Arbitral Award For Claims Not Included In IBC Resolution Plan Can't Be Enforced: Supreme Court

The Supreme Court recently allowed an appeal challenging the enforcement of an arbitral award passed by the Micro and Small Enterprises Facilitation Council (MSEFC) against Electrosteel Steels Ltd., holding that the award was non-executable in view of the resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.“we have no hesitation to hold that upon approval of the resolution plan by the NCLT, the claim of the respondent being outside the purview of the...

Adjudicating Authority Cannot Declare Sale Of Going Concern As Void Without Any Challenge: NCLAT New Delhi

The Principal Bench of NCLAT, New Delhi, consisting of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member-Technical), set aside the NCLT, Ahmedabad Bench's order and held that a sale of the corporate debtor as a going concern cannot be declared null and void suo moto by the Adjudicating Authority in the absence of any challenge to such sale. The Adjudicating Authority had earlier nullified the sale and imposed penalties on the liquidator. Background Application under Section...

Financial Creditors Proceeding With Application U/S 7 Only As A Recovery Measure Is Not The Objective Of IBC: NCLAT

The National Company Law Appellate Tribunal, Principal Bench, New Delhi (NCLAT) comprising of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member Technical) dismissed and appeal filed by a suspended director of the Corporate Debtor (Maneesh Pharmaceuticals Limited) challenging the order of admitting Section 7 application by the National Company Law Tribunal (NCLT), Mumbai Bench. Background An appeal was filed by Mr. Maneesh Ramakant, a suspended director of the Corporate...

Adjudicating Authority Cannot Declare A Sale Transaction Void U/S 66(1) Of IBC: NCLAT New Delhi

The Principal Bench of the NCLAT, New Delhi, presided over by Justice Ashok Bhushan (Chairperson) along with Barun Mitra (Member-Technical), has modified an order passed by the Adjudicating Authority (NCLT, Mumbai) and partly allowed an appeal. The tribunal partly set aside the Adjudicating Authority's order, which invalidated the transfer of two flats to the appellants, but upheld the direction to repay the fraudulent consultancy charges. The tribunal held that the Adjudicating Authority...

Section 94 Of IBC Cannot Be Used To Hinder Recovery Process Under SARFAESI Act: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising of by Justice Ashok Bhushan (Chairperson), Barun Mitra (Member-Technical), and Arun Baroka (Member-Technical) has upheld the dismissal of a Section 94 IBC petition filed by the personal guarantor and held that IBC proceedings cannot be misused to obstruct legitimate recovery under SARFAESI Act. It was held that the right given under Section 94 of the IBC cannot be taken away solely because of the ...

Section 45 Of IBC Applies To Transactions Made Prior To CIRP, Not On Date Of Initiation: NCLAT Principal Bench, New Delhi

The National Company Law Appellate Tribunal, (NCLAT), Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson), Barun Mitra (Member (Technical) and Arun Baroka (Member (Technical) dismissed joint appeals filed by eight appellants against a common judgment of the adjudicating authority (NCLT, New Delhi) in various interlocutory applications (IAs) challenging the cancellation of residential unit allotments in the project developed by Corporate Debtor. Background ...

Application U/S 95 Of IBC Against Personal Guarantors Not Barred By Change In Debt Quantum After Approval Of Plan Against Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that a change in the quantum of debt to be paid by the personal guarantor, following the approval of the resolution plan in the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor, does not negate the right of the creditors to proceed against the personal guarantor under Section 95 of the Insolvency and Bankruptcy...

Creditor Obtaining Award Directing Real Estate Firm To Not Create Third-Party Interest In Specified Units Doesn't Amount To 'Security Interest': NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that merely obtaining an arbitral award in which the corporate debtor was directed not to create any third‑party interest in specified units does not amount to creating a “security interest” within the meaning of Section 3(31) of the Insolvency and Bankruptcy Code, 2016 (Code). Therefore, a creditor relying solely on such an award...

Petition U/S 9 Of IBC Cannot Be Entertained Based On Fabricated Invoices Created To Pursue Revenge Litigation Against Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that a Section 9 petition under the Insolvency and Bankruptcy Code, 2016 (Code) cannot be admitted when the operational creditor has used its control over the corporate debtor's affairs to fabricate invoices and drag the company into insolvency on account of personal or matrimonial disputes pending between the creditor's partners and ...

Absence Of Record In Information Utility Negates Claim Of Pre-Existing Dispute: NCLT Bengaluru

The National Company Law Tribunal, Bengaluru Bench, Bengaluru comprising of Hon'ble Shri Sunil Kumar Aggarwal (Member (Judicial) and Hon'ble Shri Radhakrishna Sreepada, (Member (Technical) admitted a Section 9 application filed by the operational creditor (PAN Oceanic Seed Solutions Private Limited) due to the presence of operational debt and non-repayment despite repeated reminders from the Corporate Debtor. Background The following Section 9 application has been filed by PAN...

NCLAT Upholds Order Directing Suspended Directors To Repay ₹32 Lakh Which Was Withdrawn During CIRP, Imposes ₹5 Lakh Cost

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has upheld the order of the Adjudicating Authority directing the suspended directors of the Corporate Debtor to return the Rs.32 lakh along with interest they had withdrawn during Corporate Insolvency Resolution Process (CIRP). It also imposed costs of Rs.5 lakh on the respondents for repeatedly raising...

Liquidated Damages Validly Deducted During CIRP Cannot Be Refunded After Approval Of Resolution Plan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that once the Resolution Professional opted to continue the contract during Corporate Insolvency Resolution Process (CIRP), all its terms including liquidated‑damages deductions from invoices will remain binding. These deductions cannot be faulted, and no refund can be ordered after the approval...