IBC | Resolution Plan Approved By CoC Can't Be Withdrawn or Modified By Resolution Applicant: Supreme Court

Case Title: Deccan Value Investors L.P. & Anr. Versus Dinkar Venkatasubramanian & Anr.

Citation: 2024 LiveLaw (SC) 265

The Supreme Court has reiterated that once a resolution plan is approved by the Committee of Creditors (“CoC”) then it becomes impermissible for the resolution applicant to withdraw or modify the resolution plan.

The Bench Comprising Justices Sanjiv Khanna and Dipankar Datta referred to the Judgment of Ebix Singapore Private Limited v. Committee of Creditors of Educomp Solutions Limited and Another, where the Supreme Court elaborated and set out several reasons why the resolution applicant cannot be permitted to withdraw or modify the resolution plan after approval by the Committee of Creditors, and before an order under Section 31(1) of the Code is passed.

The court observed that due to the absence of any statutory provision in the Insolvency and Bankruptcy Code, it is impermissible for the resolution applicant to modify or withdraw the resolution plan after the plan was approved by the CoC.

“The effect of approval by the adjudicating authority under Section 31(1) of the Code makes the resolution plan binding on all stakeholders, even those who are not members of the Committee of Creditors. The scrutiny by the adjudicating authority for grant of approval in terms of Section 31(1), read with other provisions of the Code, is limited and restricted. It does not allow or permit the resolution applicant to unilaterally amend/modify or withdraw the resolution plan post approval by the Committee of Creditors.”, the court said.

NCLAT

When Order Passed In Presence Of Both Parties' Counsels, Limitation To File Appeal Commences From Date Of Order: NCLAT Delhi

Case title: Supreme Construction Developers Pvt. Ltd. v Puranik Builders Ltd.

Case No.: Company Appeal (AT) (Insolvency) No. 215 of 2024.

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice Yogesh Khanna (Judicial Member) and Shri Barun Mitra (Technical Member), has held that when an order is passed in presence of counsels of both the parties, then the parties cannot claim that they were unaware of the order. Accordingly, the limitation to file appeal before NCLAT would commence from the date of order, and not the date of upload of order on NCLT website.

Section 12(2) of the Limitation Act, 1963 states that while computing limitation for filing an appeal, review or revision, the date on which the judgment was pronounced and the time taken to obtain copy of the judgment shall be excluded.

The Bench opined that when NCLT passes an order, the party is obligated to apply for certified copy to seek benefit of Section 12 of Limitation Act. Since the Appellant applied for certified copy after 30 days of passing of order, the Bench declined to exclude the period from computation of limitation.

Tribunal Not Empowered To Hear Case Afresh Under Recall Jurisdiction: NCLAT Chennai

Case title: Adv. (CA) V. Venkata Sivakumar v Hari S. Hari Karthik & Ors.

Case No.: Comp. App (AT) (CH) (INS) No. 8 / 2022

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that the Tribunal cannot hear a case de-novo while adjudicating an application filed for recall of an order. The Bench has dismissed a review application filed by an Applicant seeking recall of an NCLAT order. The Bench has held that the meaning of 'recall' cannot be expanded to be read as a synonym for 'review'.

“At this juncture, this Tribunal, aptly points out that the Power to Recall of an Order or Judgment of a Tribunal, can be exercised by it only, if any procedural error, committed, in pronouncing the earlier Order or Judgment. In addition, the Power to Recall an Order / Judgment, earlier passed by this Tribunal, is not the power to Re-hear the case De-novo, to find out any Apparent error, in the Order / Judgment, which is in the ambit of a Review of a Judgment, to examine the Judicial Propriety or any Apparent Error, committed, by the Court / Tribunal, which is not the case made out in the instant Review Application, which is sought to be read as Recall, by the Petitioner/Erstwhile Liquidator.”

Erstwhile Liquidator Can't Seek Recall Of An Order In His Personal Capacity After Being Replaced By Another Liquidator: NCLAT Chennai

Case Title: Adv. (CA) V. Venkata Sivakumar v Hari S. Hari Karthik & Ors.

Case No.: Comp. App (AT) (CH) (INS) No. 8 / 2022

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Justice Sharad Kumar Sharma (Judicial Member) and Shri Jatindranath Swain (Technical Member), has held that a Liquidator, after being replaced with another liquidator, cannot seek recall of an order in his personal capacity. If the erstwhile liquidator is aggrieved by an order passed by NCLAT then the remedy would lie in appeal under Section 62 of IBC.

The erstwhile Liquidator had filed an appeal before the NCLAT. In the meanwhile, the erstwhile Liquidator was replaced with new Liquidator, who withdrew the appeal before the NCLAT. The Erstwhile Liquidator filed a review application before NCLAT seeking recall of the order whereby appeal was withdrawn. The NCLAT dismissed the review application citing that the erstwhile Liquidator has no locus standi to file such application or question the decision taken by New Liquidator in his official capacity.

NCLAT Delhi; IBC Does Not Provide Any Scope For Dissatisfied Homebuyers In Minority To Override Majority Decision Of COC

Case - Mr. Girish Nalavade Vs. Bhrugesh Amin and Ors.

Citation - Company Appeal (AT) (Insolvency) No. 1542 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 IBC does not provide any scope for dissatisfied homebuyers in the minority to override the majority decision taken by the Committee of Creditors (COC).

NCLT

NCLT Kolkata: Any Attachment Of Tainted Assets Of Corporate Debtor Before CIRP Commencement Would Always Be Available To Fulfill The Object Of IBC

Case Title: State Bank of India vs. Shree Mahalaxmi Corporation Pvt. Ltd.

Case No.: Company Petition (IB) No. 130/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member), has held that Any attachment of tainted assets of a Corporate Debtor before the Corporate Insolvency Resolution Process ('CIRP') commencement would always be available to fulfill the object and goal of IBC.

NCLT Kolkata: Provisional Attachment Order Under PMLA Won't Bar Admission Of CIRP Against Corporate Debtor Under IBC

Case Title: State Bank of India vs. Shree Mahalaxmi Corporation Pvt. Ltd.

Case No.: Company Petition (IB) No. 130/KB/2022

The National Company Law Tribunal ('NCLT') Kolkata, comprising Smt. Bidisha Banerjee (Judicial Member), and Shri D. Arvind (Technical Member) held that the Provisional Attachment Order under PMLA will not bar the admission of Corporate Insolvency Resolution Process ('CIRP') proceedings against the Corporate Debtor under IBC.

NCLT Mumbai: Timeline Provided By CIRP Regulation 36A(6) Must Be Adhered To Strictly

Case Title: Shree Siddhivinayak Cotspin Pvt. Ltd. vs. Rajan Deshraj Agarwal and Anr.

Case No.: IA No. 2390 of 2023 In CP(IB) 518 (IB)2020

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice Kuldip Kumar Kareer (Judicial Member) and Mr. Anil Raj Chellan (Technical Member), has held that the timeline provided by the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ('CIRP Regulation') 36A(6) must be adhered to strictly.

NCLT Chandigarh - Minimum Threshold Will Be Applicable To Any Amount Raised From Allottee

Case: Mr. Tek Chand Narula vs M/s Vatika Ltd.

Citation: CP (IB) No.528/Chd/Hry/2019 & IA No. 302/2022

The National Company Law Tribunal (NCLT), Chandigarh bench, comprising Justice Dr. P.S.N. Prasad (Judicial Member) and Shri Umesh Kumar Shukla (Technical Member), has held that the requirement of satisfying the minimum threshold of either 10% or 100 allottees will be applicable to any amount raised from an allottee, irrespective of whether the said allottee is alleging the default of interest or the principal amount.