NCLT Mumbai Bench Rejects Claim Of Insufficiency Of Stamp Duty, Proceedings Under IBC Not To Enforce Guarantee

The National Company Law Tribunal Mumbai bench of Justice V. G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has rejected contention regarding the insufficiency of stamp duty on the guarantee agreement. The bench held that the proceedings under the Insolvency and Bankruptcy Code (IBC) are intended to address insolvency issues rather than to enforce the guarantee itself. Brief Facts: The matter pertained to a petition filed under Section 95 of the...

IBC Provisions Prevail Over Kolkata Municipal Corporation Act: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Anu Jagmohan Singh (Technical Member) and Kishore Vemulapalli (Judicial Member) has held that the provisions of the Kolkata Municipal Corporation Act do not take precedence over those of the IBC. The bench held that claims by the KMC, being in the nature of crown debt, should be classified as government dues and accordingly placed within the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016. ...

Judge Recusals On Frivolous Grounds Enable Litigant Manipulation And Bench Selection: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Justice (Retd.) Sh. Virendrasingh Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has held that judges recusing themselves based on frivolous and baseless allegations would enable litigants to manipulate proceedings to select their preferred benches. The bench held that recusal cannot be dictated by litigants; it is solely at the judge's discretion. This practice, if allowed, would effectively permit litigants to ...

Insufficiently Stamped Agreement Between Parties , Not A Ground To Dismiss CIRP Applications :NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Prabhat Kumar (Technical Member) and Justice V.G Bisht (Judicial Member) has held that deficiencies in document stamping, as per the Stamp Act, cannot be used as a reason to dismiss an application under Section 7 of the Insolvency and Bankruptcy Code. Brief Facts: Q West Infrastructure Private Limited (Applicant/ Financial Creditor), a non-banking finance company, filed a Company Petition seeking to initiate the Corporate ...

Exchange Of Debit Notes And Pending MSME Reference Indicate Plausible Pre-Existing Dispute: NCLT New Delhi

The National Company Law Tribunal, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has held that the exchange of debit notes and the pending MSME reference indicate a plausible pre-existing dispute. Therefore, the bench held that if the Corporate Debtor raises a plausible contention about a pre-existing dispute, which is not just a moonshine or feeble legal argument, it would suffice for the Adjudicating Authority to reject the...

Liquidation Is Last Resort, Broader Public Interest In Resolving Corporate Insolvency Should Be Taken Into Account: NCLT Kolkata

The National Company Law Tribunal Kolkata bench of Bidisha Banerjee (Judicial Member) and Balraj Joshi (Technical Member) has held that the liquidation of a corporate debtor should be a measure of last resort. It held that the Insolvency and Bankruptcy Code (IBC) acknowledges a broader public interest in resolving corporate insolvencies with its primary objective extending beyond the mere recovery of outstanding debts. The bench held that the corporate debtor lacks substantial...

Interest Not Mentioned In Invoices Or Civil Court Decree, Can't Add To Reach Threshold Limit: NCLT

The National Company Law Tribunal New Delhi bench of Bachu Venkat Balaram Das (Judicial Member) and Atul Chaturvedi (Technical Member) has held that claim for interest is not arising out of supplies of goods or services and do not form part of the Operational Debt in terms of Section 5(21) of the Insolvency and Bankruptcy Code, 2016. Therefore, the bench held that the interest awarded by the civil court could not be combined with the principal amount to meet the threshold limit of Rs....

NCLT Kolkata Imposes ₹1 Lakh Penalty On Indian Bank For Misguided Insolvency Petition Against Personal Guarantor Already Undergoing Insolvency Proceedings

The National Company Law Tribunal Kolkata bench of Bidisha Banerjee (Judicial Member) and D. Arvind (Technical Member) has imposed a ₹1 lakh penalty on Indian Bank for filing insolvency proceedings against a Personal Guarantor who was already undergoing insolvency proceedings initiated by the same bank. Brief Facts: The Indian Bank (Financial Creditor) initiated insolvency proceedings against Mr. Manish Kumar, the Personal Guarantor for M/s. Aryavrat Trading Pvt. Ltd. (the ...

Third Parties And Multiple Representations Excluded From Hearing In Section 7 Or 9 IBC Petitions: NCLT Kochi

The National Company Law Tribunal Kochi bench of Ravichandran Ramasamy (Technical Member) and T Krishna Valli (Judicial Member) has held that at the admission stage of a petition under Section 7 or 9 of IBC, only the Corporate Debtor and the Financial Creditor are considered necessary parties for hearing. Third parties, including intervenors, do not have the right to be heard at this stage.The bench held that any allegations of fraud, deceit, or fraudulent and malicious initiation of the...

MOU And Loan Agreement For Land Acquisition As Investment, Not Financial Debt Under IBC: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Justice V.G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has held that the Memorandum of Understanding (MOU) and Loan Agreement intended for the acquisition and development of land constitute an investment rather than financial debt under the Insolvency and Bankruptcy Code (IBC). Brief Facts: RT Advisory Services LLP. (Petitioner/ Financial Creditor) claimed an outstanding amount of Rs. 5,19,97,608.21/-. On May 5,...

Damages Under Section 14B Of EPF Act Are Government Dues, Subject To Section 53 Of IBC, Not Section 36(4)(a)(iii): NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Lakshmi Gurung (Judicial Member) and Charanjeet Singh Gulati (Technical Member) has held that damages under Section 14B of the EPF Act are classified as government dues. Consequently, these damages must be paid according to Section 53 of the Insolvency and Bankruptcy Code, 2016 and are not covered under Section 36(4)(a)(iii) of the IBC. Section 14B of the EPF Act allows the authorities to levy damages on employers who fail to pay their ...

Interest Not Essential For Debt To Qualify As Financial Debt Under IBC: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Anil Raj Chellan (Technical Member) and Kuldip Kumar Kareer (Judicial Member) has held that the inclusion of interest is not essential for a debt to qualify as financial debt. The bench held that the definition of financial debt under Section 5(8) of the Insolvency and Bankruptcy Code, 2016, does not explicitly exclude interest-free loans. Brief Facts: Spenta Enclave Private Limited, through its Resolution Professional Mr....