NCLT Orders Disciplinary Proceedings Against Resolution Professional Of BYJU's, Says He Acted With Prejudice To Mislead Tribunal

The National Company Law Tribunal, Bengaluru bench comprising Justice K. Biswal (Judicial Member) and Ravichandran Ramasamy (Technical Member) have held that that as per the Insolvency and Bankruptcy Code, 2016 (“Code/IBC”), there is no provision to 'provisionally' constitute the Committee of Creditors (“CoC”); the CoC once constituted is final and cannot be revised or reconstituted by the Interim Resolution Professional (“IRP”)/Resolution Professional (“RP”) without the interference...

IBC Weekly Round Up[27th January-2nd February 2025]

Nominal Index: INDEPENDENT SUGAR CORPORATION LTD. V. GIRISH SRIRAM JUNEJA & ORS., CIVIL APPEAL NO. 6071 OF 2023, 2025 LiveLaw (SC) 126 Dharamshi K. Patel & Anr. vs. Indian Bank & Ors., WP.No,712/2024 and WMP.Nos.730 & 732/2024 Umang Realtech Pvt. Ltd. vs. Mrs Daphne Reita Rajan Sharma & Anr., RERA APPEAL 7/2024 HDFC Bank Ltd. Versus Pratim Bayal, Resolution Professional of Birla Tyres Ltd. & Ors., Company Appeal (AT) (Insolvency) No. 1472 of 2023 ...

Pre-Existing Dispute Between Financial Creditor And Corporate Debtor Doesn't Bar Petition U/S 7 Of IBC: NCLT

The National Company Law Tribunal, New Delhi bench comprising Chief Justice (Retd.) Ramalingam Sudhakar (President) and Avinash K. Srivatava (Technical Member) has held that a pre-existing dispute between the Financial Creditor and Corporate Debtor does not bar a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) to be entertained. The Tribunal also held that a claim of the Financial Creditor which did not form part of the Resolution Plan of the Holding/Parent...

Commercial Wisdom Of CoC To Distribute Amount Based On Security Interest Under Resolution Plan Cannot Be Interfered With: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that commercial wisdom of the CoC to distribute the amount under the Resolution Plan based on security interest of the respective financial creditors cannot be interfered with provided provisions of the code are complied with.Brief Facts:Birla Tyres Limited (corporate debtor) was admitted into insolvency on May 5, 2022. In the 16th meeting of the...

Proviso To S.10A Of IBC Doesn't Bar CIRP Applications Where Default Continues Beyond Moratorium Period: Madras High Court

The Madras High Court bench comprising Justice S.S. Sundar and Justice P. Dhanabal has held that the proviso to Section 10-A of the Insolvency and Bankruptcy Code (IBC) does not extend to cases where the default continues beyond the moratorium period. The court noted that Section 10-A only imposes a moratorium temporarily suspending the initiation of the Corporate Insolvency Resolution Process (CIRP). Section 10-A bars an application for initiation of CIRP of a Corporate Debtor, for...

Creditors Are Not Barred From Enforcing Personal Guarantee Signed On Their Behalf By Trust: NCLAT

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that creditors are not barred from enforcing a personal guarantee even if they were not party to the trusteeship deed signed on their behalf between a trust and the personal guarantors. Brief Facts: The present appeal has been filed against an order passed by the Adjudicating Authority by which an application under section 95 was admitted. Contentions: The...

Decision To Liquidate Corporate Debtor Cannot Be Faulted When Revival Is Not A Viable Option: NCLAT

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that when it becomes clear that revival is not a viable option, a decision taken by the CoC to liquidate the corporate debtor cannot be faulted. Brief Facts: Principal Borrower M/s Universal Textile Waterproof Company (India) (UTWC) was granted term loans and working capital facilities by SVC Cooperative Bank in which Shri...

IBC | For Resolution Plan Involving Combination, Prior Approval Of Competition Commission Mandatory Before CoC Examination : Supreme Court

The Supreme Court on January 29, by 2:1 majority, observed that a resolution plan under the Insolvency and Bankruptcy Code, containing a proposed combination(a merger or amalgamation of entities), should only be placed before the Committee of Creditors (CoC), after it has been approved by the Competition Commission of India (CCI).In this regard, the Court referred to Section 31(4) proviso of the IBC. This proviso talks about the approval of the resolution plan and its proviso reads as:“Provided...

NCLAT Upholds Rejection Of Application U/S 9 Of IBC Against Hindustan Unilever Limited

The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has dismissed the appeal against the order rejecting the application under section 9 of the Insolvency and Bankruptcy Code filed against Hindustan Unilever Limited on the ground that the claims were below the threshold limit, time-barred and there was a pre-existing dispute. Background Facts The Appellant-Operational Creditor had filed an application against...

Withdrawal Of Liquidation Application Can Be Permitted When CoC Allows RP To File Application Seeking Extension Of CIRP Time Period: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that when the CoC has already taken decision to file an application for extension of CIRP time period and granting permission to publish Form G for third time, withdrawal of liquidation application by Adjudicating Authority can be permitted. Brief Facts: The present appeal has been filed against an order passed by the Adjudicating...

Liquidation Proceeds Must Be Distributed Amongst Secured Creditors Based On Admitted Claims U/S 53 Of IBC: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mita (Technical Member) has held that liquidation proceeds must be distributed as per section 53 of the IBC based on admitted claims of the respective secured creditors and cannot be distributed on the basis of security interest of different Secured Creditors. Brief Facts The corporate debtor was admitted into insolvency on the basis of an application filed by the State Bank of India under section 7 of...

Assets Of Subsidiary Can't Be Treated As Assets Of Holding Company In CIRP: NCLAT Sets Aside Order Directing Fresh Valuation Of Assets

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has observed that the assets of a subsidiary company cannot be treated as part of the assets of its holding company in a Corporate Insolvency Resolution Process (CIRP). The Tribunal held that the Adjudicating Authority does not have the jurisdiction to direct fresh valuation of such assets when they are owned by the subsidiary...