Co-Borrower Shares Similar And Equal Responsibility Under Loan Agreement: 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) in an important judgment observed that initiation of Corporate Insolvency Resolution Process (CIRP) against a co-borrower is allowed under the Insolvency and Bankruptcy Code (IBC). In the present case, an appeal was filed by a suspended director of Narang Developers Pvt. Ltd. (NDPL)...

Ruchi Soya (Patanjali) – Claim Not Included In Approved Resolution Plan Stand Extinguished : Karnataka High Court

The Karnataka High Court division bench comprising Mr. Justice S.G. Pandit and Mr. Justice C.M. Poonacha has held that once a resolution plan is approved by the Adjudicating Authority under Section 31(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), claims which are not included in the resolution plan are extinguished, and no further proceedings can be initiated against the corporate debtor in respect of such claims. The Court also clarified that Rule 22 of the Customs, Excise and...

Petition Under Section 95 Not Maintainable Against Partnership Firms: NCLT Hyderabad

The National Company Law Tribunal (NCLT) Hyderabad in an important judgment clarified that partnership firms do not fall under section 95 of the Insolvency and Bankruptcy Code (IBC). The tribunal dismissed a petition filed by Union Bank of India (Financial Creditor) under section 95 of the IBC against KMR Enterprises (Respondent). Brief Facts The case emerged from a petition filed by the financial creditor under section 95 of the IBC against the respondent, a partnership firm. The ...

Himachal Pradesh High Court Affirms Clean Slate Theory, Declares Tax Authorities' Charge Over Properties After Acquisition Plan Void And Illegal

In an important judgment delivered by the Himachal Pradesh High Court, the claims and red entries of the state tax department over the properties of Su-Kam Power Systems Ltd.(Corporate Debtor) were quashed. The corporate debtor was sold as a going concern under the provisions of the Insolvency and Bankruptcy Code (IBC). The court held that once the company was acquired and resolution plan was approved, all prior claims including claims of the tax authorities are extinguished. Brief...

Adjudicating Authority Decides Fairness And Reasonableness While Approving Resolution Plan, High Court Cannot- Delhi High Court

In a significant judgement, the Delhi High Court affirmed the commercial wisdom of the committee of creditors (CoC). The case was pertaining to rejection of the resolution plan proposed by the petitioner despite offering the highest bid in e-auction in a Corporate Insolvency resolution Plan (CIRP) of Helio Photo Voltaic Pvt. Ltd. (Corporate Debtor). Brief Facts It was claimed by the petitioner who was one of the Resolution Applicants (RA) that it was the highest bidder in the...

Negotiable Instruments Proceeding Under Section 138 Does Not Abate On Initiation Of Insolvency Proceeding: Himachal Pradesh High Court

In a significant judgement delivered by the Himachal Pradesh High Court, the personal liability of the accused under the Negotiable Instruments Act was upheld in spite of the insolvency proceedings initiated under the Insolvency and Bankruptcy Code (IBC). Brief Facts Tushar Sharma (accused) and his wife Smt. Shaveta Sharma applied for a house loan to the tune of Rs. 2 crores which was approved and granted on January 24, 2015. The loan amount was secured by mortgaging a property with...

NCLAT: Resolution Professional Can Only Entertain Claims Due As Of CIRP Commencement Date

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) has held that any claims arising after the commencement of the Corporate Insolvency Resolution Process (CIRP) cannot be entertained by the Resolution Professional (RP). Background Facts: The Appellant, Gujarat Urja Vikas Nigam Limited, a wholly owned Government of ...

NCLAT Dismisses Samrat Restaurant's CIRP Plea: Section 10A Bars Insolvency For COVID-19 Era Defaults

The National Company Law Appellate Tribunal (NCLAT), New Delhi dismissed the insolvency application filed under section 9 of the Insolvency and Bankruptcy Code (IBC) by Samrat Restaurant (Operational Creditor) against Brewcrafts Microbrewing Pvt. Ltd. (Corporate Debtor). The application was dismissed on the ground that a substantial portion of the debt arose during the period of section 10A.Brief FactsThe operational creditor entered into a Leave and Policy (L&L) agreement with corporate...

Free Copy Of NCLT Order & Copy Of Order Obtained On Paying Cost Are 'Certified Copies' For Filing NCLAT Appeal : Supreme Court

The 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 Justice Manoj Misra held that there was no difference between a free certified copy of the order and a certified copy which is obtained after paying cost under Rule 50 of the National Company Law Tribunal Rules 2016. "Both the...

NCLAT: Delay In Filing Appeal Cannot Be Condoned If Certified Copy Is Not Applied Within The Limitation Period

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench, comprising Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has reiterated that failure to apply for a certified copy of the impugned order within the prescribed limitation period renders the appeal time-barred.Background Facts:The appellant filed an appeal challenging the impugned order dated 05.01.2024 with a delay of 191 days. The appellant had applied for a free certified copy of the...

NCLAT: Continuation Of Electricity Supply Subject To No Default On Current Dues Under Section 14(1) Of IBC

The National Company Law Appellate Tribunal (NCLAT), Delhi bench comprising Justice Ashok Bhushan, Chairperson, Barun Mitra (Technical Member) and Arun Baroka, Technical Member has directed the Resolution Professional to pay outstanding electricity dues incurred by the Corporate Debtor during the moratorium period. The Tribunal observed that the protection under Section 14(1) of the Insolvency and Bankruptcy Code (IBC) is subject to no defaults in payment of current dues as provided under the...

Deadlocks In Equal Shareholding Should Be Resolved By Buyout Of Shares: NCLT Mumbai

The National Company Law Appellate Tribunal (NCLT), Mumbai bench, comprising Mr. Kishore Vemulapalli Hon'ble Member (Judicial Member) and Ms. Anu Jagmohan Singh (Technical Member) has held that in cases of equal shareholding and director representation among shareholders, where a deadlock arises in the day-to-day management of the company, the deadlock should be resolved by one group purchasing the shares of the other.Background:The Petitioners filed the Company Petition, challenging illegal...