IBC Shall Prevail Over TRAI Act, Any Penalty Imposed By TRAI To Be Recovered As Per Scheme Of IBC: NCLAT

The NCLAT New Delhi Bench of Justices Ashok Bhushan (Chairperson), Barun Mitra and Arun Baroka held that the IBC being a special statute and having a non-obstante clause under section 238 of the IBC shall prevail over the TRAI Act therefore any penalty imposed by the TRAI on the corporate debtor would be recovered as per the scheme of the IBC. No special treatment can be given to the TRAI over other creditors of the corporate debtor. Brief Facts The Appellant is a regulator...

Supreme Court Orders Liquidation Of Jet Airways On Failure Of Resolution Plan

The Supreme Court invoked its extraordinary powers under Article 142 of the Constitution to order the liquidation of Jet Airways in view of the "peculiar and alarming" circumstance that the resolution plan has not been implemented for five years.The Court set aside the NCLAT Order which allowed the cash-strapped Jet Airways' ownership transfer to the Successful Resolution Applicant (SRA) without complete payment in accordance with the resolution plan. The Court directed the NCLT Mumbai...

Approved Resolution Plan Can Be Amended To Ensure Statutory Compliance U/S 31 Of IBC: NCLT Kolkata

The NCLT Kolkata Bench of Justices D. Arvind and Bidisha Banerjee held that the approved resolution plan can be amended to ensure that it complies with the statutory provisions under section 31(e) of the IBC. In this case, an application seeking amendment to the approved resolution plan was filed by the SRA to increase the public shareholdings to 5% as mandated by Rule 19(5) of the SCRA Rules. The public shareholdings stood at 2.28% after the approval of the plan. Brief Facts On ...

Recall Notice Issued During Cut-Off Period U/S 10A Of IBC Doesn't Alter Date Of Default If Default Occurred Before Cut-Off Period: NCLAT

The National Company Law Appellate Tribunal (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 the issuance of a recall notice during the cut off period specified under Section 10A (i.e. from 25.03.2020 to 25.03.2021) does not defer the date of default if the default occurred before 25.03.2020. The Tribunal noted that the recall notice issued during the cut off period was a...

Settlement Plan U/S 12A Of IBC Cannot Be Considered By CoC After Approval Of Resolution Plan: NCLAT

The NCLAT New Delhi Bench of Justices Ashok Bhushan and Barun Mitra affirmed that a settlement proposal under Section 12A of the IBC cannot be put before the CoC after the CoC has approved the resolution plan. The tribunal further observed that with the approval of the resolution plan by the CoC, the plan becomes inter se binding between the CoC and the SRA and hence no settlement proposal of the suspended management can be considered thereafter. Brief Facts The present appeal filed...

'IBC Prevails Over SEZ Act', Supreme Court Rejects Noida SEZ's Claim

The Supreme Court dismissed the Noida Special Economic Zone's (NSEZ) plea challenging the NCLAT's decision to approve a resolution plan that granted Rs. 50 Lacs against NSEZ's admitted claim of about Rs. 6 Crore.The NCLAT reduced the claim amount, partly due to penalties related to the renewal of the sub-lease and transfer charges.The bench comprising Justices Abhay S. Oka and Augustine George Masih ruled that the Insolvency and Bankruptcy Code (IBC) prevails over the SEZ Act due to Section 238...

IBC Quarterly Digest: July To September 2024

Supreme CourtFree Copy Of NCLT Order & Copy Of Order Obtained On Paying Cost Are 'Certified Copies' For Filing NCLAT Appeal : Supreme CourtCase Title: State Bank of India v. India Power Corporation Ltd Citation: 2024 LiveLaw (SC) 766The Supreme Court today (September 27) set aside an order of the National Company Law Appellate Tribunal (NCLAT) which refused to condone delay in filling an appeal because of the filling of a 'free copy' of the impugned order. The bench of CJI DY Chandrachud and...

Exploring The Priority Of Consideration For Insolvency Applications U/S 7 Of IBC Over Arbitration Applications U/S 8 Of Arbitration Act

In a recent decision titled Century Aluminium Company Limited v. Religare Finvest Limited (2024), the NCLAT grappled with an important question whether, when an insolvency petition under section 7 of the IBC is filed and yet to be admitted, subsequent filing of an arbitration application under section 8 of the Arbitration Act would be maintainable or not. The tribunal observed that when the insolvency petition is filed and admitted or yet to be admitted, pendency or subsequent filing of...

CoC Entitled To Liquidate Corporate Debtor If No Approved Resolution Plan Is Placed Before Adjudicating Authority Within Statutory CIRP Period: NCLAT

The NCLAT bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) have observed that the statutory construct of Insolvency and Bankruptcy Code, 2016 (IBC) in terms of Section 33 empowers the Committee of Creditors (CoC) to decide to liquidate the Corporate Debtor any time before the approval of the resolution plan by the Adjudicating Authority. The decision to liquidate is a commercial wisdom of the CoC which is not subject to judicial review except for ensuring...

IBC Cases Weekly Round Up: 21st October To 27th October 2024

NOMINAL INDEXGLAS TRUST COMPANY LLC Vs BYJU RAVEENDRAN | Diary No. - 35406/2024, 2024 LiveLaw (SC) 826VIDYASAGAR PRASAD VERSUS UCO BANK & ANR., 2024 LiveLaw (SC) 825GLAS TRUST COMPANY LLC Vs BYJU RAVEENDRAN | Diary No. - 35406/2024, 2024 LiveLaw (SC) 826Maha Mineral Mining and Benefication Private v. Gram Panchayat, Gowari, 2024:BHC-NAG:11478-DBMajor Atul Dev (Retd.) & Ors. vs. Union of India, Ministry of Corporate Affairs Through Regional Director (North Region) & Ors., Company...

When Both Arbitration And Insolvency Petitions Are Pending, Petition U/S 7 Of IBC Has To Be Decided First: NCLAT

The NCLAT New Delhi Bench of Justices Ashok Bhushan, Barun Mitra and Arun Baroka held that if at the time of filing a petition under section 7 of the IBC, arbitration proceedings are pending, the Adjudicating Authority is obligated to first decide the petition under section 7 and record a satisfaction as to the existence of a debt and default. Pendency of the arbitration proceedings is immaterial.Brief FactsThis Appeal has been filed challenging the Order dated 10.07.2024 passed in I.A. filed by...

Resolution Plan Approved By CoC Cannot Be Withdrawn Unless Section 30(2) Of IBC Is Breached: NCLAT

The NCLAT Bench of Justices Ashok Bhushan, Barun Mitra and Arun Baroka affirmed that the law is well settled that the Resolution Plan which is approved by the CoC cannot be allowed to be withdrawn and any clause which contemplate withdrawal of the plan is unenforceable unless section 30(2) of the IBC is breached. Brief Facts These two Appeals have been filed by the same Appellant challenging two orders passed by the Adjudicating Authority has been filed challenging the order dated...