NCLT Ahmedabad Directs Promoters To Deposit Rs. 7.78 Crores With Corporate Debtor Based On Forensic Audit Report

The National Company Law Tribunal (“NCLT”), Ahmedabad Bench, comprising of Shri Shammi Khan (Judicial Member) and Shri Sameer Kakar (Technical Member), has directed the Promoters/Suspended Management of Sysco Industries Ltd. (Corporate Debtor) to deposit Rs. 7.78 Crores with the Corporate Debtor on the basis of a forensic audit report. The Resolution Plan for the Corporate Debtor was approved by NCLT in 2022. Further, the amount of Rs. 7.78 Crores is to be distributed to the erstwhile CoC...

Requirement Of Minimum 100 Allottees Under Section 7 To Be Met At The Date Of Filing, Subsequent Settlement By Allottees Inconsequential: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that requirement of minimum 100 allottees to file a petition under Section 7 of IBC is to be met on the date of filing of the petition. If any allottee(s) enter settlement with the Corporate Debtor post filing of the petition, then they are not required to be excluded from the count of 100 allottees. “In Manish Kumar...

CIRP Under Section 7 Can Commence Even If Claims Of Certain Allottees Are Time Barred Or Below Threshold Of Rs. 1 Crore: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that in a petition under Section 7 of IBC jointly filed by real estate allottees, the debt of each individual allottee need not meet the minimum threshold of Rs. 1 Crore default or limitation requirements. The CIRP under Section 7 of IBC can commence even if only few Financial Creditors (allottees) fulfill the minimum ...

Section 7 Petition Seeking ‘Joint’ CIRP Of Separate Corporate Entities Involved In Common Real Estate Project Is Maintainable: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), has held that a petition under Section 7 of IBC, filed by allottees for joint CIRP of separate corporate entities involved in a common real estate project is maintainable. Three separate companies were engaged in the development of a real estate project. When the construction of units was not completed within time, the...

NCLAT Delhi: Doctrine Of Promissory Estoppel Can’t Be Applied Against An Approved Resolution Plan

The National Company Law Appellate Tribunal (“NCLAT”), Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Mr Barun Mitra and Mr Arun Baroka (Technical Members) has dismissed an appeal and held that the doctrine of promissory estoppel cannot be applied against an approved Resolution Plan by the Committee of Creditors (“CoC”) under Insolvency and Bankruptcy Code (“IBC”). Background Facts Sivana Reality Private Limited (“Corporate Debtor”) launched a Project known as ...

Fixation Of Reserve Price For Auction Being Commercial Decision Of Stakeholders Consultation Committee, NCLT Can’t Sit In Appeal; NCLT Kolkata

The National Company Law Tribunal (NCLT), Kolkata Bench, comprising of Shri Rohit Kapoor (Judicial Member) and Shri Balraj Joshi (Technical Member), has held that fixation of reserve price for auction is a commercial decision of Stakeholders Consultation Committee (SCC) and the NCLT would not sit in appeal over such decision. “We are of the considered opinion, this is a commercial decision of the Stakeholders Consultation Committee (SCC) arrived at after due deliberations. Applicant...

Gujarat High Court: Protection Granted U/S 32A(2) & 33(5) Of IBC Overrides The Power Of Enforcement Directorate To Attach The Properties Under PMLA

The Gujarat High Court has held that the protection granted under Section32A(2) and Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (“IBC”) would override the power of Enforcement Directorate to attach the properties under Section 5 of the Prevention of Money Laundering Act, 2002 (“PMLA”). A single bench of Justice Vaibhavi D. Nanavati said that the Enforcement Directorate has proceeded to confirm the order of provisional attachment passed under Section 5(1) of PMLA...

Weekly Digest Of IBC Cases: 13th To 19th November 2023

NCLAT In Absence Of Rental Agreement Between Parties, RP Can’t Demand Payment Of Usage Charges For Corporate Debtor’s Machine; NCLAT Delhi Case Title: Patsons Construction v Shri Ram Ratan Kanoongo Case No.: Company Appeal (AT) (Ins.) No. 1269 of 2022 The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has set aside a direction...

Corporate Debtor Denying Liability Prior To Issuance Of Demand Notice Is Pre Existing Dispute: NCLAT New Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Shri Barun Mitra (Technical Member) and Shri Arun Baroka (Technical Member), has held that when Corporate Debtor denied its liability to pay even prior to issuance of Demand Notice under Section 8 of IBC, then the petition under Section 9 of IBC is liable to be dismissed on the ground of pre-existing dispute. Background Facts Larsen and Toubro Ltd. (“Corporate...

Liquidator Can’t Reject A Rectified Claim For Being Time Barred: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Anil Raj Chellan (Technical Member), has held that when a creditor submits a claim before Liquidator within stipulated timeline though not in proper Form, then the Liquidator cannot reject such creditor’s claim on the premise that rectified claim was submitted after due date. The re-submission of rectified claim is a mere technical formality. Background Facts EPC...

NCLT Mumbai: Base Resolution Plan, An Attempt To Circumvent SEBI Takeover Regulation, Can’t Be Approved Under Section 54C Of IBC

The National Company Law Tribunal (“NCLAT”), Mumbai Bench, comprising of (Retd.) Justice Virendra Singh G Bisht and Shri Prabhat Kumar (Technical Member) has dismissed an application and held that Base Resolution Plan which is an attempt to circumvent SEBI Takeover Regulations, in respect of the acquisition of a shareholding in a listed entity beyond the specified threshold limit, cannot be approved even under Sec. 54C of Insolvency and Bankruptcy Code, 2016 (“IBC”) for initiation of...

NCLT Mumbai Urges IBBI To Conduct Training Session For Forensic Auditors Regarding Avoidance Transactions Under IBC

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising of Justice V.G. Bisht (Retd.) (Judicial Member) and Shri Prabhat Kumar (Technical Member), has urged the Insolvency and Bankruptcy Board of India (“IBBI”) to look into qualitative aspect of Forensic and Transaction Auditor’s Report and to conduct training session for concerned Auditors on provisions relating to Avoidance Transactions under IBC. “The IBBI may look into the qualitative aspect of Forensic and Transaction...