Once Company Board Finds That Proposed Scheme Is Not Against Public Policy, NCLT Can't Sit In Appeal: NCLAT

The National Company Law Appellate Tribunal, Principal Bench of Justice Yogesh Khanna and Ajai Das Mehrotra held that if the Company Court finds no violation of any law and the proposed scheme is not objectionable or against public policy, then the NCLT lacks jurisdiction to question the commercial judgment of those who approved it. Brief Facts: The matter pertained to a scheme filed before the National Company Law Tribunal (NCLT), which sought to demerge the Demerged Undertaking...

NCLT Mumbai Admits Personal Insolvency Application Against Videocon's Promoter Rajkumar Dhoot

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice V.G. Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member) has admitted personal insolvency application against Mr. Rajkumar Nandlal Dhoot, Promoter and Co-owner, of Videocon Industries Limited ('VIL'). The application was filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 ('IBC') by the State Bank of India ('SBI') to initiate an insolvency process against Mr. Rajkumar Dhoot to recover Rs....

IBBI Issues Guidelines For Appointment Of Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) issued guidelines for the process for appointing insolvency professionals (IPs) to roles such as interim resolution professionals (IRPs), liquidators, and bankruptcy trustees. Key among the provisions is the establishment of a panel of IPs, slated to be operational from July 1, 2024, through December 31, 2024. This panel, which will be shared with both the National Company Law Tribunal (NCLT) and the Debt Recovery Tribunal (DRT),...

NCLT Allahabad Bench Initiates Insolvency Proceedings Against Jaiprakash Associates Limited, Accepts ICICI Bank's Petition

The Allahabad bench of the National Company Law Tribunal (NCLT) has directed the initiation of insolvency proceedings against Jaiprakash Associates Limited (JAL), a prominent firm within the Jaypee Group. This decision follows insolvency petitions filed by ICICI Bank in 2018 and State Bank of India (SBI) in 2022, aiming to recover debts amounting to several thousand crores. Brief Background Jaiprakash Associates Limited is primarily engaged in construction, cement, and ...

Financial Creditor Can Initiate Simultaneous Or Independent Proceedings Against Principle Borrower And Personal Guarantor: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench-VI bench of K. R. Saji Kumar(Judicial Member) and Sanjiv Dutt (Technical Member) has held that the principal debtor and the surety are jointly and severally liable to the creditor which has the right to recover its dues from either or both of them simultaneously. The bench noted that there is no embargo under the Insolvency and Bankruptcy Code on the financial creditor initiating simultaneous or independent proceedings against the...

NCLAT Delhi: Claims Of Tax Assessment Orders Passed During Moratorium Under IBC Can Be Considered As Unsecured Operational Debt

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member), and Mr. Indevar Pandey (Technical Member) held that the claims of Tax Assessment Orders passed during the moratorium under Sections 14 & 33(5) of Insolvency and Bankruptcy Code, 2016 ('IBC') can be considered as Unsecured Operational Debt. Background Facts: On 23.07.2017, Anil Ltd. (Corporate Debtor) entered the Corporate...

NCLAT Delhi: Proceedings U/S 66 Of IBC For Fraudulent Or Wrongful Trading Can Be Initiated Against Third Parties

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) held that proceedings under Section 66 of Insolvency and Bankruptcy Code, 2016 (“IBC”) for fraudulent or wrongful trading can be initiated against third parties. Background Facts: Royal Refineries Pvt. Ltd. (Corporate Debtor) was involved in trading bullion, importing and exporting gold after manufacturing activities and...

No Irreversible Actions In Winding Up, Company Court Can Transfer Proceedings To NCLT: Bombay High Court

The Bombay High Court bench of Justice Abhay Ahuja held that as long as no irreversible actions, such as actual sales of immovable or movable properties, have occurred, the Company Court retains the discretion to transfer proceedings to the NCLT. The bench held that it is only where the winding up proceedings have reached the stage where it would be irreversible, making it impossible to set the clock back, that the Company Court must proceed with the winding up instead of transferring ...

Once Resolution Plan Is Approved By NCLT, Corporate Entity Starts With Clean Slate : Calcutta High Court

The Calcutta High Court bench of Justice Sugato Majumdar held that after the insolvency proceeding is over and the resolution plan is duly approved by the National Company Law Tribunal, the corporate entity starts with a clean slate on rejuvenation. Brief Facts: Defendant No. 1 merged with Defendant No. 5 in 2008, according to an Order by Court. Consequently, Defendant No. 1 ceased to exist, and subsequently, Defendant No. 5's operations were halted for over fourteen years. This led...

Mere Initiation Of Proceedings Under IBC Doesn't Bar Liability Of Signatory Of Cheque Under Negotiable Instruments Act: Madhya Pradesh High Court

The Madhya Pradesh High Court bench of Justice Gurpal Singh Ahluwalia has held that merely because of the initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 the signatory of the cheque cannot escape from his liability under the Negotiable Instruments Act, 1881. Brief Facts: The Applicant approached the Madhya Pradesh High Court (“High Court”) and filed an application under Section 482 of Cr.P.C. seeking relief of the examination of records in a case pending...

Monthly Digest Of IBC Cases: May 2024

SUPREME COURT Can Homebuyer's Claim For Apartment Be Rejected For Not Filing Claim During Insolvency Process Against Builder? Supreme Court To Decide Case Title: Ayush Agarwal vs Jaypee Infratech Ltd. & Ors. Citation: Civil Appeal No. 5185/2024 The Supreme Court of India is set to determine whether the non-filing of a claim during the insolvency resolution process of a builder can result in the rejection of a homebuyer's claim for allotment of apartment. The case...

Official Liquidator Must Adhere To Ethical Principles And Fairness To Discharge Their Duties Under IBC: Delhi High Court

The Delhi High Court bench of Justice Subramonium Prasad held that official liquidators must adhere to ethical principles and demonstrate an unwavering commitment to fairness to discharge their duties under the Insolvency and Bankruptcy Code. The bench held that: “the role of the liquidator in insolvency proceedings is paramount to the entire process. The liquidation proceedings revolve around the official liquidator and he has to discharge his functions keeping in mind the benefit...