Madras High Court: Adjudicating Authority Must Exercise Jurisdiction Akin To Revisional Jurisdiction To Assess The Correctness Of COC's Actions

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court bench of Justice N. Seshasayee held that though the Adjudicating Authority may not substitute the commercial wisdom of the Committee of Creditors ('CoC'), however, it must exercise jurisdiction akin to revisional jurisdiction to assess the correctness of the actions taken by the CoC.

Madras High Court: MSME Corporate Debtor Can't Misuse Clean Slate Theory To Withhold Information When Its Management Had A Duty To Disclose

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court bench of Justice N. Seshasayee held that an MSME Corporate Debtor cannot exploit the Clean Slate Theory by withholding information, especially when its management, which remained in control, had a duty to disclose such information.

Resolution Applicant Not Bound To Pay Past Dues When No Claim Is Made, Even If Electricity Dues Are Statutory In Character: Meghalaya High Court

Case Title: M/s Reliance Infratel Limited & Anr. vs. State of Meghalaya & Ors.

Case No.: WP(C) No. 238 of 2023

The Meghalaya High Court has held that a State authority cannot compel a successful resolution applicant under Insolvency and Bankruptcy Code, 2016 (I&B Code) to pay past electricity dues, if the State authority has not made any claim in respect of its dues under approved resolution plan.

Madras High Court: Clean State Theory Only Protects Third-Party Successful Resolution Applicant And Not Suspended Board Of Corporate Debtor From Future Claims

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory only protects the third party – Successful Resolution Applicant ('SRA') and not the suspended board of the Corporate Debtor from uncertainties of future claims.

Madras High Court Urges Parliament To Assess Efficiency Of IBC And Consider Recovery Percentage From Successful Resolution Processes

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court bench of Justice N. Seshasayee urged the Parliament to assess and evaluate the working efficiency of the Insolvency and Bankruptcy Code, 2016 ('IBC') and questioned whether the Parliament has considered the general recovery percentage achieved from a successful corporate debtor resolution process.

Madras High Court: Every Claim Of Operational Creditors Includes Right To Their Property Under Article 300A Of The Constitution

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court comprising of Justice N. Seshasayee held that every claim by operational creditors involves a right to their property under Article 300A of the Constitution of India.

Madras High Court: The Successful Working Of IBC Rests On Diligence And Integrity Of IRP And RP

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court stressed and defined the role and responsibilities of the Interim Resolution Professional ('IRP') and Resolution Professional ('RP') to act fairly and transparently to secure the interests of all the stakeholders, particularly operational creditors.

Determination Of Share Title Is Within Civil Court's Domain, Not With NCLT/NCLAT: Telangana High Court

The Telangana High Court bench of Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka has held that the determination of the title of the shares is within the domain of the Civil Court and not the NCLT/NCLAT. The bench held that Section 430 of the Companies Act comes into play only after the title to the shares is decided.

Case Title: Cherukuri Ramakrishna vs Sandhya Hotels Private Limited

Case No.: C.C.C.A. No.57 OF 2023

Madras High Court: Clean State Theory Not Applicable To Undisclosed Creditors Left Out Due To Negligences Of IRP Or RP

Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr.

Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022

The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory shall not apply to undisclosed creditors to protect them from the deliberate non-disclosure or silence of the suspended board of directors or negligence of Interim Resolution Professional ('IRP') or Resolution Professional ('RP') towards disclosing their claims.

NCLAT

NCLAT Refuses Stay On Jaiprakash Associates' Insolvency Proceedings

Case Title: Sunil Kumar Sharma vs ICICI Bank Ltd & Anr

Case No.: Company Appeal (AT)(Insolvency) No.1158-1162 of 2024

The National Company Law Appellate Tribunal (NCLAT) has declined to grant a stay on the National Company Law Tribunal's (NCLT) order admitting Jaiprakash Associates Limited (JAL) into the insolvency resolution process. The Allahabad bench NCLT held that the restructuring proposals and the financial health of JAL were insufficient reasons to delay insolvency proceedings. In 2017, JAL was listed among the 26 major loan defaulters by the Reserve Bank of India, making it a prime candidate for bankruptcy proceedings. Other entities within the Jaypee Group, such as Jaypee Cement Corporation and Jaypee Infratech, are also undergoing insolvency proceedings.

Acceptance Of Partial Payments Doesn't Negate Default Or Legitimacy Of Insolvency Proceedings: NCLAT

Case Title: Mr. Jayesh Dani vs SREI Equipment Finance Ltd. and Anr

Case No.: Company Appeal (AT) (Insolvency) No. 161 of 2024

The National Company Law Appellate Tribunal, Principal Bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) held that the acceptance of partial payments does not negate the default or the legitimacy of the insolvency proceedings.

Adjudicating Authority Can't Venture Into Appreciation Of Merit Of Pre-Existing Dispute, Not Empowered By Section 9 IBC: NCLAT

Case Title: Mr. Sanjay Kumar vs Gannon Dunkerley & Co Ltd and Anr

Case No.: Company Appeal (AT) (Insolvency) No.1210 of 2023

The National Company Law Appellate Tribunal Principal Bench of Justice Yogesh Khanna and Ajai Das Mehrotra held that the adjudicating authority cannot venture into the appreciation of the merit of pre-existing dispute and embark upon the adjudication of rival contentions of parties.

NCLT

CoC Is Empowered To Liquidate Corporate Debtor Any Time After It's Constitution Or Before Resolution Plan Is Confirmed: NCLT Delhi

Case Title: M/s Tri-Wall Pak Private Limited vs M/S 5 Core Acoustics Private Limited

Case No.: I.A. 2892/2023 In Company Petition No. (IB) – 468/ND/2020

The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has held that CoC in the legislative scheme of the Insolvency and Bankruptcy Code, 2016 is empowered to take the decision to liquidate the Corporate Debtor, any time after its constitution and before confirmation of the resolution plan.

NCLT Orders Byju's To Halt Second Rights Issue Amid Allegations Of Mismanagement

Case Title: M/s. MIH Edtech Investments B.V. & Ors. vs M/s. Think & Learn Pvt. Ltd. & Ors.

Case No.: C.A. Nos.71, 72 & 76/2024 in C.P. No.18/BB/2024

The National Company Law Tribunal (NCLT) has directed Byju's to maintain the status quo regarding its shareholding structure. This directive effectively halts the company's controversial second rights issue. The interim order was issued by a special bench consisting of M.S.S. Sundaram (Judicial Member) and Manoj Kumar Dubey (Technical Member) in response to a petition filed by a group of investors alleging oppression and mismanagement.

NCLT Chandigarh: Indemnity Obligation Can't Be Treated As Operational Debt For Lack Of Privity

Case Title: M/s Agarwal Foundries Private Limited vs POSCO E&C India Private Limited

Case No.: CP (IB) No. 109/Chd/Hry/2019

The National Company Law Tribunal Chandigarh bench of Harnam Singh Thakur (Judicial Member) and LN Gupta (Technical Member) held that indemnity obligation pertaining to a guarantee is not applicable in cases involving operational debt.

NCLT New Delhi Initiates Insolvency Proceedings Against Revital Reality Private Limited For Financial Debt And Default

Case Title: Manish Aneja & Ors. vs M/S Revital Reality Private Limited

Case No.: Company Petition IB (IBC) NO. 657/ND/2021

The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has initiated insolvency proceedings against Revital Reality Private Limited noting that it failed to deliver possession of the residential units within the stipulated time frame.

NCLT Orders Insolvency Proceedings Against Himalayan Mineral Waters Following Rs 50 Crore Default

Case Title: Jammu And Kashmir Bank vs Himalayan Mineral Waters Private Limited

Case No.: CP (IB) NO.37/ALD/2022

The National Company Law Tribunal (NCLT) recently ordered the initiation of insolvency proceedings against Himalayan Mineral Waters, following a plea by Jammu and Kashmir Bank. The decision came after Himalayan Mineral Waters, acting as the corporate guarantor for Leel Electricals, failed to repay a debt amounting to Rs 50 crore. This debt was owed to Jammu and Kashmir Bank which arose from credit facilities obtained by Leel Electricals.

NCLT Chandigarh Bench Approves Air India-Vistara Merger

Case Title: In the matter of Composite Scheme of Arrangement amongst Talace Pvt. Limited and Tata Sia Airlines Ltd. and Air India Ltd. and their respective shareholders.

Case No.: Company Petition No. (CAA)-41/CHD/HRY/2023 connected with Company Application No. CA (CAA)-28/CHD/HRY/2023

The National Company Law Tribunal (NCLT) Chandigarh bench of Harnam Singh Thakur (Judicial Member) and L. N. Gupta (Technical Member) has given its approval for the merger of Air India and Vistara. The merger, which was initially announced in November 2022, has received the green light from various stakeholders and regulatory bodies.

Breach Of Settlement Agreement Not 'Operational Debt' Under Section 5(21) Of IBC: NCLT Kolkata

Case Title: M/s. Amrik Cranes and Infrastructure vs Simplex Infrastructures Limited

Case No.: Company Petition (IB) No. 202 (KB) of 2022

The National Company Law Tribunal Kolkata bench of Justice Bidisha Banerjee (Judicial Member) and D. Arvind (Technical Member) has held that the breach of settlement agreement between the operational creditor and corporate debtor does not fall within the ambit of “Operational Debt” as per Section 5 (21) of the IBC. Further, the bench held that NCLT was not the forum where parties could seek implementation of the Settlement Agreement.

Section 9 Application Is Not Maintainable In Absence Of Strict Proof Of Debt And Default: NCLT Mumbai

Case Title: Mittal Polymers vs Suvarna Additives Private Limited 

Case No.: CP (IB) No. 95/MB/2022

The National Company Law Tribunal, Mumbai bench, comprising Shri K. R. Saji Kumar (Judicial Member) and Shri Sanjiv Dutt (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) has held that Section 9 Application is not maintainable in the absence of strict proof of debt and default.