial Asset Reconstruction Company Ltd. & Anr.

Case No.: Company Appeal (AT) (Ins.) No. 1192 & 1193 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has terminated Corporate Insolvency Resolution Process (“CIRP”) of Asian Hotels (West) Ltd., which was initiated by NCLT in September 2022. The Bench has accepted the Settlement Proposal submitted by Promoters and Suspended Directors of Asian Hotels (West), wherein 100% dues of Financial Creditors along with interest and 100% dues of the Operational Creditor, Government dues and dues of employees with entire CIRP cost has been proposed to be paid.

The Asian Hotels (West) Ltd. owns the five-star hotels namely Hotel Hyatt Regency Mumbai and JW Marriott, New Delhi Aerocity (through its subsidiary).

NCLAT Chennai: CoC's Commercial Wisdom Includes Approval Of Resolution Plan Below Liquidation Value

Case Title: Mr. Ramesh Kesavan vs. CA Jasin Jose, RP SD Pharmacy Pvt. Ltd.

Case No.: Company Appeal (AT)(CH)(Ins.) No. 422 of 2023

The National Company Law Appellate Tribunal ('NCLAT') Chennai Bench, comprising Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the approval of the Resolution Plan below the Liquidation value is within the commercial wisdom of the Committee of Creditors ('CoC') as the IBC does not expressly bar that the Resolution Plan value should be over and above the Liquidation value.

NCLAT Delhi: CIRP Against Financial Service Provider Is Not Maintainable Under IBC

Case Title: Globe Capital Market Ltd. vs. Narayan Securities Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.32 of 2024 & I.A No. 62 of 2024

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that a Corporate Insolvency Resolution Process ('CIRP') application against the Financial Service Provider is not maintainable under IBC.

NCLAT Delhi: Ex-Promoter, Who Resigned Before CIRP Commencement, Is Eligible To Submit Resolution Plan

Case Title: Vishram Narayan Panchpor RP of Blue Frog Media Pvt. Ltd. vs. Committee of Creditors (Blue Frog Media Pvt. Ltd.) and Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1489 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), has held that an Ex-Promoter/Director who resigned from Corporate Debtor before initiation of Corporate Insolvency Resolution Process ('CIRP') under Section 10 of IBC is eligible to submit a Resolution Plan under Section 29A of IBC.

Bank Files Claim After 738 Days Of Delay And Post Approval Of Resolution Plan, NCLAT Delhi Upholds Rejection Of Claim

Case title: Kotak Mahindra Bank Ltd. v Sandeep Goel RP for Sarvottam Realcon Pvt Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 140 of 2024

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 upheld the rejection of a claim submitted by Kotak Mahindra Bank Ltd., which was submitted to the Resolution Professional after delay of 738 days and post approval of resolution plan for the Corporate Debtor.

NCLAT Delhi: Security Of Refund Of Advance Amount Can't Change Nature Of Transaction Into Financial Debt

Case Title: Sainik Industries Pvt. Ltd. vs. Ritesh Raghunath Mahajan, RP, Indian Sugar Manufacturing Company Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 1614 of 2023

The National Company Law Appellate Tribunal ('NCLAT') New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member), and Mr. Arun Baroka (Technical Member), has held that the Security of refund of the advance amount cannot change the nature of transaction into financial debt.

Resolution Applicant Who Participated In The Process Has Locus To Object The Application For Approval Of Resolution Plan: NCLAT Delhi

Case title: PRIO S.A. v Mr. Pravin R. Navandar & Ors.

Case No.: Company Appeal (AT) (Insolvency) No.1650 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 a resolution applicant who has participated in the process, has locus to object the application filed by Resolution Professional under Section 30(6) of IBC for approval of resolution plan submitted by another resolution applicant.

NCLT

NCLT Mumbai: Financial Creditor Can't Initiate CIRP Against Successful Resolution Applicant On Default Of Payment As Per Resolution Plan

Case Title: ICICI Prudential Asset Management Company Ltd. vs. Nandi Vardhan Infrastructure Ltd.

Case No.: CP(IB) 276 MB 2023

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that the Financial Creditor cannot initiate a Corporate Insolvency Resolution Process ('CIRP') application against the Successful Resolution Applicant ('SRA') on default in payment to Stakeholders/Creditors as per terms of the approved Resolution Plan under IBC.

NCLT Delhi Approves Resolution Plan of Ramkrishna Forgings Ltd For ACIL Ltd.

Case Title: IDBI Bank Limited v M/s ACIL Limited

Case No.: CP IB-170/PB/2018

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), has approved the Resolution Plan submitted by M/s Ramkrishna Forgings Limited for ACIL Ltd.

The Resolution Plan is valued at Rs. 129.5 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 1,782 Crores.

Claim Arising Out Of Arbitral Award Against Which Section 34 Proceedings Are Pending, NCLT Kolkata Upholds RP's Decision To Admit Claim Contingently

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

Case No.: 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 upheld the Resolution Professional's decision to admit claim arising out of an arbitral Award as contingent claim, since proceedings under Section 34 of Arbitration and Conciliation Act, 1996 are pending before the High Court against the Award.

NCLT Hyderabad: Amount In Corpus Fund For Maintenance Of Apartments By Homebuyers Does Not Qualify As 'Financial Debt' In IBC

Case Title: Vasathi Anandi Owners Welfare Association v. Vasathi Housing Ltd.

Case No.: Company Petition-CP(IB) No. 50/7/HDB/2020

The National Company Law Tribunal ('NCLT'), Hyderabad Bench, comprising Shri. Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member), has held that the amount deposited in Corpus Fund towards the maintenance of constructed apartments by Homebuyers does not qualify as 'Financial Debt' within the meaning of Section 5(8)(f) of IBC. It was observed that Corpus Fund amount is similar to a prepayment made to a service provider for maintenance and the same does not meet the criteria for classification as Financial Debt.

Suspended Directors Can't Transfer Amount From Corporate Debtor's Account During Stay On CIRP, NCLT Mumbai Directs Refund

Case Title: State Bank of India v Arshiya Northern FTWZ Limited

Case No.: C.P. No. 1245 of 2021

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Ms. Reeta Kohli (Judicial Member) and Shri Sanjiv Dutt (Technical Member), has held that Suspended Directors of Corporate Debtor cannot transfer amounts from the Corporate Debtor's account while there is a stay on CIRP.

The NCLAT stayed the CIRP and before vacation of stay the Suspended Directors transferred certain amounts from the Corporate Debtor's account towards loan payment of Group Companies. The Bench directed the Group Companies to revert the amount in the Corporate Debtor's account.

“After the stay of the CIRP order, Resolution Professional cannot discharge any function. Stay of admission order/CIRP does not mean that the Corporate Debtor should be put back in the management of day to day affairs of the company and allowed to function as such. Interim Order staying CIRP clearly means that no further process shall be taken in CIRP and the Resolution Professional shall not take any further action. The Corporate Debtor can no longer be permitted to function as it was functioning prior to the date of admission order.”

NCLT Allahabad: Operational Debt, Out Of Non Delivery Of Goods Due To Export Ban, Not Maintainable

Case Title: Morex Corporation Ltd. v. Jindal Poly Films Ltd.

Case No.: CP (IB) No.12/ALD/2021

The National Company Law Tribunal ('NCLT'), Allahabad, comprising Shri. Praveen Gupta (Judicial Member) and Shri Ashish Verma (Technical Member), has held that a Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of IBC is not maintainable for any claim arising on account of non-delivery of goods for export by the Corporate Debtor due to a ban imposed by the Government of India.

NCLT Hyderabad Approves Resolution Plan For GVK Power (Goindwal Sahib) Ltd., A GVK Group Company

Case Title: Axis Bank Limited v GVK Power (Goindwal Sahib) Ltd

Case No.: CP No. (IB) 43/7/HDB/2020

The National Company Law Tribunal (“NCLT”), Hyderabad Bench, comprising of Dr. N. Venkata Ramakrishna Badarinath (Judicial Member) and Shri Charan Singh (Technical Member), has approved the Resolution Plan submitted by Punjab State Power Corporation Limited for GVK Power (Goindwal Sahib) Limited, which is a part of GVK Group promoted by Mr. Gunupati Venkata Krishna Reddy.

The Resolution Plan is valued at Rs. 1,080 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 6,615.48 Crores.

NCLT Mumbai: Non-Acceptance Of Goods By Corporate Debtor Does Not Equate To Operational Debt U/S 5(21) Of IBC

Case Title: Adishank Chemicals Pvt. Ltd. vs. Baerlocher India Additives Pvt. Ltd.

Case No.: CP(IB)/736/MB/2023

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Justice Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the non-acceptance of the goods by the Corporate Debtor cannot be equated with the default in respect of an Operational debt under Section 5(21) of IBC.

NCLT Hyderabad: IBC Overrides The Provisions Of Andhra Pradesh Revenue Recovery Act, 1864

Case Title: K. Sivalingam RP of NCS Sugars Ltd. vs. District Collector and Ors.

Case No.: CP(IB) No.299/7/HDB/2018

The National Company Law Tribunal ('NCLT') Hyderabad, comprising Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri. Charan Singh (Technical Member) held that the Insolvency and Bankruptcy Code, 2016 ('IBC') overrides the provisions of the Andhra Pradesh Revenue Recovery Act, 1864.

NCLT Hyderabad: Moratorium U/s 14 Of IBC Imposes Legal 'Embargo' Not Only On Financial Creditors But On Any Other Person For Sale Of Assets In CIRP

Case Title: K. Sivalingam RP of NCS Sugars Ltd. vs. District Collector and Ors.

Case No.: CP(IB) No.299/7/HDB/2018

The National Company Law Tribunal ('NCLT') Hyderabad, comprising Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri. Charan Singh (Technical Member), has held that the moratorium u/s 14 of IBC operates as a legal 'embargo' on the sale or alienation of the assets of the Corporate Debtor during the CIRP of the Corporate Debtor not only on the Financial Creditor but also on any person.

NCLT Kolkata: Revival Of Corporate Debtor Is Primary Goal Of Resolution Plan And Going Concern Sale

Case Title: Universaltech Paper LLP vs. Mr. Krishnaswami CVR, Liquidator of Kohinoor Pulp & Paper Pvt. Ltd.

Case No.: I.A. (I.B.C.) 1055/KB/2023 In CP(IB) No. 511/KB/2019

The National Company Law Tribunal ('NCLT') Kolkata, comprising Justice Rohit Kapoor (Judicial Member) and Mr. Balraj Joshi (Technical Member), has held that the primary goal of Resolution Plan as well as the sale of a Corporate Debtor as a going concern remains the same i.e revival of the Corporate Debtor's business.

IBC | Settlement In Section 7 Or Dropping Of Sec. 66 Proceedings Does Not Automatically End Proceedings Under Section 43: NCLT Mumbai

Case Title: Reserve Bank of India v Dewan Housing Finance Corporation Limited

Case No.: COMPANY PETITION (IB) NO. 4258/MB/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that the proceedings under Section 43 of IBC would not automatically end against a party, if the parties enter settlement in Section 7 of IBC proceedings or proceedings under Section 66 of IBC are dropped.

“We again wish to reiterate that merely because the Applicant has settled the matter with regard to the said loan does not ipso facto absolve it of the insinuations or allegations made in the application u/s 43 of the Code. We are further of the view that it would be untimely and inopportune to exonerate the Applicant of the allegations made against it in the said application which is yet to be heard and decided on merits. Besides, settlement with the Respondent in proceedings u/s 7 of the Code does not or cannot have the effect of drawing curtains over the proceedings u/s 43 of the Code which are altogether different and distinct.”

NCLT Indore: Insolvency Resolution Professional Can Continue To Function Till Appointment Of RP U/S 16(5) Of IBC

Case Title: Indian Bank vs. Indison Agro Foods Ltd.

Case No.: IA/166(MP)2023 & IA/253(MP)2023

The National Company Law Tribunal ('NCLT') Indore, comprising Shri P. Mohan Raj (Judicial Member) and Shri Kaushalendra Kumar Singh (Technical Member), held that the Interim Resolution Professional ('IRP') can continue to function till the date of appointment of the Resolution Professional ('RP') as per the amended provisions of Section 16(5) of IBC.

NCLT Delhi: Debt Assignment Deed Cannot Be Challenged In CIRP U/s 7 Of IBC

Case Title: CFM Asset Reconstruction Pvt. Ltd. Vs. M.G. Finvest Pvt. Ltd.

Case No.: Company Petition IB (IBC) NO. 115/PB/2022

The National Company Law Tribunal ('NCLT') New Delhi Bench, comprising Justice Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), held that the Debt Assignment Deed cannot be challenged in a Corporate Insolvency Resolution Process ('CIRP') under Section 7 of IBC.

Passing Of Decree Or Award Does Not Alter The Nature Of Operational Debt To Financial Debt: NCLT Mumbai

Case Title: Hpcl-Mittal Pipelines Limited v Coastal Marine Construction And Engineering Limited

Case No.: C.P. (IB) 323/MB/2023

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Mr. Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the nature of an operational debt would not change to financial debt with the passing of a decree or arbitral award in respect of the same.

“Undisputedly, the claim on the basis of which arbitral proceedings were initiated by the Petitioner emanated from a work contract which originally was at best an operational debt and as per the law laid down in the afore cited cases, the nature of debt would not change with the passing of a decree or an award and, therefore, simply because an award was passed in respect of an operational claim, it will not by itself metamorphose into a financial debt.”

HIGH COURT

S.204 IBC | Provision Of Twin Tier Control By IBBI And IPA By Itself Doesn't Give Rise To Presumption Of Double Jeopardy: Madras High Court

Case Title: CA V Venkata Sivakumar v The Insolvency and Bankruptcy Board of India (IBBI) and Others

Citation: 2024 LiveLaw (Mad) 35

The Madras High Court while dismissing a challenge made to Section 204 of the Insolvency and Bankruptcy Code (IBC), which gives powers to the Insolvency Professional Agency (IPA) to monitor the conduct of the Insolvency professional, observed that merely because the provision gave powers to both the Insolvency Bankruptcy Board of India (IBBI) and the IPA, it would not become arbitrary or give a presumption of double jeopardy.

The bench of Chief Justice SV Gangapurwala and Justice Bharatha Chakravarthy observed that the conferment of powers to the IBBI and IPA by itself would not amount to conferring unbridled power as the regulation and bye-laws provided for checks and balances. Noting that there was no excessive power being granted, the court added that Section 204 of IBC was only an enabling provision and there was no constitutional infirmity in the provision.