IBC
NCLT President Submits Enquiry Report After NCLAT Calls Chennai Bench Order “Rather Dubious”
Outgoing NCLT President Chief Justice (Retd.) Ramalingam Sudhakar has firmly rejected allegations of impropriety against the Chennai Bench, stating that “no material has emerged suggesting any impropriety, bias or departure from judicial discipline.” The report was submitted pursuant to an enquiry ordered by the National Company Law Appellate Tribunal in an appeal filed by Asset Reconstruction Company (India) Limited in the insolvency proceedings of Regen Powertech Private Limited. While...
Authorisation, Stamping, and IU Defects Cannot Block Insolvency Petition: NCLAT Delhi
On 6 February, the National Company Law Appellate Tribunal (NCLAT) at Delhi held that defects in authorisation, stamping, and Information Utility records cannot invalidate a Section 7 insolvency petition when the debt and default are acknowledged by the corporate debtor. A Bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey dismissed the appeal of Vinodkumar Nihalchand Parmar, which challenged an NCLT Mumbai Bench order admitting the...
NCLT Ahmedabad Refuses Travel Relief To Personal Guarantor With ₹2717 Crore Liability
The National Company Law Tribunal at Ahmedabad, on 12 February rejected a travel permission plea filed by Sunil Surendrabhai Kakkad, a personal guarantor facing liabilities of Rs. 2,717.88 crore, holding that his proposal to travel abroad for employment could jeopardise the time-bound bankruptcy process. A Bench comprising Judicial Member Chitra Hankare and Technical Member Dr. Velamur G. Venkata Chalapathy held that the applicant's presence was “absolutely necessary for the further...
Limitation For IBC Appeal Runs From Pronouncement Date, Not Knowledge: NCLAT Dismisses CIRP Appeal
The National Company Law Appellate Tribunal (NCLAT) at Delhi has dismissed an appeal challenging the admission of Corporate Insolvency Resolution Process (CIRP) against a private company as time-barred. It held that the limitation under Section 61(2) of the Insolvency and Bankruptcy Code runs from the date of pronouncement of the order, not from the date of knowledge. A bench of Judicial Member Justice Ashok Bhushan and Technical Member Barun Mitra observed: “For counting the statutory period...
NCLT Mumbai Says Mumbai, Delhi Airport Operators Are Unsecured Creditors In Jet Airways Liquidation
The National Company Law Tribunal (NCLT), Mumbai Bench, has recently held that Mumbai International Airport Ltd (MIAL) and Delhi International Airport Ltd (DIAL) are not secured creditors in the liquidation of Jet Airways (India) Ltd, rejecting their contention that airport regulations conferred a lien over aircraft for unpaid dues“Hence, we are of considered view that the applicant is an unsecured creditor and its claims is to be dealt with accordingly,” the tribunal held. Jet Airways was...
NCLAT Sets Aside Insolvency Process Against HNGIL Guarantor, Says Compromise Didn't Waive Guarantee Invocation
The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently set aside the NCLT Kolkata's order admitting DBS Bank's Section 95 application against Mukul Somany, a personal guarantor of Hindustan National Glass & Industries Ltd, holding that the bank had not invoked the guarantee before initiating insolvency proceedings. The appellate tribunal reiterated that where a guarantee deed requires a demand by the lender, invocation of the guarantee is a mandatory pre-condition before...
Bank's No Dues Certificate Not Determinative At CIRP Admission: NCLT Jaipur
The National Company Law Tribunal (NCLT) at Jaipur, has admitted Prayag Polytech Private Limited into insolvency over a Rs.34.14 crore default to Canara Bank. The bench of Judicial Member Reeta Kohli and Technical Member Kavita Bhatnagar held that disputes over “No Dues Certificates” cannot defeat a Section 7 petition at the threshold. The Tribunal observed that reliance on NOCs was “a serious defence, but it is not determinative at admission stage because the Bank's case is that the...
CoC Members Entitled Only To Fair And Liquidation Value, Not Full Valuation Reports: NCLAT Chennai
The National Company Law Appellate Tribunal at Chennai has recently observed that a resolution professional is not required to share full valuation reports with lenders (CoC) during insolvency proceedings. The tribunal referred to Regulation 35(2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which provides that after receipt of resolution plans, the resolution professional shall provide the fair value and the liquidation value to members of the Committee...
Operational Creditor Cannot Vote on Its Own Resolution Plan; Such Approval A “Material Irregularity” Under IBC: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that a resolution applicant who is not a financial creditor cannot vote on and approve its own resolution plan, declaring such approval void ab initio as it violates Section 30(5) of the Insolvency and Bankruptcy Code, 2016. The ruling was delivered by a bench comprising Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey. The tribunal observed, “In the present case the Resolution...
NCLAT Affirms NCLT New Delhi Order Rejecting Insolvency Plea Against Bajaj Appliances
The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently dismissed an insolvency plea against Bajaj Appliances Ltd., holding that a pre-existing dispute barred initiation of proceedings under the Insolvency and Bankruptcy Code. A coram of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka upheld the National Company Law Tribunal, Delhi's October 18, 2023, order rejecting the application filed by T.J. Communication Pvt. Ltd. T.J. Communication claimed it...
Once Arbitral Award Holder Files CIRP Claim, Execution Under Arbitration Law Not Maintainable: Delhi High Court
The Delhi High Court has recently observed that once a decree holder lodges its claim arising out of an arbitral award before the resolution professional during the corporate insolvency resolution process (CIRP), it cannot pursue parallel execution proceedings under the Arbitration and Conciliation Act.A single bench of Justice Harish Vaidyanathan Shankar delivered the ruling in a petition filed by Paharpur Cooling Towers Ltd, seeking enforcement of an arbitral award dated November 12, 2021...
NCLT Delhi Appoints Two-Member Committee To Monitor Jaypee Infratech Project Progress
The National Company Law Tribunal (NCLT), New Delhi, recently appointed a two-member expert committee to assess the progress of construction of Jaypee Infratech Limited (JIL) projects under the approved resolution plan. A Bench comprising President Ramalingam Sudhakar and Technical Member Ravindra Charurvedi passed the direction while hearing multiple applications raising concerns regarding delays and grievances of homebuyers. The Bench held: “Without prejudice to the contentions raised in...