Non Impleadment Of Owner As Party By Liquidator In Application U/S 19 Of IBC Not Malafide If Ownership Was Uncertain: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Barun Mitra (Technical Member) has held that non impleadment of the owner in application under section 19 of the code filed by the liquidator due to the uncertainty over the ownership of the premises cannot be termed malafide. Brief Facts The Corporate Debtor-Gujarat NRE Coke Ltd. had been admitted into liquidation on 11.01.2018 and the present Respondent-Mr. Sumit Binani...

IBC | Financial Creditor Can Submit Claim Even If There Is No Default Of Debt : Supreme Court

The Supreme Court has observed a default is not necessary for a debt to become a financial debt under the Insolvency and Bankruptcy Code, 2016. A bench comprising Justice Abhay S Oka and Justice Augustine George Masih held that under Section 5(7) of the IBC, any person to whom financial debt is owed becomes a Financial Creditor even if there is no default in payment of debt. "Therefore, for submitting the claim by a Financial Creditor, there is no requirement of actual default," the Court...

Resolution Plan Approved By CoC Binds All Stakeholders Including Dissenting Financial Creditor: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Barun Mitra (Technical Member) has held that the Resolution Plan which is approved in commercial wisdom of the CoC binds all stakeholders including the dissenting financial creditor. The commercial wisdom of the CoC approving the Resolution Plan is binding on all Brief Facts The present appeal has been filed against an order passed by the NCLT on July 9, 2020 by which an interlocutory application filed by the ...

Date Of Default In Case Of Personal Guarantor Depends On Terms Of Contract Of Guarantee: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Barun Mitra (Technical Member) has held that the liability of a borrower and guarantor is co-extensive but the liability of a Guarantor stems from the contract of guarantee and therefore the date of default in the case of the guarantor depends on the terms of contract of guarantee. Brief Facts The present appeal has been field under section 61 of the code challenging an order...

Non-Admission Of Claim By Resolution Professional Cannot Be Challenged First Time In Appeal Before Appellate Tribunal: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that non admission of claim in the Resolution Plan by the Resolution Plan if not challenged before the Adjudicating Authority cannot be challenged in the appeal before the NCLAT. Brief Facts The present appeal has been filed against an order passed by the NCLT by which the resolution plan was approved.The corporate debtor was admitted into insolvency on May 14, 2018....

CIRP Can't Be Extended Beyond 330 Days U/S. 12(3) Of IBC Absence Of “Exceptional Circumstances”: NCLAT

The NCLAT bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has observed that the maximum timeline prescribed under Section 12(3) of the Insolvency and Bankruptcy Code (IBC) is 330 days. While this period is directory (not mandatory), an extension beyond 330 days is permissible only in “exceptional circumstances”, where a short time is required to complete the CIRP. The Tribunal held that the period sought to be excluded was 252 days, which is huge, hence...

Copy Of Other Prospective Resolution Applicants' Plans Cannot Be Shared When Suspended Management Is Also A Resolution Applicant: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that copy of the Resolution Plans submitted by other Prospective Resolution Applicants cannot be shared in advance with the suspended management of the corporate debtor when the suspended management is also a Resolution Applicant. Brief Facts The present appeal has been filed by the suspended management of the corporate debtor against an order passed by the ...

Pendency Of Proceedings Before NCLT For Approval Of Scheme Of Arrangement Does Not Preclude Financial Creditor From Filing Petition U/S 7: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that the pendency of proceedings before the NCLT for approval of the scheme of arrangement does not preclude the Financial Creditor to proceed with Section 7 application. The tribunal also held that direction of RBI under Section 35AA of Banking Regulation Act, 1949 for initiation of insolvency cannot be disregarded/ ignored while...

IBC Weekly Round-Up [9th December To 15th December 2024]

NOMINAL INDEXIndian Renewable Energy Development Agency Limited Versus Waaree Energies Limited and Anr., Company Appeal (AT) (Insolvency) No.1380 of 2024 Suraksha Asset Reconstruction Ltd. Vs. Varsha Bagri, Liquidator of Bharat NRE Coke Ltd., Company Appeal (AT) (Insolvency) No. 650 of 2024 & I.A. No. 2325 of 2024 Harish Chander Arora Liquidator of Rathi Super Steel Ltd. Versus The Principal Commissioner of Income Tax, Ghaziabad, & Anr., Comp. App. (AT) (Ins) No. 306 of...

Disbursement Of Non Fund-Based Facilities Cannot Be Refused By Lenders When Resolution Plan Contains Clause For Disbursement: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that Non Fund Based facilities cannot be refused to be disbursed when the approved Resolution Plan contains a clause for their disbursement. Brief Facts These appeals have been filed by the financial creditors against an order passed by the Adjudicating Authority by which applications filed by the corporate debtor and certain investors were ...

NCLT Can Allow Date Of Default To Be Amended In CIRP Proceedings: NCLAT

The National Company Law Appellate Tribunal (NCLAT) bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the NCLT is empowered to allow the parties to amend the pleadings before the final orders in Corporate Insolvency Resolution Process (CIRP) proceedings are passed. In other words, the Tribunal has discretion to amend the default date after the CIRP petition is filed. The Tribunal also held...

Deposit In Pursuance Of One Time Settlement Proposal Remains Corporate Debtor's Asset If Settlement Fails: NCLAT

The NCLAT New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that the amount deposited with the bank by the corporate debtor in pursuance of an One Time Proposal to show bonafides will remain assets of the corporate debtor and can be taken into custody by the RP under section 18 of the code when the said proposal is not materialised. Brief Facts The present appeal has been filed against an order passed on May 3, 2021 by...