Arbitration Clause Does Not Bar Operational Creditors From Filing Section 9 Applications Under IBC: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of K. R. Saji Kumar (Judicial Member) and Sanjiv Dutt (Technical Member) has held that an arbitration clause in an agreement does not prevent an operational creditor from filing an application under Section 9 of the Insolvency and Bankruptcy Code (IBC). The bench held that the presence of such a clause does not impose any restriction on the Operational Creditor's right to pursue a Section 9 Application. Brief Facts: The...

Resolution Professional Must Confirm Proper Service Of Demand Notice Before Admitting It To Adjudicating Authority: NCLT Amravati

The National Company Law Tribunal (NCLT), Armravati Special Bench of Dr Venkata Ramakrishna Badarinath Nandula (Judicial Member) held that proof of due service of the demand notice presented to the corporate debtor or its guarantor must first be verified by the resolution professional. The creditor cannot present the same directly to the adjudicating authority/tribunal. Brief Facts: The State Bank of India (“SBI”) lend money to Seven Hills Healthcare Pvt. Ltd. (“Seven Hills/Corporate...

No Liability On Successful Resolution Applicant Post Plan Approval If Not Identified In Corporate Debtor's Financial Records: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Prabhat Kumar (Technical Member) and Justice Virendrasingh Bisht (Judicial Member) has held that no liability can be imposed on the Successful Resolution Applicant after the approval of the plan by the Committee of Creditors if such liability is not identifiable from the financial records of the Corporate Debtor. Brief Facts: The Central Board of Trustees, EPFO (Employees Provident Fund Organisation), Applicant, requested that the...

Claims Submitted After Resolution Plan Approval Including Related Moratorium Period Not Allowed Under IBC: NCLT Bengaluru

The National Company Law Tribunal Bengaluru bench of K. Biswal (Judicial Member) and Manoj Kumar Dubey (Technical Member) has held that claims submitted after the approval of the Resolution Plan, including those related to the moratorium period, are not allowed under the Insolvency and Bankruptcy Code (IBC). The bench held that permitting such belated claims at a later stage would interfere with the Corporate Insolvency Resolution Process. Brief Facts: The matter pertained...

Discrepancy In Addresses Used For Serving Demand Notice, NCLT Amravati Dismisses SBI's Petition For Initiating IRP Process Against Personal Guarantor

The National Company Law Tribunal, Amaravati special bench of Dr Venkata Ramakrishna Badarinath Nandula (Judicial Member) dismissed a petition filed by the State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016. Discrepancies were found in the addresses used for the demand notice served to the personal guarantor and it was held that SBI failed to send the notice to the correct address as per the guarantee agreement. Brief Facts: Dr Renuka Rani Mahanti...

Weekly Digest Of IBC Cases: 22nd July 2024 To 28th July 2024

Supreme Court IBC | CIRP Of Holding Company Cannot Include Subsidiary's Assets: Supreme Court Case no. – Civil Appeal No. 4565 of 2021 Case Title – BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr. The Supreme Court on Monday (July 23) held that a holding company is not the owner of its subsidiary's assets and thus, subsidiary assets cannot be included in the holding company's resolution plan. A bench of Justice Abhay Oka and Justice Pankaj...

Directing Corporate Debtor To Civil Courts Or Arbitration For Admitted Dues Undermines IBC Objectives: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Kuldip Kumar Kareer (Judicial Member) and Anil Raj Chellan (Technical Member) had held that directing Corporate Debtor to seek resolution through civil courts or arbitration for even admitted dues would undermine the objectives of the Insolvency and Bankruptcy Code. Brief Facts: NTPC Limited (Respondent) issued two work orders to Petron Engineering Construction Limited (Corporate Debtor) for the supply of electrical equipment and ...

Stakeholders Can't Impose Penalties, Claim Dues From Corporate Debtor After Approval Of Resolution Plan: Delhi High Court

The Delhi High Court single bench of Justice Sanjeev Narula held once a resolution plan is accepted, the stakeholders cannot impose penalties or claim dues from the Corporate Debtor based on past liabilities. Brief Facts: OCL Iron and Steel Limited (“Petitioner”), established in 2006 as a 'coal-based direct reduced iron production' unit in Orissa, executed a Coal Mine Development and Production Agreement with the Ministry of Coal (“Ministry”) on 2nd March 2015 for the allocation and...

NCLT Orders Liquidation Of Future Retail

The National Company Law Tribunal (NCLT) Mumbai bench ordered the liquidation of Future Retail Limited (FRL) marking the end of the company's long-standing presence in India's retail market. The decision was made by a bench comprising Judicial Member Kuldip Kumar Kareer and Technical Member Anil Raj Chellan who held that the corporate insolvency resolution process (CIRP) exceeded its maximum permissible period without any resolution plan being approved by the Committee of Creditors...

No Provision In IBC To Send Resolution Plan Back To CoC For Reconsideration: NCLT New Delhi

The National Company Law Tribunal New Delhi bench of Mahendra Khandelwal (Judicial Member) and Rahul Bhatnagar (Technical Member) has held that there is no provision in IBC allowing the Adjudicating Authority to send the resolution plan back to the Committee of Creditors (CoC) for reconsideration at the CoC's request. Further, the bench held that once a resolution plan is submitted to the Adjudicating Authority, its jurisdiction is very limited concerning the approval or ...

Computation Of Limitation Must Be From Date Of E-Filing Of Appeal: NCLAT Principle Bench

The National Company Law Appellate Tribunal, Principal Bench, New Delhi of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) has held that the computation of limitation for NCLAT purposes must be from the date of e-filing the appeal. Brief Facts: The matter pertained to an appeal filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) where Innovators Cleantech Pvt. Ltd. (Appellant) sought the initiation of the Corporate Insolvency...

Section 10 Shouldn't Be Exploited And Abused By Corporate Debtor, Application After SARFAESI Proceedings Invalid: NCLAT Principle Bench

The National Company Law Appellate Tribunal Principal Bench New Delhi of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) held that the protective provisions of Section 10 of the IBC should not be exploited or abused by the Corporate Debtor to gain an unfair advantage. The bench noted that the SARFAESI proceedings initiated by the bank begun well before the filing of the Section 10 application by the Corporate Debtor. Thus, it noted that the application under...