S.10A Of IBC Cannot Be Considered Valid Defence If Financial Creditor Establishes Valid Default Date: NCLAT Principal Bench

The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member Technical) dismissed an appeal filed by a suspended director of the corporate debtor (Point Developers Ltd.) challenging the order passed by the NCLT, Mumbai Bench admitting Section 7 application filed by the financial creditor through IRP.Background of the Case The case involves a financial dispute between the financial creditor (Rushabh Civil...

Lease Rent/Damages Subsequent To Commencement Of CIRP Cannot Be Treated As CIRP Cost: NCLAT

The NCLAT New Delhi Bench of Justices Ashok Bhushan and Barun Mitra held that lease rent/damages due to the corporate debtor after the commencement of the CIRP cannot be considered as CIRP cost that too when an arbitral award with respect to the same amount had already been secured which could not be executed due to moratorium under section 14 of the IBC. Brief Facts This Appeal has been filed challenging the Order dated 09.05.2023 passed by the Learned Adjudicating Authority was...

Once Debt And Default Satisfied, Petition U/S 7 Of IBC Has To Be Admitted, Vidharbha Ruling Cannot Be Applied Mechanically: NCLAT

The NCLAT New Delhi Bench of Justices Mr. Rakesh Kumar Jain, Mr. Naresh Salecha and Mr. Indevar Pandey affirmed that a petition under section 7 of the IBC cannot be rejected merely on the ground that there are chances of the amount being recovered from other proceedings which will satisfy the entire debt of the creditors. The tribunal further observed that the ratio of the Vidharbha ruling cannot be applied mechanically without satisfying itself as to whether the amount equal or more than the...

NCLAT Upholds Approved Resolution Plan For M/S Adico Forge Pvt Ltd Which Secured Workers' Provident Fund And Gratuity Dues In Full

The NCLAT bench of Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has reiterated that the jurisdiction of the NCLT and NCLAT while considering the Plan approved by the CoC is limited. The Tribunal ruled that dues that were previously admitted in the Resolution Plan and paid in full cannot be raised again.Brief Facts:The Corporate Insolvency Resolution Process (CIRP) against M/s Adico Forge Pvt. Ltd. (Corporate Debtor/Respondent No. 4)...

Constitution Of CoC In Violation Of Section 21(2) Proviso Of IBC Is Nullity In Eyes Of Law, Vitiates Entire CIRP: NCLT

The NCLT Bengaluru Bench of Justices Hon'ble Shri K. Biswal and Hon'ble Shri Manoj Kumar Dubey, held that when the constitution of the Committee of Creditors (CoC) violates the Proviso of Section 21(2) of IBC, 2016, such constitution is nullity in the eyes of Law and vitiates the entire CIRP.Brief FactsThe Present Interlocutory Application is filed on 23/11/2023 by Mr. Vipin Kumar Sharma through its Power of Attorney Holder Shri Mukesh Sharma ('Applicant') under subs-section (5) of section 60 of...

Examining The Interplay Between Sections 29A And 240A Of IBC: Clarifying The Status Of MSMEs Within Insolvency Resolution Framework

The NCLAT in a recent decision titled Ashish Singh, Resolution Professional forVibrant Buildwell Pvt. Ltd. v. Raj Kumar Sahani & Ors (Company Appeal (AT) (Insolvency)No. 253-254 of 2024) observed that under section 240A of the IBC, the date of submission of the resolution plan has to be seen to assess whether ineligibility under section 29A of the IBC is triggered. In this case, the tribunal extended the benefit of section 240A of the Insolvency and Bankruptcy Code, 2016 to the corporate...

Limitation Period U/S 61 Commences From Pronouncement Of Order And Not On Uploading Date Of Order: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) Principal Bench, New Delhi, comprising of Justice Rakesh Kumar Jain, Mr. Barun Mitra (Member Technical) and Mr. Naresh Salecha (Member Technical), disposed two applications filed by the appellant seeking condonation of one-day delay in filing their appeal against the order of the National Company Law Tribunal (NCLT).Background of the CaseThe case involves the filing of two appeals against the common order of the tribunal dated 03.07.2024,...

Time-Period U/S 61 Of IBC Cannot Be Extended On Ground Of S.14 Of Limitation Act: NCLAT

The NCLAT Chennai Bench of Justices Justice Sharad Kumar Sharma and Jatindranath Swain held that the provisions contained under Section 14 of the Limitation Act will not be a recourse available to the appellant, owing to the fact that Section 61 of the IBC, since being a self-contained provision dealing with the principles of Limitation prescribes an upper limit within which an Appeal has to be filed and that cannot be extended under any circumstances even by this Appellate Tribunal. ...

Any Claimed/Unclaimed Dues Prior To Approval Date Of Resolution Plan Stand Extinguished: NCLT Kolkata

The National Company Law Tribunal (NCLT), Kolkata bench of Smt. Bidisha Banerjee (Judicial Member) and Shri D. Arvind (Technical Member) have held that the income tax notice, demand notice and payment for past dues that accrued prior to the date of the Resolution Plan against the corporate debtor is null and void. It observed, “It is a well-established law that the corporate debtor was come out of insolvency resolution process by way of successful resolution of its insolvency cannot be...

Dissolution Of Corporate Debtor Can Be Sought U/S 54 Of IBC Only After Complete Liquidation: NCLAT

The NCLAT New Delhi Bench of Justices Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) held that the scheme of the IBC clearly provides that dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. In the present case, the liquidation proceedings have not been undertaken and resorting to Section 54 for dissolution could not have been taken as per the scheme of the IBC. Brief Facts This Appeal by...

Ineligibility Of Successful Resolution Applicant U/S 29A Of IBC Has To Be Seen On Date Of Submission Of Resolution Plan: NCLAT New Delhi

The NCLAT New Delhi Bench of Justices Ashok Bhushan and Barun Mitra held that the eligibility/ineligibility of Successful Resolution Applicant under section 29A of the Insolvency and Bankruptcy Code (IBC) has to be seen on the date of submission of Resolution Plan.Brief FactsOn an Application filed by a Financial Creditor of the Corporate Debtor – Dilwara Leasing and Investment Ltd., Corporate Insolvency Resolution Process (“CIRP”) against the CD commenced by order dated 22.02.2022 passed by...

Banks Have Inherent Power To Classify Account Of Personal Guarantor As NPA During Moratorium Period: NCLT New Delhi

The NCLT, Delhi comprising of Justice Bachu Venkat Balaram Das, Member (Judicial) and Justice Atul Chaturvedi (Technical Member), accepted a Section 95 application filed by the applicant bank to initiate Corporate Insolvency Resolution Process (CIRP) against the Personal Guarantor of M/s CMYK Printech Limited.Background of the Case The Central Bank of India filed an application under Section 95(1) of the IBC Code, 2016 read with rule 7(2) of Insolvency and Bankruptcy (Application to Adjudicating...