NCLAT New Delhi: Raising Of Amount Via Share Subscription-Cum-Shareholders Agreement Is A Commercial Borrowing And Constitutes 'Financial Debt' Under IBC

The National Company Law Appellate Tribunal ('NCLAT'), New Delhi Bench, comprising of Mr. Justice Ashok Bhushan (Chairperson) and Mr. Barun Mitra (Technical Member) dismissed an appeal challenging Corporate Insolvency Resolution Process ('CIRP') petition and held that raising of amount through Share Subscription-cum-Shareholders Agreement is a commercial borrowing and constitutes 'Financial Debt' under Insolvency and Bankruptcy Code, 2016 ('IBC'). Background Facts Kakade Estate...

Monthly Digest Of IBC Cases: November 2023

Supreme CourtIBC Resolution Plan Can't Ignore Government Dues: Supreme Court Dismisses Review Petitions Against 'Rainbow Papers' Case title: Sanjay Agarwal v. State Tax Officer Citation: 2023 LiveLaw (SC) 939 The Supreme Court has dismissed a batch of review petitions filed against a 2022 judgment which held that the definition of a secured creditor under the Insolvency and Bankruptcy Code, 2016 (“IBC”) 2016 included any government or governmental authority and that a resolution...

NCLAT Delhi: National Financial Reporting Authority Has Overriding Powers To Penalise CAs For Professional Misconduct

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr Naresh Salecha (Technical Member) has dismissed an appeal and upheld the penalty imposed by the National Financial Reporting Authority (“NFRA/Respondent”) on the auditors of Dewan Housing Finance Corporation Ltd (“DHFL”). The ruling confirms that NFRA has the right to issue a penalty retrospectively when there is misconduct. NCLAT further clarified that...

NCLAT Delhi: Period Of Limitation For Filing An Appeal U/S 61 Of IBC Starts From Date Of The Rectification Order; Rectification Order Merges With The Original Order.

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Mr Ajai Das Mehrotra (Technical Member) has allowed an appeal and held that the rectification Order of National Company Law Tribunal (“NCLT”) merges with the Original Order and the period of Limitation for filing an appeal under Section 61 of Insolvency and Bankruptcy Code, 2016 (“IBC”) starts from the date of the rectification Order. Background Facts ...

Special Bench At NCLT Amravati From 4th December 2023 Till Further Orders, Matters To Be Heard Through VC

The National Company Law Tribunal (“NCLT”) has issued a circular dated 04.12.2023, intimating the constitution of Special Bench in NCLT Amravati for the period of 04.12.2023 till further orders. The matters shall be heard through Video Conferencing. The Special Bench shall attend to the matters listed before Shri Rajeev Bhardwaj (Judicial Member) and Ms. Anuradha Sanjay Bhatia (Technical Member). The Special Bench shall comprise of: NCLT Amravati Bench Shri Rajeev Bhardwaj...

Special Bench At NCLT Principal Bench On 6th & 7th December 2023, Matters To Be Heard Through VC On 8th December 2023

The National Company Law Tribunal (“NCLT”) has issued a circular dated 04.12.2023, intimating the constitution of Special Bench in NCLT Principal Bench (New Delhi) on 06.12.2023 and 07.12.2023, since Justice Ramalingam Sudhakar (President) is on official tour from 05.12.2023 (Noon) to 09.12.2023. Further, on 08.12.2023, the matters listed before the NCLT Principal Bench shall be heard through video conferencing mode. The Special Bench shall attend to the matters listed before Justice...

NCLAT Chennai Declares Holiday On 5th December 2023 Due To Cyclonic Storm 'Michaung'

NCLAT Chennai Declares Holiday On 5th December 2023 Due To Cyclonic Storm 'Michaung' The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, has issued a circular dated 04.12.2023, intimating that NCLAT Chennai Bench would not be functional on 05.12.2023. Chennai is experiencing incessant rainfalls due to cyclonic storm “MICHAUNG”. Further, the Tamil Nadu Government has also issued a Government Order dated 04.12.2023 bearing G.O.Ms.752, whereby 05.12.2023 (Tuesday)...

ESI Dues Not At Par With PF, Pension Or Gratuity Dues; Neither Excluded From Liquidation Estate : NCLT Ahmedabad

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Mrs. Chitra Hankare (Judicial Member) and Dr. Velamur G Venkata Chalapathy (Technical Member), has held that the dues of Employees State Insurance Corporation (ESIC) are not at par with the dues of Provident Fund, Pension Fund or Gratuity Fund under IBC. Consequently, ESIC dues not being 'workmen dues', are neither entitled to be excluded from liquidation estate nor entitled to be paid in priority over other dues. ...

NCLT Kolkata: Explicit Written Agreement Of Loan Compulsory For NBFC To Establish 'Financial Debt'

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member) dismissing a CIRP petition held that an explicit written agreement of loan is compulsory for the Financial Creditor for being a NBFC to demonstrate whether the amount disbursed constituted a 'financial debt' under Insolvency and Bankruptcy Code, 2016 (IBC). Background Facts Desana Impex Limited (Financial Creditor) initiated a...

NCLT Kolkata: CIRP Petition U/S 10 Avoiding Income Tax Liability Not Maintainable Under The IBC

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Smt. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member) has held that a Corporate Insolvency Resolution Process (CIRP) petition filed under Section 10 of Insolvency and Bankruptcy Code, 2016 (IBC) to avoid Income Tax liability is not maintainable. Background Facts On 25.03.2023, Jayam Vyapaar Pvt. Ltd. (Corporate Applicant) filed a petition under Section 10 of IBC for initiation of...

Weekly Digest Of IBC Cases: 27th November To 3rd December 2023

Supreme Court IBC | For Rejection Of A Resolution Plan Under Section 31(2), NCLT Must Pass A Reasoned Order: Supreme Court Case Title: Ramkrishna Forgings Limited v Ravindra Loonkar & Anr. Citation: CIVIL APPEAL No.1527 OF 2022 The Supreme Court bench comprising Justice Vikram Nath and Justice Ahsanuddin Amanullah, has held that when the NCLT exercises its power under Section 31(2) of the Insolvency and Bankruptcy Code, 2016 to not approve a resolution plan, then a ...

NCLAT Chennai: Amount Paid As Part Of Business Transfer Agreement, Not A Financial Creditor.

The National Company Law Appellate Tribunal (“NCLAT”), Chennai Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Shreesha Merla (Technical Member) has dismissed an appeal and held that claims of a Financial Creditor and members of CoC cannot be reargued once the order of NCLAT has already attained finality. Background Facts On 02/04/2011, Mahal Hotel Private Limited (“Appellant”) had entered into a Business Transfer Agreement (“BTA”) with the Corporate Debtor for...