NCLAT Delhi Upholds Reduction Of Resolution Professional’s Fee By NCLT

Case Title: Rohit J. Vora v Religare Finvest Ltd. & Ors.

Case No.: Company Appeal (AT)(Insolvency) No. 104 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 upheld the NCLT order whereby the fee of the Resolution Professional was reduced from Rs. 3.75 Lakhs + GST to Rs. 1 Lakh + GST.

The Bench observed that there was deficiency in the Resolution Professional’s performance, such as failure to publish Form G, invite Expression of Interest and to obtain any successful resolution plan for the Corporate Debtor within 180 days from the initiation of CIRP.

“Given the material on record and the facts and circumstances in the present matter, we are therefore inclined to agree with the finding of the Adjudicating Authority that the active CIRP period having expired with no substantial work to be taken up further and the Covid pandemic also having generally disrupted work, the scaling down of the fees to Rs 1 lakh was not discriminatory or unfair.”

Differential Payments Can Be Made To Assenting And Dissenting Unsecured Financial Creditors: NCLAT Delhi

Case Title: Peter Beck and Partner Vermoegensverwaltung GMBH v Sharon Bio-medicine Limited & Ors.

Case No.: Company Appeal (AT) (Insolvency) No. 912 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 differential payments can be made between the unsecured Financial Creditors who voted in favour of the plan and the ones who voted against it. The Bench ruled that, “we are of the view that assenting financial creditors entitled for payment as proposed in the plan and dissenting financial creditor is entitled as per the minimum entitlement as per Section 30(2)(b).”

Go Airlines | NCLAT Delhi Permits Lessor To Conduct Inspection Of Leased Aircraft Engines

Case Title: Engine Lease Finance B.V. v Resolution Professional of Go Airlines (India) Ltd. & Anr.

Case No.: Comp. App. (AT) (Ins.) No.1088 of 2023

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), while adjudicating an appeal filed in Engine Lease Finance B.V. v Resolution Professional of Go Airlines (India) Ltd. & Anr., has permitted the lessor of aircraft engines of Go Airlines to conduct inspection of the leased engines.

“We are of the view that inspection be permitted within 10 days from today. As observed above, the observations made in the impugned order being at prima facie stage need not be treated as final expression of opinion by the Adjudicating Authority and all contention of both the parties are left open.”

NCLAT Chennai Reprimands Bank For Filing Appeal With Delay, Refuses To Condone

Case Title: DCB Bank Limited v Ramakrishnan Sadasivam & Ors.

Case No.: Company Appeal (AT) (CH) (Ins) No. 207/2023

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has reprimanded the conduct of a Bank which filed an appeal exactly on the 45^th day, despite having huge machinery at its disposal to prepare and file the appeal within statutory period of 30 days.

“Looking from any another angle, even if it is taken then that the appeal has been filed on 15th day of the extended period of 15 days even then there is no sufficient cause assigned by the Appellant as to why it had taken exactly 45 days in filing the appeal against the order dated 03.03.2022. The reasons are conspicuous by its absence especially when the Appellant is a Bank who had huge machinery at its disposal for the purpose of preparing the appeal and filing the same within the statutory period of 30 days.”

IBC | Sec. 9 Petition Not Maintainable Against Claim For Compensation Penalty Under A Contract: NCLAT Delhi

Case title: Chandrashekhar Exports Pvt. Ltd. v Babanraoji Shinde Sugar & Allied Industries Ltd.

Case No.: Company Appeal (AT) (Insolvency) No.1032 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 upheld the dismissal of a petition under Section 9 of IBC which was filed based on claim of compensation penalty under a contract. The Bench held that whether a claim for compensation penalty has crystallized or not is to be adjudicated by a competent Court and not the Adjudicating Authority.

NCLAT Chennai Stays Insolvency Proceedings Against Café Coffee Day’s Parent Company

Case Title: Malavika Hegde v Indusind Bank Ltd. & Anr.

Case No.: Company Appeal (AT) (CH) (Ins) No.235/2023

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mrs. Shreesha Merla (Technical Member), has stayed the Corporate Insolvency Resolution Process (CIRP) of M/s Coffee Day Global Ltd. which was initiated by the NCLT on 20.07.2023.

M/s Coffee Day Global Ltd. is the parent company of the Coffee Day Group and Coffee Day Enterprises Ltd., which runs a multinational coffeeshop named ‘Café Coffee Day’.

Sec. 10A Inapplicable To Defaults Committed Prior To 25.03.2020; NCLAT Chennai Says Explanation To Sec. 10A Removes All Doubts

Case Title: Carissa Investments LLC v Indu Techzone Pvt. Ltd. & Ors.

Case No.: Company Appeal (AT) (CH) (Ins) No.124/2022

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice M. Venugopal (Judicial Member) and Ms. Shreesha Merla (Technical Member), has held that the Explanation to Section 10A of IBC removes any doubt by clarifying that the prohibition to initiate CIRP would be inapplicable to defaults committed prior to 25.03.2020.

“The object of the legislation was to suspend the operation of Sections 7, 9 and 10 in respect of defaults arising on or after March 25th 2020 when the lockdown was disrupting normal business operation. This Tribunal is of the considered view that the ‘Explanation’ removes any doubt by clarifying that the provisions of the Section shall not apply in respect of any default committed prior to 25.03.2020.”

NCLT

NCLT Delhi Upholds Termination Of Related Party Agreements By Resolution Professional With Coc’s Consent

Case Title: India SME Asset Reconstruction Company Limited v M/s Medirad Tech India Limited

Case No.: Company Petition No. (IB)-1243(ND)/2018

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 upheld the termination of Related Party agreements (Service & Lease Agreements) by the Resolution Professional since the Committee of Creditors (CoC) had given ‘No Objection’ for such termination.

Successful Resolution Applicant Can Seek Termination Of Related Party Contracts Via Clauses In Resolution Plan: NCLT Delhi

Case Title: India SME Asset Reconstruction Company Limited v M/s Medirad Tech India Limited

Case No.: Company Petition No. (IB)-1243(ND)/2018

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 held that the Successful Resolution Applicant can seek termination of Related Party contract/agreement through relevant clauses in the Resolution Plan.

NCLT Mumbai Refuses To Admit Belated Claim Of EPFO Submitted Post Approval Of Resolution Plan By The CoC

Case Title: Small Industrial Development Bank of India v E & G Global Estates Limited

Case No.: CP (IB) No. 2995/MB/2019

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), has refused to admit the claim of Employee Provident Fund Organization (EPFO), which was submitted belatedly after the approval of resolution plan by the Committee of Creditors.

“In view of the above discussion this bench is of the considered view that at this belated stage when the Resolution plan has already been approved by the members of the COC in its 8th meeting dated 20.04.2021, the belated claim filed by the Applicant cannot be entertained, as such claims would defeat the very purpose of the CIRP process which is supposed to conclude in a time bound manner.”

Stock Broker Company Is A Financial Service Provider Under IBC: NCLT Delhi

Case Title: M/s Bezel Stockbrokers Private Limited v Security Exchange Board of India & Anr.

Case No.: Company Petition No. (IB)-251(ND)/2021

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Ashok Kumar Bhardwaj (Judicial Member) and Shri L.N. Gupta (Technical Member), has held that a stock broker company is a financial service provider under IBC. “Since Corporate Applicant, being a stock broker, was dealing in the activities of buying, selling, or dealing in securities etc., which in terms of Section 3(15) of IBC 2016 are a “Financial Product” belonging to another person. Hence, in terms of Section 3(16) of IBC 2016, the Corporate Applicant was providing “Financial Service” or in other words, it was a “Financial Service Provider”.”

NCLT Notifies Re-Constitution Of All Benches w.e.f. 21st August 2023

File No. 10/03/2023-NCLT

The National Company Law Tribunal (“NCLT”) has issued a circular dated 18.08.2023, intimating the re-constitution of all sixteen NCLT Benches across India. The re-constitution has taken place in view of the Ministry of Corporate Affairs circular dated 16.08.2023, whereby the newly appointed NCLT Members were assigned benches. The reconstitution is effective from 21.08.2023.

The re-constituted benches are as under: