NCLAT Delhi: Corporate Debtor Can't Be Absolved From Liability Just Because Insurance Claim Received By Operational Creditor

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) held that the Corporate Debtor cannot be absolved from its liability to discharge its Operational debt by the Insurance Company's payment to the Operational Creditor of its claim and the same cannot be a ground to reject the Corporate Insolvency Resolution Process ('CIRP') application under Section 9 of Insolvency and Bankruptcy Code,...

Suspended Directors Can't Transfer Amount From Corporate Debtor's Account During Stay On CIRP, NCLT Mumbai Directs Refund

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Ms. Reeta Kohli (Judicial Member) and Shri Sanjiv Dutt (Technical Member), has held that Suspended Directors of Corporate Debtor cannot transfer amounts from the Corporate Debtor's account while there is a stay on CIRP. The NCLAT stayed the CIRP and before vacation of stay the Suspended Directors transferred certain amounts from the Corporate Debtor's account towards loan payment of Group Companies. The Bench...

Claim Arising Out Of Arbitral Award Against Which Section 34 Proceedings Are Pending, NCLT Kolkata Upholds RP's Decision To Admit Claim Contingently

The National Company Law Tribunal (“NCLT”), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has upheld the Resolution Professional's decision to admit claim arising out of an arbitral Award as contingent claim, since proceedings under Section 34 of Arbitration and Conciliation Act, 1996 are pending before the High Court against the Award. Background Facts Proton Steels Limited (“Applicant”) entered into a contract with...

IBC | Inappropriate For NCLAT To Direct NCLT To Admit Petition Under Section 7 Without Evaluating Rival Contentions On Merits: Supreme Court

The Supreme Court has set aside an order passed by the National Company Law Appellate Tribunal (“NCLAT”) whereby the National Company Law Tribunal (“NCLT”) was directed to admit a petition under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC”).The Bench comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that it was inappropriate for the NCLAT to direct the NCLT to admit the application under Section 7 of IBC...

Scheme Of Compromise Decided In Absence Of Shareholder Who Submitted It, NCLAT Chennai Directs Re-Consideration In Presence Of The Shareholder

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Ms. Shreesha Merla (Technical Member), has directed the Liquidator to convene a meeting of the Stakeholders Consultation Committee (SCC) to re-consider the compromise scheme submitted by a shareholder, in the presence of such shareholder. A shareholder of the Corporate Debtor had submitted a compromise scheme under Section 230 of the Companies Act, 2013...

IBC | Statutory Set Off Or Insolvency Set Off Inapplicable To Corporate Insolvency Resolution Process: Supreme Court

The Supreme Court has held statutory set off or insolvency set off is not applicable to Corporate Insolvency Resolution Process (“CIRP”) proceedings under the Insolvency and Bankruptcy Code, 2016 (“IBC”). Further, Regulation 29 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 (“Liquidation Regulations”), which provides for mutual dealing and set off, does not apply to Part II of the IBC which deals with CIRP.The principle of Set-off recognizes the right of...

NCLAT Delhi: Once CIRP Has Stayed, Resolution Professional Can't Be Directed To Hand Over The Charge Of Corporate Debtor To Ex-Management

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench comprising of Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) allowed the appeals and held that RP cannot be directed to hand over the charge of Corporate Debtor to the Ex-management, once CIRP has stayed. Background Facts: On 19.01.2021, the Corporate Insolvency Resolution Process ('CIRP') was initiated against CMYK Printech Ltd. ('Corporate Debtor), and the Interim Resolution...

Monthly Digest Of IBC Cases: December 2023

Supreme Court IBC | When Matter Heard But No Order Pronounced On The Same Day, Limitation To Commence From The Date When Order Gets Uploaded: Supreme Court Case Title: Sanjay Pandurang Kalate v Vistra ITCL (India) Limited and Others Case No.: Civil Appeal Nos 7467-7468 of 2023 The Supreme Court bench comprising Chief Justice of India Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala and Justice Manoj Misra, has held that when the NCLT hears a matter on a particular date but...

Weekly Digest Of IBC Cases: 25th To 31st December 2023

NCLAT NCLAT New Delhi: Barter Agreements Don't Constitute 'Operational Debt' Case Title: Real Estate Regulatory Authority vs. D.B. Corp Ltd. & Anr. Case No.: Company Appeal (AT) (Insolvency) No.1172-1173 of 2022 The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), has held that the Corporate Insolvency Resolution Process ('CIRP') cannot be initiated under Section 9 of...

NCLAT Chennai: Resolution Professional Is Empowered U/S 25(1) Of IBC To Reject CoC's Proposal For Renewal Of Bank Guarantees By Corporate Debtor

The National Company Law Appellate Tribunal ('NCLAT'), Chennai Bench comprising of Justice Rakesh Kumar Jain (Judicial Member) and Shreesha Merla (Technical Member) held that the Resolution Professional ('RP') is empowered under Section 25(1) of Insolvency and Bankruptcy Code, 2016 ('IBC') to reject the proposal of Committee of Creditors ('CoC') for renewal of Bank Guarantees provided by the Corporate Debtor. Background Facts: KSK Mahanadi Power Company Ltd. ('KMPCL'/ 'Corporate...

NCLT Mumbai: Financial Creditor Can't Initiate CIRP Against Successful Resolution Applicant On Default Of Payment As Per Resolution Plan

The National Company Law Tribunal ('NCLT'), Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member) held that the Financial Creditor cannot initiate a Corporate Insolvency Resolution Process ('CIRP') application against the Successful Resolution Applicant ('SRA') on default in payment to Stakeholders/Creditors as per terms of the approved Resolution Plan under Insolvency and Bankruptcy Code, 2016 ('IBC'). Background Facts: ...

NCLT Delhi Approves Resolution Plan of Ramkrishna Forgings Ltd For ACIL Ltd.

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Shri Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), has approved the Resolution Plan submitted by M/s Ramkrishna Forgings Limited for ACIL Ltd. The Resolution Plan is valued at Rs. 129.5 Crores, while the total admitted claims of the Corporate Debtor amounts to Rs. 1,782 Crores. Background Facts ACIL Ltd. (“Corporate Debtor”) is engaged in manufacturing of high...