IBC | NCLT Has To Admit Sec 7 Petition If Debt Is Due; Decision In 'Vidarbha Industries' Based On Its Facts : Supreme Court

The Supreme Court has held that if the existence of a financial debt and its default on the part of Corporate Debtor has been proved, then the National Company Law Tribunal (“NCLT”) is left with no option apart from admitting the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (“IBC”). The only ground on which a petition under Section 7 of IBC can be rejected is when the debt in question has not become due and payable(M. Suresh Kumar Reddy v Canara Bank & Ors.).The Bench...

NCLT Delhi Admits Go Airlines Into Insolvency, Directs IRP To Ensure Employees Are Not Retrenched

The National Company Law Tribunal (“NCLT”), New Delhi Bench, comprising of Justice Ramalingam Sudhakar (President) and Shri L.N. Gupta (Technical Member), while adjudicating a petition filed by Go Airlines (India) Limited, has admitted Go Airlines (India) Limited into Corporate Insolvency Resolution Process (“CIRP”) and Mr. Abhilash Lal has been appointed as the Interim Resolution Professional (“IRP”). The Bench has directed the IRP to ensure that retrenchment of employees is not resorted...

Person Who Only Advances An Amount For Supply Of Goods & Services Is Not An “Operational Creditor”: NCLT Chennai

The National Company Law Tribunal, Chennai Bench, comprising Shri Sanjiv Jain (Judicial Member) and Shri Sameer Kakar (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Mr.V. Umadevi vs Kumarna Gin & Pressing Pvt. Limited has held that the payment of advance amount to receive the supply of goods and services from the Corporate Debtor does not come within the ambit of Operational Debt. Background Facts ...

Claim Of Compensation Cannot Become Part Of Operational Debt Until The Liability Is Adjudicated By A Competent Authority: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Shri Kuldip Kumar Kareer (Judicial Member) and Smt. Anuradha Sanjay Bhatia (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Chandrashekhar Export Pvt. Ltd vs Babanraoji Shinde Sugar & Allied Industries Ltd. has held that Operational Debt must be crystallized, undisputed and not something which requires adjudication by a competent authority. ...

Flats Sold After Completion Of Construction To Be Included In Computation Of Threshold Limit Under Section 7, IBC: NCLT New Delhi Reiterates

The National Company Law Tribunal, New Delhi Bench, comprising Shri P.S.N Prasad (Judicial Member) and Dr. Binod Kumar Sinha (Technical Member), while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) in Uttam Singhal & Ors vs M/s Anushree Home Developers Ltd.& Anr. has reiterated that the persons to who flats have already been sold after completing the construction would still be allottees and would be included for computation of...

NCLT Chennai Order Dissolution Of M/s Boss Profiles Limited Under Section 54 Of IBC

NCLT Chennai has ordered for dissolution of M/s Boss Profiles Limited (“Corporate Debtor”) under section 54 of Insolvency and Bankruptcy Code, 2016(“IBC, 2016”). The Corporate Debtor filed a petition before NCLT Chennai through its Liquidator for Dissolution of the Corporate Debtor The Tribunal had admitted the Corporate Debtor into Corporate Insolvency Resolution Process (“CIRP”) vide an order dated 11.08.2017. There was no resolution of the Corporate Debtor, an application for ...

Allegation That IRP/RP Did Not Conduct CIRP As Per Law, Not A Ground To Challenge Resolution Plan: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), while adjudicating an appeal filed in Brijesh Singh Bhadauriya v Pinakin Shah, has held that the order approving the Resolution Plan cannot be interfered with on a mere allegation that the IRP or the Resolution Professional has not conducted the CIRP in accordance with law. Background Facts Sintex Industries Ltd....

IBC | Date Of Order Pronouncement & Time Taken To Provide Certified Copy Excluded From Limitation Period For Appeal To NCLAT : Supreme Court

The Supreme Court has held that for the purpose of computing limitation for filing of appeal under Section 61(2) of the Insolvency and Bankruptcy Code, 2016, the time taken by Tribunal for providing certified copy of order to be challenged ought to be excluded from computation of limitation.The Bench comprising Chief Justice of India Dr. Dhananjaya Y Chandrachud and Justice J B Pardiwala, while adjudicating an appeal filed in Sanket Kumar Agarwal & Anr v APG Logistics Private Limited, has...

Weekly Digest Of IBC Cases: 1 May To 7 May 2023

Supreme Court IBC| Principle Of Commercial Wisdom Not Validate A Decision Taken By CoC In Contravention Of Law: Supreme Court Case Title: M.K. Rajagopalan v Dr. Periasamy Palani Gounder Citation: 2023 LiveLaw (SC) 403 The Supreme Court Bench comprising of Justice Dinesh Maheshwari and Justice Vikram Nath, has held that the principle of ‘Commercial Wisdom’ of the Committee of Creditors (“CoC”) cannot brush aside the shortcomings of the CoC in cases where decision making was...

NCLT Mumbai Initiates Insolvency Process Against Future Lifestyle Fashions, A Future Group Enterprise

The National Company Law Tribunal (“NCLT”), Mumbai Bench, comprising of Shri Kuldip Kumar Kareer (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while adjudicating a petition filed in Bank of India v Future Lifestyle Fashions Limited, has initiated Corporate Insolvency Resolution Process (“CIRP”) against Future Lifestyle Fashions Ltd., which is a Future Group enterprise promoted by Mr. Kishore Biyani. Further, Mr. Ravi Sethia has been appointed as the Interim Resolution...

IBC| Principle Of Commercial Wisdom Not Validate A Decision Taken By CoC In Contravention Of Law : Supreme Court

The Supreme Court has held that the principle of ‘Commercial Wisdom’ of the Committee of Creditors (“CoC”) cannot brush aside the shortcomings of the CoC in cases where decision making was done in contravention to a law which is in force for the time being. The Bench comprising of Justice Dinesh Maheshwari and Justice Vikram Nath, while adjudicating an appeal filed in M.K. Rajagopalan v Dr. Periasamy Palani Gounder & Anr., has upheld the NCLAT’s order whereby the Successful...

IBC| Ineligibility Of Resolution Applicant As Per S.164(2)(b) Companies Act Can't Be Presumed Unless Competent Authority Declares Disqualification: Supreme Court

The Supreme Court has held that a resolution applicant cannot be rendered ineligible to submit a resolution plan under the Insolvency and Bankruptcy Code, 2016 (“IBC”), by assuming his/her disqualification under Section 164(2)(b) of the Companies Act, 2013, unless a categorical order disqualifying him/her to act as a director of any company is passed by the competent authority. The Bench comprising of Justice Dinesh Maheshwari and Justice Vikram Nath, while adjudicating an appeal...