Loan Amount Acknowledged As “Long-Term Borrowings” Has Commercial Effect And Covered U/S 5(8) Of IBC: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Ms. Lakshmi Gurung, Member (Judicial) & Sh. Charanjeet Singh Gulati (Technical), while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in the case of Metamorphosis Trading LLP vs Membrane Filters (India) Private Limited has held that the loan amount acknowledged in the books of the Corporate Debtor as “Long-term Borrowings” is a loan having commercial effect of borrowing and...

MSME Interest Cannot Be Claimed To Trigger Threshold Limit Under IBC If MSME Certificate Obtained Post Appointed Date: NCLT Mumbai

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising Justice Reeta Kohli (Judicial Member) and Madhu Sinha (Technical Member) has held that an Operational Creditor cannot combine interest under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED”) to the principal amount to meet the threshold limit under section 4 of the Insolvency and Bankruptcy Code, 2016 (“Code”) if it has obtained the MSME certificate post appointed date under section 16 read with...

Assignee Of A Financial Creditor Also A Financial Creditor U/S 5 (7) Of IBC: NCLT Kolkata

The National Company Law Tribunal, Kolkata Bench, comprising Shri Rohit Kapoor (Judicial Member) Shri Balraj Joshi (Technical Member), while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Assets Care & Reconstruction Enterprise Limited vs Ankit Metal & Power Limited has held that the assignee of a Financial Creditor is also a Financial Creditor within the scope of Section 5(7) of IBC, 2016 and is thus competent to file the case...

NCLAT Delhi: Adjudicating Authority Can Extend Payment Timelines Under Resolution Plan Without Express Concurrence Of CoC

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Technical Member) held that the Adjudicating Authority can extend payment timelines under the Resolution Plan without the express concurrence of the Committee of Creditors ('CoC'). Background Facts: State Bank of India ('SBI') as the sole member of the Committee of Creditors ('CoC') having a 100% voting share approved the Resolution Plan submitted by Ashok...

NCLAT Delhi: Extension Of Time In Payment Is Not Modification Of Resolution Plan

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Technical Member) held that an extension of time in payment is not a modification of the Resolution Plan. Background Facts: State Bank of India ('SBI') as the sole member of the Committee of Creditors ('CoC') having a 100% voting share approved the Resolution Plan submitted by Ashok Dattatray Atre and Ors. (Appellants) for the revival of Transparent Energy...

Detention Charges Come Within The Purview Of Operational Debt: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Ms. Reeta Kohli, (Judicial Member) and Madhu Sinha (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in ABC India Ltd. vs Prabhakar Engineers Pvt. Ltd. has held that Detention Charges are very much a part of the Transportation Charges and hence a part of Operational Debt. Background Facts Prabhakar Engineers Pvt. Ltd (“Corporate Debtor”) approached...

NCLT Notifies Advocates, Litigants, Interns And Advocate Clerks/Court Clerks Not To Be Entertained For Administrative Or Registry Work Beyond 05 PM

The Registrar of the National Company Law Tribunal (“NCLT”) has issued an administrative order dated 08.05.2024, intimating that in NCLT Benches, advocates, litigants, interns and advocate clerks/court clerks will not be entertained for any administrative or registry work beyond 05:00 PM. The Registrar notified that working hours of NCLT Benches is provided as per Rule 10 of NCLT Rules, 2016 read as follows: “10. Working hours.- (1) Except on Saturdays, Sundays and other National...

Decision Taken By New Resolution Professional Cannot Be Objected By Erstwhile Resolution Professional: NCLAT Delhi

The National Company Law Appellate Tribunal, Delhi Bench, comprising Shri Justice Ashok Bhushan (Chairperson) Shri Barun Mitra and Shri Arun Baroka (Technical Members), in Partha Sarathy Sarkar vs Union of India & Ors. has held that the decision taken by New Resolution Professional cannot be objected by the Erstwhile Resolution Professional after replacement who is now proceeding with the CIRP Background Facts The application was filed by Partha Sarathy Sarkar (“Erstwhile...

NCLT Mumbai: Operational Debt Under IBC Does Not Include Penalty Or Liquidated Damages

The National Company Law Tribunal ('NCLT') Mumbai, comprising Shri K.R. Saji Kumar (Judicial Member) and Shri Sanjiv Dutt (Technical Member) held that the operational debt under Insolvency and Bankruptcy Code, 2016 ('IBC') does not include penalty or liquidated damages. Background Facts: Matoshri Laxmi Sugar Co-Generation Industries Ltd. (Corporate Debtor) had failed to supply the goods on time as per the agreed terms to Sucden India Pvt. Ltd. (Applicant), the Operational Creditor....

When Claims And Counter Claims Are Involved, Liquidator Cannot Decide The Same: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Shri Justice Venugopal M. (Judicial Member) and Shri Jatindranath Swain (Technical Member), while adjudicating an application under Section 61 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in M/s. FLSmidth Private Limited vs Lanco Infratech Ltd. has held that when claim and counter claims are involved Liquidator cannot decide the same. Background Facts Lanco Infratech (“Corporate Debtor”) issued a...

Can Homebuyer's Claim For Apartment Be Rejected For Not Filing Claim During Insolvency Process Against Builder? Supreme Court To Decide

The Supreme Court 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 surrounds the insolvency process of Jaypee Infratech Limited. Its resolution plan was approved by the National Company Law Tribunal and was subsequently challenged in the Appellate Tribunal. In the main appeal, several intervention applications were filed including the one...

Ambiguities In Uploading Of NCLT Orders, Requirement Of Enclosing Certified Copies With Appeal : Supreme Court Seeks IBBI Clarification

The Supreme Court (on May 06) issued notice to the Insolvency and Bankruptcy Board of India, inter-alia, on the requirement to obtain a certified copy of the order and attach the same with the appeal. The Bench of Justices Sanjiv Khanna and Dipankar Datta has issued notice considering that there is “considerable ambiguity” in certain issues concerning the service of the orders passed by the National Company Law Tribunal, uploading of orders on the website, and the one mentioned ...