IBBI Rescinds Circulars Pertaining To Insolvency Professionals

The Insolvency and Bankruptcy Board of India ("IBBI") vide its circular dated 09.11.2022 has rescinded its certain circulars pertaining to Insolvency Professionals, as these circulars now form a part of the IBBI (Insolvency Professionals) Regulations, 2016; IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016; and the IBBI (Information Utilities) Regulations, 2017. Brief background The IBBI had issued the following circulars in order to...

IBC Cases Weekly Round-Up: 31st October To 6th November 2022

NCLAT Change In Composition Of COC Will Not Affect Its Prior Decisions: NCLAT New Delhi Case Title: DBS Bank v. Rakesh Kumar Jain Case No.: CA (AT) (Ins) No. 540/2021 The National Company Law Appellate Tribunal bench comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member) has held that the change in composition of the Committee of Creditors (COC) of the Corporate Debtor will not affect its previous decision and the same will be...

Union Govt. Appoints Judicial & Technical Members For NCLT

The Government of India vide its notification dated 05.11.2022 approved the appointment of 9 judicial members and 6 technical members in the National Company Law Tribunal (NCLT). Judicial Members 1.T Krishna Valli, Retd. Judge, Madras High Court 2.Vikas Kumar Srivastav, Retd. Judge, Allahabad High Court 3.Kuldeep Kumar Kareer, Retd. District Judge 4.Vishesh Sharma, Retd. District Judge5.Adv. Ashok Kumar Bhardwaj6.Adv. Praveen Gupta7.Adv. Mahendra Khandelwal8.Bidisha Banerjee,...

Default During Section 10A Period Cannot Be Clubbed To Meet Threshold Requirement Under Insolvency And Bankruptcy Code, 2016: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) recently while deciding an appeal filed by the Operational Creditor against the order dated 17.08.2022 passed by NCLT, New Delhi held that amount of default occurred during the Section 10A period (24.03.2020-23.03.2021) of the Insolvency & Bankruptcy Code, 2016 (IBC/Code) cannot be clubbed by the Operational Creditor to meet the threshold requirement of One Crore under Section 4 of the Code. The Operational Creditor filed a...

Interim Moratorium Under Section 96 Of Insolvency & Bankruptcy Code, 2016 Is Limited To Particular Guarantor And Will Not Protect The Other Personal Co-Guarantors Of Same Debt: Delhi High Court

The Delhi High Court recently while dealing with two summary suits filed by creditors of Bhushan Steel limited against the ex-promoters of Bhushan Steel namely Brij Bhushan Singhal and Neeraj Singhal for recovery of money held that the interim moratorium under section 96 of the Insolvency & Bankruptcy Code, 2016 (IBC/Code) is specific to all debts of a particular debtor and will not be applicable to other personal co-guarantors. Single Judge bench of Justice Amit Bansal had...

When Corporate Debtor Does Not Create A Gratuity Fund, No Gratuity Is Payable: NCLT Chandigarh

The National Company Law Tribunal ("NCLT"), Chandigarh Bench, comprising of Shri Harnam Singh Thakur (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), while adjudicating an application filed in Small Industries Development Bank of India (SIDBI)v International Mega Food Park Limited, has held that if the Corporate Debtor had not created a Gratuity Fund, then the Resolution Professional cannot be directed to pay Gratuity to the employee(s). Further, the salary and leave...

NCLAT Delhi Upholds Dismissal Of Section 9 Petition In Absence Of Cogent Evidence To Prove Supply Of Goods

The National Company Law Appellate Tribunal ("NCLAT"), New Delhi Bench, comprising of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Kanthi Narahari (Technical Member), while adjudicating an appeal filed in M/s Mahadev Trading Company v M/s Supreet Chemicals Pvt. Ltd., has held that in absence of cogent evidence to prove that goods were supplied to the Corporate Debtor, a petition filed under Section 9 of IBC by Operational Creditor cannot be admitted. Background Facts M/s ...

IBBI Amends Model Bye-Laws Regulations For Insolvency Professional Agencies

The Insolvency and Bankruptcy Board of India ("IBBI") has amended the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 ("Model Bye laws Regulations") for a second time vide Gazette notification dated 31.10.2022. The Model Bye Laws Regulations lay down the governance structure and provides for model bye laws of the Insolvency Professional Agencies (IPA). The IBBI had issued three circulars, namely, (i) Circular No. IP/005/2018 dated...

Continuation Of RP Till Appointment Of Liquidator Doesn't Contravene IBC: NCLT Chandigarh

The National Company Law Tribunal ("NCLT"), Chandigarh Bench, comprising of Shri Harnam Singh Thakur (Judicial Member) and Shri Subrata Kumar Dash (Technical Member), while adjudicating a petition filed in Brij Lal Ashok Kumar v Tara Chand Rice Mills Pvt. Ltd., has held that in absence of any order from the Adjudicating Authority appointing a liquidator, the Resolution Professional's continuation in its position is not in contravention of IBC. The Bench also directed the Liquidator to pay...

Past Tax Liabilities That Are Not Part Of Resolution Plan Shall Stand Extinguished: NCLT Mumbai

The National Company Law Tribunal ("NCLT"), Mumbai Bench, comprising of Justice P.N. Deshmukh (Judicial Member) and Shri Shyam Babu Gautam (Technical Member), while adjudicating a petition filed in Subodh Kumar Agrawal v Taguda Pte. Limited, has held that all past liabilities arising out of any levies/tax dues to any government authorities, etc., which accrued during CIRP period and are not part of the Resolution Plan, shall stand extinguished from the date of approval of the Resolution...

Change In Composition Of COC Will Not Affect Its Prior Decisions: NCLAT New Delhi

The National Company Law Appellate Tribunal bench comprising of Justice Anant Bijay Singh and Ms. Shreesha Merla held that the change in composition of the Committee of Creditors (COC) of the Corporate Debtor will not affect its previous decision and the same will be binding on the newly included members of the COC. Previously, NCLT New Delhi directed the DBS Bank to pay Rs. 10.20 Lakhs to the Resolution Professional as the payment towards its fees and an appeal was filed by the DBS...

Monthly Digest Of IBC Cases: October 2022

Supreme CourtDiscretion Of NCLT Under Section 7(5) IBC - Observations In 'Vidarbha Industries' Made In Context Of Case: Supreme Court Refuses ReviewCase Title : Axis Bank Ltd versus Vidarbha Industries Power Ltd Case No.: 2022 LiveLaw (SC) 817, RP (Civil) 1043/2022 The Supreme Court Bench comprising of Justices Indira Banerjee and JK Maheshwari held that there is no ground to review the judgment in Vidarbha Industries Power Ltd. vs Axis Bank Limited which held that the National...