“Inappropriate, Almost Bordering On Contempt”: SC Deprecates NCLAT Order Impeding Implementation Of SC Order

Case Title: Indiabulls Housing Finance Ltd. v Iirf India Realty Xii Ltd. & Ors.

Case No.: CIVIL APPEAL NO.9062/2022

The Supreme Court Bench comprising of Justice Sanjay Kishan Kaul and Justice Abhay S. Oka while adjudicating an appeal has set aside a status quo order passed by NCLAT Delhi which impeded the implementation of an order passed by the Supreme Court. The Bench has deprecated the NCLAT order while observing that the same is inappropriate and almost bordering on contempt.

“We fail to appreciate how a status quo order could have been passed by a Bench of the NCLAT seeking to impede the implementation of the order of this Court. If there was a grievance about the implementation of the order of the Court, only this Court could have got into it. We consider the conduct of the Bench not only inappropriate but almost bordering on contempt. We strongly deprecate the order passed by the NCLAT Bench. We thus, set aside the order of status quo in those proceedings and insofar as that appeal i.e. Company Appeal (AT) (INS.) No.1472/2020, is concerned, the same be placed before a Bench presided over by the Chairman.”

Borrowers Enter OTS ; Supreme Court Directs Bank To Re-Consider Decision Of Wilful Default

Case Title: Orbitz Irrigation Pvt. Ltd. & Ors. v Bank Of Baroda & Anr.

Case No.: Special Leave to Appeal (C) No.15751/2022

The Supreme Court Bench comprising of Justice Surya Kant and Justice J.B. Pardiwala, has directed the Bank to re-consider its decision of declaring the Borrowers (Petitioners) as wilful defaulters in light of changed circumstances, as the Bank had subsequently entered into One Time Settlement (OTS) with the Borrowers. The Borrowers have been making payments towards the OTS. The Bench has also granted liberty to the Borrowers to avail legal remedy if the Bank’s decision on their representation is not favourable to them.

Sabka Vishwas Scheme: Supreme Court Grants Relief To Company Which Missed Deadline Due To IBC Moratorium

Case Title: Shekhar Resorts Limited vs Union of India

Case No.: 2023 LiveLaw (SC) 15, CA 8957 OF 2022

The Supreme Court Bench comprising of Justices M R Shah and Justice B V Nagarathna has remarked that “No one can be expected to do the impossible” while granting relief to a company which could not avail the benefit of settlement of tax dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, due to moratorium under IBC being imposed on it. "The appellant cannot be punished for not doing something which was impossible for it to do. There was a legal impediment in the way of the appellant to make any payment during the moratorium. Even if the appellant wanted to deposit settlement amount within the stipulated period, it could not do so in view of the bar under the IBC as, during the moratorium, no payment could have been made. In that view of the matter, the appellant cannot be rendered remediless and should not be made to suffer due to a legal impediment which was the reason for it and/or not doing the act within the prescribed time." Allowing the appeal, the court directed that the payment of Rs.1,24,28,500/- already deposited by the appellant be appropriated towards settlement dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” and the appellant be issued discharge certificate.

IBC - Delay In Filing CIRP Application Condonable On Sufficient Reasons: Supreme Court

Case Title: Sabarmati Gas Limited v Shah Alloys Limited

Case No.: 2023 LiveLaw (SC) 9, CA 1669 of 2020

The Supreme Court Bench comprising of Justices Ajay Rastogi and Justice C T Ravikumar has held that delay in initiating Corporate Insolvency Resolution Process (CIRP) is condonable on sufficient grounds. "When the limitation period for initiating CIRP under Section 9, IBC is to be reckoned from the date of default, as opposed to the date of commencement of IBC and the period prescribed therefor, is three years as provided by Section 137 of the Limitation Act, 1963 and the same would commence from the date of default and is extendable only by application of Section 5 of the Limitation Act, 1963 it is incumbent on the Adjudicating Authority to consider the claim for condonation of the delay when once the proceeding concerned is found filed beyond the period of limitation..As relates Section 5 of the Limitation Act showing ‘sufficient cause’ is the only criterion for condoning delay. ‘Sufficient Cause’ is the cause for which a party could not be blamed.

NCLAT

AA Empowered To Direct Tenant To Vacate Premises Of Corporate Debtor: NCLAT Delhi

Case Title: M/s. Jhanvi Rajpal Automotive Pvt. Ltd. v R.P. of Rajpal Abhikaran Pvt. Ltd. & Anr.

Case No.: Company Appeal (AT) (Insolvency) No. 1417 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Dr Alok Srivastava (Technical Member) and Mr. Barun Mitra (Technical Member), has held that the Adjudicating Authority is empowered under Section 60(5) of IBC to direct a tenant to vacate the property of Corporate Debtor. The NCLAT Bench has upheld the decision of Adjudicating Authority directing the Tenant to vacate the Corporate Debtor’s property, which impeded implementation of the approved Resolution Plan.

NCLAT Delhi Upholds Dismissal Of Wave Megacity’s Section 10 Application By AA

Case Title: Wave Megacity Centre Private Limited v Rakesh Taneja & Ors

Case No.: Company Appeal (AT) (Insolvency) No. 918 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), had upheld the dismissal of Section 10 of IBC application on behalf of Wave Megacity Centre by the Adjudicating Authority. The Bench observed that the Adjudicating Authority is not obliged to admit application under Section 10 of IBC if the same has been filed fraudulently upon malicious intent.

When COC Approves A Resolution Plan, It Is Presumed To Be Viable And Feasible: NCLAT Delhi

Case Title: Rajesh Kumar & Ors. v Rabindra Kumar Mintri & Anr.

Case No.: Company Appeal (AT) (Insolvency) No.1489 of 2022

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Kanthi Narahari (Judicial Member) and Shri Barun Mitra (Technical Member), has held that when the Committee of Creditors (CoC) approves a Resolution Plan in its commercial wisdom, it is presumed that the Resolution Plan is viable and feasible. The Bench further observed that it is incumbent upon the Authorized Representative of the homebuyers to obtain instructions to vote for any agenda item where CoC obtain votes. Where there is no voting of the CoC in an agenda item, the Authorized Representative’s opinion can be taken note of and considered in the CoC meeting.

NCLAT Issues Fresh Directions For Computation Of Limitation In Filing Of Appeals, Withdraws Earlier Directions

F.No. 23/4/2022-Estt./NCLAT

The National Company Law Appellate Tribunal (“NCLAT”) vide an Order dated 24.12.2022 has issued fresh directions for computation of limitation for filing of appeals before NCLAT. The period of limitation shall be computed from the date of e-filing and hard copy has to be filed within 7 days of e-filing. However, the Competent Authority is at liberty to extend the period of filing hard copy in case of any unforeseen exigency. If hard copy is filed after 7 days, the appeal will be placed before the Tribunal for appropriate order. Further, the requirement of filing Appeals by electronic mode shall continue along with mandatory filing of the Appeals as per Rule 22 of the NCLAT Rules, 2016.

The directions are effective from 24.12.2022 onwards. NCLAT has also recalled its previous circular dated 21.10.2022 bearing F.No.10/37/2018-NCLAT regarding computation of limitation.

Google V Competition Commission: NCLAT Directs Google To Deposit 10% Of Penalty As Interim Measure

Case Title: Google LLC & Anr. v Competition Commission of India

Case No.: Competition Appeal (AT) (ND) No.01 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Alok Srivastava (Technical Member), has admitted Google’s appeal against CCI order dated 20.10.2022, subject to deposit of 10% of penalty amount of Rs. 1337.76 Crores. The Bench has declined to grant any interim relief. The appeal has been filed by Google against the order of Competition Commission of India (CCI), wherein it was concluded that Google perpetuated its dominant position in the online search market, resulting in denial of market access for competing search apps. Further, Google abused its dominant position in the Android OS app store market, to protect its position in online general search. The appeal before NCLAT is next listed on 03.04.2023 for final hearing.

Re-Constituted Bench Cannot Pass An Order Without Re-Hearing The Parties: NCLAT Delhi

Case Title: Rajesh Narang v Durha Vitrak Pvt. Ltd.

Case No.: COMPANY APPEAL (AT)(INS) NO.612/2021

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Rakesh Kumar (Judicial Member) and Dr. Ashok Kumar Mishra (Technical Member), has held that after re-constitution of Bench no order should be passed without re-hearing the matter. It was further observed that when the first order was passed on 20.05.2021, one of the Technical Member was not a party at the time of hearing and reserving orders. For this reason alone, the order dated 20.05.2021 was declared void and fresh hearing was conducted on 31.05.2021. The Bench observed that the order dated 20.05.2021 was reproduced in order dated 31.05.2021, without further hearing or rehearing. The Bench set aside the Order of liquidation dated 31.05.2021 and remitted the matter back to Adjudicating Authority to re-examine and consider changing the Resolution Professional.

NCLT

NCLT Kochi Initiates Insolvency Process Against Personal Guarantor Of Trivandrum International Health Services Ltd.

Case Title: Dhanalaxmi Bank Ltd. v Dr. Bharath Chandran

Case No.: CP (IBC)/24/KOB/2022

The National Company Law Tribunal (“NCLT”), Kochi Bench, comprising of Shri. P. Mohan Raj (Judicial Member) and Shri. Satya Ranjan Prasad (Technical Member), has initiated Insolvency Resolution Process against Dr. Bharath Chandran, the personal guarantor and Promoter of M/s. Trivandrum International Health Services Ltd. The NCLT Bench observed that the Guarantor admitted the Deed of Guarantee, agreed to the terms therein unconditionally and also gave consent to the Creditor and the Borrower to vary the terms of the contract and securities.

NCLT Delhi Rejects Scheme Of Amalgamation For Being Non Compliant Of Section 72A(2) Of Income Tax Act

Case Title: Minda TG Rubber Pvt. Ltd. v Toyoda Gosei Minda India Pvt. Ltd

Case No.: Company Petition (CAA) No. 111 (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 rejected the Scheme of Amalgamation proposed by Minda TG Rubber Pvt. Ltd. for being non compliant of Section 72A(2) of the Income Tax Act, 1961. The Bench observed that the Scheme of Amalgamation was not compliant of Section 72A(2), as there was no undertaking that the Transferee Company shall not dispose of all the assets; shall hold at least three-fourths of the book value of fixed assets of the Transferor Company for at least 5 years; and it shall continue business of the Transferor Company for the next five years. The Bench declined to allow the carry forward and set off of loss and unabsorbed depreciation of Transferor Company in the Transferee Company, which is a condition stipulated in the Scheme.

NCLT Delhi Dismisses Insolvency Plea Against Hindustan Times; “Not A Dispute Redressal Forum”

Case Title: M/s JHS Svendgaard Ltd. v M/s HT Media Ltd.

Case No.: (IB) 400 ND/2022

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 declined to initiate Corporate Insolvency Resolution Process (CIRP) against Hindustan Times (HT Media Ltd.). The Bench further held that NCLT is not a dispute redressal forum. HT Media Ltd. (“Corporate Debtor”) is a mass media company engaged in the business of print, electronic and digital media. HT media’s flagship newspaper is Hindustan Times.