Creditors Cannot Bypass COVID-Era Insolvency Bar Through Arbitral Award Or Fresh Demand: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has recently held that creditors cannot circumvent the insolvency bar imposed during the COVID-19 period by relying on a subsequent arbitral award or a fresh demand arising from the same default. The tribunal observed that accepting such an interpretation would defeat the purpose of the statutory protection. A bench of Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan dismissed an insolvency petition filed by NKGSB...

ARC Must Establish Guarantee Was Assigned Before Proceeding Against Personal Guarantor: NCLT Mumbai

An Asset Reconstruction Company cannot proceed against an alleged guarantor merely by establishing the existence of a guarantee and must also show that the guarantee was assigned to it, the National Company Law Tribunal (NCLT), Mumbai, has held. A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar rendered the ruling while dismissing an insolvency petition filed by Omkara Assets Reconstruction Pvt Ltd against Agnello Louis D'Souza. The bench held, “In our...

NCLT Allahabad Rejects Insolvency Plea Against Noida Metro Rail Over Pre-Existing Dispute

The Allahabad Bench of the National Company Law Tribunal (NCLT) has dismissed an insolvency plea filed by Empire Transport Services Limited (ETSL) against Noida Metro Rail Corporation Limited (NMRC). The plea arose from alleged unpaid dues under a Bus Operators Agreement for operation and maintenance of bus services in Noida, Greater Noida and the Noida-Greater Noida connectivity corridor. A bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma observed that the material on...

Part-Payments After Demand Notice Do Not Negate Pre-Existing Dispute In Insolvency Plea: NCLT Bengaluru

The National Company Law Tribunal (NCLT) at Bengaluru has held that part-payments made after issuance of a demand notice do not, by themselves, conclusively establish the absence of a dispute over the entire operational debt claimed in an insolvency petition where the quantum of liability remains disputed. The tribunal dismissed a plea filed by a shareholder and erstwhile director of IC India Pvt Ltd. A bench of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada...

Fresh Relief On New Facts Not Fraudulent Despite Earlier Denial Of Similar Claim: NCLT Mumbai

On 11 June, the Mumbai Bench of the National Company Law Tribunal (NCLT) held that a party's failure to obtain a relief in earlier proceedings does not make a subsequent application seeking the same relief fraudulent or malicious when it is based on fresh facts and supervening events under Section 65 of the Insolvency and Bankruptcy Code. Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar dismissed an application filed by Jyoti Structures Limited seeking rejection of...

NCLT's Scrutiny Of Applicant's Standing To Invoke Personal Insolvency Process Is Not Adjudication: Karnataka HC

The Karnataka High Court has held that the National Company Law Tribunal (NCLT) is entitled to examine whether an applicant possesses the requisite locus standi to invoke the personal guarantor insolvency framework before permitting the process to proceed. The court held that such an exercise does not amount to an adjudication of the insolvency claim on merits. Justice Suraj Govindaraj observed: “Thus, when the National Company Law Tribunal examines whether an applicant possesses the...

'Other Creditors' Have No Right To Pre‑Approval Disclosure Of Resolution Plan: NCLT Chandigarh

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 5 June dismissed an application seeking disclosure of a resolution plan before its approval and held that “Other Creditors” cannot access it at the pre-approval stage. Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal heard the application filed by Sandeep Kumar and two others and rejected it. The Bench held: “In any event, the present Applicants are admittedly 'Other Creditors' and not members of the CoC...

NCLT Bengaluru Declares Congress MLC Naseer Ahmed Bankrupt Over ₹1,454 Crore Personal Guarantee Dues

The National Company Law Tribunal (NCLT) at Bengaluru recently ordered Congress MLC Naseer Ahmed bankrupt. The Tribunal noted that he failed to submit any repayment plan during his personal insolvency resolution process. The proceedings relate to dues of ₹1,454.71 crore arising from personal guarantees furnished for credit facilities extended to Scotts Garments Limited. A bench of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada held that the requirements for...

NCLT Hyderabad Directs Reconsideration Of Sarda Agro Scheme After HC Removes Wilful Defaulter Tag

The Hyderabad Bench of the National Company Law Tribunal (NCLT) on 22 May allowed an application filed by Ashok Kumar Sarda, promoter and former director of Sarda Agro Oils Limited, and Vijay Sarda, a shareholder, and directed the liquidator to reconsider their compromise scheme. Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri held that the scheme required reconsideration after the Telangana High Court set aside the wilful defaulter classification that had led to their...

NCLT Mumbai Approves Sunsai Media's Resolution Plan For Vin Semiconductors With ₹5.69 Crore Revival Package

The Mumbai Bench of the National Company Law Tribunal (NCLT) on 8 June approved the resolution plan submitted by Sunsai Media Developers Pvt Ltd for Vin Semiconductors Pvt Ltd, finding that it complied with the Insolvency and Bankruptcy Code and CIRP Regulations. Judicial Member Ashish Kalia and Technical Member Charanjeet Singh Gulati accepted the Committee of Creditors' (CoC) decision, which approved the plan with a 99.43% voting share, paving the way for the company's revival through a...

Kerala High Court Dismisses Appeal Seeking CBI, ED, NIA Probe Into Byju's Insolvency

The Kerala High Court on Friday dismissed an appeal against a single judge's order refusing to direct a Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and National Investigation Agency (NIA) probe into alleged irregularities in the insolvency proceedings of Think and Learn Private Limited (Byju's). A division bench of Justice K Natarajan and Justice Johnson John held that the petitioners had already approached the Bengaluru police on the same allegations. The resulting...

IBBI Requires Going Concern Assessment Reports Before CoC Decides On Continuation Of Operations

The Insolvency and Bankruptcy Board of India (IBBI) has amended the corporate insolvency resolution process framework to require resolution professionals to prepare a Going Concern Assessment Report. This will help the Committee of Creditors (CoC) decide whether the corporate debtor should continue operating during the insolvency process. If operations are to continue, the committee will also determine their scope and duration. The changes have been brought in through the Insolvency and...