Filing Petition U/S 10 Of IBC Subsequent To Action Taken Under SARFAESI Act Cannot Be Termed Malicious Or Fraudulent: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has held that merely because proceeding under Section 13, sub-section (2) and (4) of the SARFAESI Act has been initiated by the creditor prior to filing of Section 10 application, cannot be a ground to hold that Section 10 application is filed with malicious and fraudulent intent to be rejected under section 65 of the IBC.Brief FactsThis Appeal has been filed by a Corporate Applicant, challenging...

Allotment Of Commercial Space By Corporate Debtor Through Unregistered Allotment Letter Remains Their Asset, Can't Be Excluded From Resolution Plan: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) has held that allotment of commercial spaces by the corporate debtor through unregistered documents like allotment letter, lease deed etc.cannot divest the CD of their ownership. They would continue to remain the assets of the CD therefore they cannot be excluded from the Resolution Plan.Brief FactsThe Corporate Debtor – M/s IP Construction Pvt. Ltd., a real estate company, involved in development...

Since Shareholders Of Corporate Debtor Do Not Fall Within Definition Of “Aggrieved Party”, Appeal Filed U/S 61 Of IBC Not Maintainable: NCLAT

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member),Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) affirmed that a shareholder of the company is not the “aggrieved party” as per the provisions of the Code therefore appeal filed by him under section 61 of the Code would not be maintainable.Brief FactsThis appeal has been filed by Clarion Health Food LLP under section 61 of the Insolvency and Bankruptcy Code, 2016. (in short 'Code')...

CoC Has Authority To Modify Resolution Plan To Comply With Directions Of Supreme Court: NCLAT

The NCLAT has affirmed that the CoC is empowered to modify the resolution plan in order to comply with the directions issued by the Supreme Court. In this case,while resolution plan was pending before the Adjudicating Authority, the Supreme Court passed its decision in State Tax Officer in which it was held that the debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank equally with other specified debts including debts on account of workman's dues...

NCLAT Judge Records In Order His Brother's Message For Favour, Recuses From Matter

A judicial member of the National Company Law Appellate Tribunal has recused from hearing a matter after his brother messaged him requesting favourable orders in the case.Interestingly, in the recusal order, the judge extracted the entire message verbatim.The extraordinary event took place before the bench presided by Justice Sharad Kumar Sharma at the NCLAT Chennai Bench. Justice Sharma stated in the order that he was "approached" by his real brother.The message was extracted as follows...

IBC Weekly Digest: 11th November To 17th November 2024

Nominal Index 1. Central Bank of India Versus Deepen Arun Parekh, Company Appeal (AT) (Insolvency) No. 697 of 2024 2. CADILLAC INFOTECH PVT. LTD.Versus JKM INFRASTRUCTURE PVT. LTD and Ors., Company Appeal (AT) (Insolvency) No. 1610 of 2024 & I.A. No. 5879 of 2024 3. Globomet Engineering Private Limited Versus Shri Tejas J Parikh and Ors., Company Appeal (AT) (Insolvency) No. 1080 of 2022 4. Chandrakant Khemka Versus Santanu Bhattacharjee and Ors.,...

When Statutory Criteria U/S 7 Of IBC Is Satisfied, Tribunal Must Admit CIRP: NCLT, Mumbai

The National Company Law Tribunal (NCLT), Mumbai bench, comprising Justice V. G. Bisht (Retd.) (Judicial Member) and Sh. Prabhat Kumar (Technical Member) has held that the petition for initiation of Corporate Insolvency Resolution Process (CIRP) was admissible as the statutory criteria under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC), viz. the existence of financial debt, default were satisfied. The Tribunal reiterated that the existence of an arbitral award in favour...

Property Of Personal Guarantors Cannot Be Sold Under SARFAESI Act During Moratorium Period U/S 96 Of IBC: NCLT Mumbai

The NCLT Mumbai bench of Mr. Charanjeet Singh Gulati (Member Technical) and Justice Lakshmi Gurung (Member Judicial) has held that once a petition under section 95 of the IBC is filed, the interim moratorium under section 96 is triggered. During subsistence of the moratorium, property of the personal guarantors cannot be sold by the financial creditor under the SARFAESI Act even if sale auction notice was issued before commencement of the moratorium. Brief Facts This application has...

If Genuine Pre-Existing Dispute With Regard To Operational Debt Is Established, Petition U/S 9 Of IBC Must Be Rejected: NCLAT

The NCLAT New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) affirmed that a petition under section 9 of the IBC can be rejected if the dispute raised by the corporate debtor with respect to the debt is genuine and not a moonshine or a bluster just to avoid the liability. Brief Facts This appeal has been filed by the Appellant- Law & Kenneth Saatchi & Saatchi Private Limited (hereinafter called the 'Operational Creditor'...

Asset Deposited By Corporate Debtor As Security Before CIRP Commencement Continues To Be Asset Of Corporate Debtor: Bombay High Court

The Bombay High Court bench of Justices B.P. Colabawalla and Somasekhar Sundaresan has held that monies or any other asset deposited by a corporate debtor in court prior to commencement of CIRP by way of security would continue to be the asset of the corporate debtor.Brief Facts:The Appellant (Corporate Debtor) was directed to pay Rs. 12 lakh as damages along with interest at the rate of 24% p.a to the Respondent in a judgment dated 13.06.2016. In an appeal challenging the said judgment, an...

Development Rights Constitute Property U/S 3(27) Of IBC, Can Be Included In Information Memorandum By RP U/S 29 Of Code: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) affirmed that development rights are property within the meaning of section 3(27) of the IBC which can be included in the Information Memorandum by Resolution Professional under section 29 of the IBC. The Tribunal further observed that the Adjudicating Authority has jurisdiction to enter into as to whether property included in the IM is asset of the corporate debtor under section 60 of the...

Interest On Operational Debt Cannot Be Claimed If There Is No Clause In Agreement For Payment Of Interest: NCLAT

The NLCAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that no interest on principal amount can be claimed if there is no clause to this effect in the agreement executed between the parties. In this case, operational creditor while claiming its operational due also demanded payment of interest since it was an MSME and as per section 16 of the MSME Act, it was entitled to claim interest on the delayed payment. However, the RP rejected this demand...