NCLAT Permits Participation Of Erstwhile Promoter In CIRP Despite CoC's Disqualification, Cites Relaxation U/S 29A Of IBC

The National Company Law Appellate Tribunal (NCLAT) presided by Justice Sharad Kumar Sharma, Member (Judicial) and Jatindranath Swain Member (Technical) dismissed an appeal filed by the Meir Commodities Pvt ltd, challenging the participation of promoter of NCS Sugar ltd in the Corporate Insolvency Resolution Process (CIRP). Background of the Case A section 7 application was filed by the Punjab National Bank and on the basis of this on 24th July, 2022, Corporate Insolvency...

Bombay High Court Upholds Suspension Of Resolution Professional For Deficiency In Discharge Of Duties

The Bombay High Court bench of Justices A.S. Chandurkar and Rajesh S. Patil has upheld that the suspension order passed by the Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) against the Resolution Professional (RP) for lack of due diligence in verifying the Resolution Plan and non-intimation of the claims of an operational creditor. Facts: The Petitioner, Vijendra Kumar Jain was appointed as the RP of M/s Transparent Energy System Pvt. Ltd. (Corporate...

Right To Replace Resolution Professional Not Provided To Operational Creditor, Only CoC Can Replace RP: NCLT Chennai

The National Company Law Tribunal (NCLT), Chennai Bench, comprising Ravichandran Ramasamy, Jyoti Kumar Tripthi, Member Technical Member (Judicial) ,held that on reading of section 27 of the Insolvency and Bankruptcy Code (IBC), it is clear that the right of replacement of RP is not provided to the operational creditor and necessary party required for adjudication will be heard in lines of Principle of Natural justice. Brief Facts and Contentions Giriraj Enterprises (operational ...

Resolution Professional At S.94/95 Stage Cannot Decide On Maintainability Of Petition By Entering Into Merits: Karnataka High Court

The Karnataka High Court Bench of Justice N.V. Anjaria and K.V. Aravind, held that the role of the Registrar while registering the application under Section 95 of the Insolvency and Bankruptcy Code (IBC) is not adjudicatory in nature and this duty of the Registrar, NCLT was in no way adjudicatory trapping. Application of judicial mind towards merits has no place in discharge of a ministerial or clerical function. Brief Facts A petition under section 95 of the IBC was...

Non-Obtaining Of NOC From Applicant Does Not Ipso Facto Invalidate Security Documents Executed In Favour Of Respondents: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Anil Raj Chellan Kuldip Kumar Kareer (Member Technical) (Member Judicial), held that non-obtaining of NOC from the Applicant does not ipso facto invalidate the security documents executed in favour of Respondents. Brief Facts An application under section 60(5) of the Insolvency and Bankruptcy Code (IBC) was filed by Bank of Baroda (applicant) in which the CIRP conducted by the resolution professional (respondent no 1)) was...

After Lapse Of Extended Period Of 90 Days Of Insolvency Commencement Date, RP Not Obliged To Accept Any Claim: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member), held that after the lapse of extended period of 90 days of the insolvency commencement date, the RP is not obliged to accept any claim. The tribunal further held that the provisions of Income Tax Act do not create any charge or security interest in favour of the Appellant or provides any foundational basis for the...

Assets Of Partnership Firm Not Property Of Personal Guarantor, Not Covered By Interim Moratorium Merely Because S.95 Application Was Filed: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member), held that the assets held in the name of the partnership firm is not the personal property of the personal guarantor and cannot be subjected to the provisions of interim moratorium merely because a Section 95 application has been filed against a partner of the firm in respect of a...

Unilateral Entries In Financial Records By Corporate Debtor To Make Counter Claim Cannot Be Considered: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member) and Shri Ajai Das Mehrotra (Technical Member), held that unilateral entries made in the financial records by the corporate debtor to make a counter claim cannot be considered. In this case, an appeal was filed against a decision of the NCLT in which a petition under section 7 of the Insolvency and Bankruptcy Code (IBC) was dismissed. Brief Facts ...

Authorised Officer Of Financial Creditor Can Also File Petition U/S 7 Of IBC: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, Court V, comprising Ms. Reeta Kohli, Hon'ble Member (Judicial) Ms. Madhu Sinha, Hon'ble Member (Technical), held that general authorization given to an officer of the Financial Creditor by means of a power of attorney, would not disentitle such officer to act as the authorized representative of the Financial Creditor while filing an application under Section 7 of the Insolvency and Bankruptcy Code (IBC). In this case, a petition under...

Order U/S 45A Of ESI Act Cannot Be Passed During Moratorium Period U/S 14 Of IBC: NCLT Allahabad

The National Company Law Tribunal, Allahabad Bench, comprising Shri Praveen Kumar Gupta (Judicial Member) and Shri Ashish Kumar Verma (Technical Member), held that proceedings under ESI Act cannot be initiated after admission of the corporate debtor into insolvency. In this case, an order passed by ESI authority was challenged by Resolution Professional (RP) in which the authority claimed unpaid contribution towards state insurance. Brief Facts Harig Chankshaft Ltd. (corporate ...

Application U/S 65 Of IBC Can Be Considered Even Before Admission Of Insolvency Petition: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member), held that an application under section 65 of the Insolvency and Bankruptcy Code (IBC) can be considered even before formal admission of the Corporate Insolvency Resolution Process (CIRP) petitions. Brief Facts This appeal is directed against two orders passed by...

Look-Back Period Can't Be Extended Beyond 2-Yr Limit U/S 43(4) Of IBC For Related-Party Transactions: NCLAT

The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that section 43 of the Insolvency and Bankruptcy Code (IBC) does not allow the extension of the look-back period beyond 2 years for related-party transactions. Brief Facts:M/s Sysco Industries Ltd. (Corporate Debtor) had supplied certain goods to M/s Pratap Associates, a HUF firm of the erstwhile shareholder and...