Uncorroborated Allegations Pertaining To Pre-Existing Dispute Cannot Be Entertained: NCLT Admits Petition U/S 9 Of IBC

The National Company law Tribunal (NCLT) Hyderabad Bench of Justices Rajeev Bhardwaj and Sanjay Puri admitted M/s Nandi Irrigation Systems Limited (Corporate Debtor) into Corporate Insolvency Resolution Process (CIRP) on an application made by M/s Rishabh Triexim LLP (Operational Creditor) under section 9 of the Insolvency and Bankruptcy Code (IBC). This case arises due to the default made by the corporate debtor in paying the operational debt amounting to Rs. 11.32 crores which was to be paid...

Development Rights Are Fully Covered By Definition Of "Property" U/S 3(27) Of IBC: NCLAT New Delhi

The NCLAT New Delhi Bench of Justices Ashok Bhushan (Chairperson) Barun Mitra (Technical Member) held that it is no more res integra, that the Development Rights are Rights which can be claimed by a Developer in assets. Development Rights are also fully covered by the definition of Property under Section 3(27) of the IBC.Brief FactsThese four Appeals arise out of the order passed by the NCLT in the Corporate Insolvency Resolution Process (CIRP) of the 'M/s. Today Homes and Infrastructure Pvt....

NCLAT Dismisses Travel Agents Association Of India's Allegations Of Anti-Competitive Practices Against Union Govt's Dept Of Expenditure

The NCLAT, New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the Department of Expenditure, Government of India does not qualify as an "enterprise" under Section 2(h) of the Competition Act, 2002, being a “consumer” of air ticketing services.The Travel Agents Association of India had levelled allegations of anti-competitive practices against the Department of Expenditure,...

IBC Cases Weekly Round Up: 13th October To 20th October 2024

Nominal IndexCoC of KSK Mahanadi Power Company Ltd. v. Uttar Pradesh Power Corporation Ltd. and Ors., 2024 LiveLaw (SC) 815 Orissa Manganese & Minerals Ltd. v. State of Odisha and Ors., W.P.(C) No. 1497 of 2024 with W.P. (C) No. 2304 of 2024 and W.P.(C) No. 2307 of 2024 Kher Nagar Sukhsadan Co-operative Housing Society Ltd. v. State of Maharashtra & Ors., Writ Petition No. 3893 of 2024 Buoyant Technology Constellations Pvt. Ltd. vs. Manyata Realty & Ors.,WRIT APPEAL NO.498 OF 2024...

Dissenting Financial Creditor Only Entitled To Liquidation Value Of Secured Interest U/S 30(2)(b) Of IBC, Commercial Wisdom Of CoC Sacrosanct: NCLAT

The NCLAT, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member) has affirmed that as per Section 30(2)(b) of the Insolvency and Bankruptcy Code, 2016, a dissenting financial creditor is only entitled to the liquidation value of its secured interest, not the total liquidation value of the Corporate Debtor. The Tribunal reiterated that the 'commercial wisdom' of the Committee of Creditors (CoC) is paramount and cannot be interfered with...

Payment Of Lease Amount, Lease Rent And Premium Cannot Be Considered As CIRP Costs; Not Recoverable U/S 14 Of IBC: NCLAT New Delhi

The NCLAT New Delhi Bench of Justices Rakesh Kumar Jain and Indevar Pandey held that the payment of lease amount, lease rent and premium arising during CIRP cannot be considered as CIRP costs. Therefore, they cannot be claimed in view of section 14 of the IBC which prohibits any recovery of the property of the corporate debtor during the CIRP. Brief Facts M/s Concord Infrastructure Pvt. Ltd. (Operational Creditor) filed an application under Section 9 of the Insolvency and Bankruptcy...

Payment Of Pre-CIRP Dues To Creditors Including Government Dues Cannot Be Made By RP Outside Resolution Framework: NCLAT New Delhi

The NCLAT New Delhi Bench of Justice Ashok Bhushan, Barun Mitra] Member and Arun Baroka held that the assets of the Corporate Debtor are to be taken over by the Resolution Professions for resolution of the Corporate Debtor. The RP has to make every endeavour to protect and preserve the value of the property of the Corporate Debtor. Payment of pre-CIRP dues to creditors Including Government Dues cannot be made by RP outside the resolution framework.Brief FactsThe Ministry of Coal, Government of...

Inherent Powers Under Rule 11 of NCLT Rules Cannot Be Used To Circumvent Procedure To Withdraw CIRP Under S.12A IBC & R. 30A: Supreme Court

The Supreme Court Bench led by CJI DY Chandrachud comprising Justices JB Pardiwala and Manoj Misra held that 'inherent powers' cannot be used to subvert legal provisions, which exhaustively provide for a procedure. To permit the NCLAT to circumvent this detailed procedure by invoking its inherent powers under Rule 11 would run contrary to the carefully crafted procedure for withdrawal. In the Impugned Judgement, the NCLAT does not provide any reasons for deviating from this procedure...

All Claims Prior To Approval Of Resolution Plan Stand Extinguished U/S 31 Of IBC: Bombay High Court

The Bombay High Court Bench of Justices Bharati Dangre and Abhay J Mantri held that once the petitioner has acquired the assets of the corporate debtor, the claims, if any, which were not raised, stand extinguished and the respondent cannot now seek to recover those claims from the petitioner, who acquired the assets of the corporate debtor through auction process under the IBC. Brief Facts The petitioner Company, incorporated under the provisions of the Companies Act, 2013 and...

Written Financial Contract Is Not A Pre-Condition For Proving Existence Of Debt U/S 5(8) Of IBC: NCLAT New Delhi

The NCLAT New Delhi Bench of Justices Ashok Bhushan(chairperson) and Barun Mitra (Technical Member) held that it has been held that written financial contract is not a pre-condition or an exclusive requirement for proving existence of debt. It has been further amplified therein that the Application to Adjudicating Authority Rules, 2016 and CIRP Regulations makes it clear that financial debt can be proven from other relevant documents and it is not mandatory that written financial contract...

Adjudicating Authority Can Recall Its Judgement But Has No Power To Review Unless Expressly Required: NCLAT New Delhi

The NCLAT Delhi comprising of Justice Rakesh Kumar Jain (Member Judicial), Mr. Naresh Salecha (Member Technical) and Mr. Indevar Pandey (Member Technical) dismissed appeal filed by the Aircastle (Ireland) Ltd. (Appellant) who was aggrieved by the order of the Adjudicating authority. The Bench distinguished between Review Petition and Recall Petition and stated that the adjudicating authorities have the inherent powers to recall their orders but have no power to review the same. ...

IBC | No Compulsion To Specify Names Of Creditors In Balance Sheet, General Entry Acknowledging Debt Sufficient To Initiate CIRP : Supreme Court

Observing that there's no compulsion for the companies to specify the names of every secured/unsecured creditor in their balance sheet, the Supreme Court dismissed the plea of a corporate debtor's suspended director against the initiation of Corporate Insolvency Resolution Process (“CIRP”). In other words, the bench comprising Justices PS Narasimha and Sandeep Mehta observed that when debt entries exist in the corporate debtor's balance sheet, the debtor could not deny its liability merely on...