NCLAT Delhi Imposes Cost Of Rs. 2 Lakhs On Bidder Who Initiated Misconceived Litigation

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Anant Bijay Singh (Judicial Member) and Ms. Shreesha Merla (Technical Member), while adjudicating an appeal filed in M/s. SGA Fashion Pvt. Ltd. v CMA Sandeep Kumar Bhatt, has rejected the application filed by an auction bidder close to the auction date, wherein the bidder after having participated in the bidding process, had turned around and challenged the eligibility criteria for being...

Colossal Delay Of 296 Days By NCLT In Approving Resolution Plan After Approval Of Resolution Plan By Committee Of Creditors In FY 2021-22

"Judicial delay was one of the major reasons for the failure of the insolvency regime that was in effect prior to IBC. We cannot let the present insolvency regime meet the same fate." -Justice DY Chandrachud in Ebix v. Educompp, 2022 The Insolvency & Bankruptcy Code, 2016 (IBC/Code) was enacted by the Government of India to eliminate the delays in resolving insolvency and to enhance the ease of doing business in India. One of the primary objective of IBC is to resolve the...

IBC Cases Weekly Round-Up: 19 September To 25 September, 2022

Supreme Court IBC - Approval Of A Resolution In Respect Of One Borrower Cannot Discharge A Co-Borrower: Supreme Court Case Title: Maitreya Doshi vs Anand Rathi Global Finance Ltd Case No.: 2022 LiveLaw (SC) 789, CA 6613 OF 2021 The Supreme Court Bench comprising of Justices Indira Banerjee and JK Maheshwari has held that approval of a resolution in respect of one borrower cannot discharge a co-borrower. The Bench observed that if there are two borrowers or if two corporate...

NCLT Delhi Issues Notice To Spicejet In An Insolvency Plea U/S 9 Of IBC

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri P.S.N. Prasad Judicial Member) and Shri Rahul Bhatnagar (Technical Member), while adjudicating a petition filed in Acres Buildwell Pvt. Ltd. v Spicejet Ltd. , has issued notice to Spicejet Ltd. to appear and file its Reply in a petition under Section 9 of IBC filed against it. The next date of hearing is 30.09.2022. Background Facts Spicejet Ltd. is engaged in affordable aviation business with...

Asian Hotels (West), Owner Of Hyatt Regency (Mumbai), Admitted Into Insolvency: NCLT Delhi

The National Company Law Tribunal ("NCLT"), New Delhi Bench, comprising of Shri Dharminder Singh (Judicial Member) and Shri Binod Kumar Sinha (Technical Member), while adjudicating an application filed in JM Financial Asset Reconstruction Co. Ltd. v Asian Hotel (West) Ltd., has initiated Corporate Insolvency Resolution Process ("CIRP") against Asian Hotels (West) Ltd. over a default of Rs. 264,07,35,129/-. The Asian Hotels (West) Ltd. owns the five star hotels namely Hotel Hyatt Regency...

Moratorium Doesn't Apply On Property Unlawfully In Possession Of Corporate Debtor: NCLT Hyderabad

The National Company Law Tribunal ("NCLT"), Hyderabad Bench, comprising of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Shri Veera Brahma Rao Arekapudi (Technical Member), while adjudicating an application filed in State Bank of India v Meenakshi Energy Ltd., has held that moratorium imposed under Section 14 of IBC is not applicable to properties which are in unlawful possession of the Corporate Debtor. Background Facts Around 2009, the Meenakshi Energy Ltd....

Analyzing The Applicability Of Section 48 Of The GVAT On The Frontier Of Section 53 Of IBC, 2016

Recently, in the case of State Tax Officer v. Rainbow Papers Ltd, 2022 SCC OnLine SC 1162, decided by a bench comprising Indira Banerjee and AS Bopanna, JJ has reversed the earlier order wherein it was held that Section 53 of Insolvency and Bankruptcy Code will prevail over GVAT Act as the first claim over the property of Corporate Debtor cannot be made by the Government. Section 48 of the Gujarat Value Added Tax, 2002 provides that the first charge on the property of a dealer in respect...

IBC - No Bar To Withdraw Admitted CIRP Application Before Constitution Of Committee Of Creditors : Supreme Court

The Supreme Court observed that there is no bar to withdrawal of an admitted CIRP application before constitution of Committee of Creditors.The settlement cannot be stifled before the constitution of the Committee of Creditors in anticipation of claims against the Corporate Debtor from third persons, the bench of Justices Indira Banerjee and JK Maheshwari said.The court observed thus while dismissing appeal against NCLAT order which gave the parties the opportunity to settle their disputes...

DRT Can Impose Cost But Not Other Stringent Conditions While Restoring Application U/S 22(2)(g) RDB Act: Madhya Pradesh HC

The Madhya Pradesh High Court recently set aside an order of the Debt Recovery Tribunal, whereby an application for restoration under Section 22(2)(g) of the Recovery of Debts and Bankruptcy Act was allowed subject to fulfilling certain conditions.The division bench comprising Justice Sujoy Paul and Justice P.C. Gupta observed that there was no enabling provision under the Act which vested the Tribunal with the power to impose conditions that it did while restoring the application under Section...

IBC - Approval Of A Resolution In Respect Of One Borrower Cannot Discharge A Co-Borrower : Supreme Court

The Supreme Court observed that approval of a resolution in respect of one borrower cannot discharge a co-borrower.If there are two borrowers or if two corporate bodies fall within the ambit of corporate debtors, there is no reason why proceedings under Section 7 of the IBC cannot be initiated against both the Corporate Debtors, the bench of Justices Indira Banerjee and JK Maheshwari observed.In this case, Adjudicating Authority (National Company Law Tribunal), NCLT, Mumbai Bench admitted a...

COC To Function As Stakeholder's Consultation Committee For First 60 Days: IBBI Amends Liquidation Process Regulations

The Insolvency and Bankruptcy Board of India ("IBBI") on 16.09.2022 has notified amendments to the IBBI (Voluntary Liquidation Process) Regulations, 2016 ("Voluntary Liquidation Regulations") and IBBI (Liquidation Process) Regulations, 2016 ("Liquidation Regulations") for a second time. These amended Regulations have come into force on 16.09.2022. Detailed Overview In exercise of the powers conferred by Section 196(1)(t) read with Section 240 of the Insolvency and Bankruptcy Code,...

Corporate Debtor Willing To Pay Full Amount, Financial Creditor Opposes , NCLAT Upholds Dismissal Of Section 7 Petition

The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), while adjudicating an appeal filed in Reliance Commercial Finance Limited v Darode Jog Builder Pvt. Ltd., has upheld the Adjudicating Authority's decision to not admit a petition under Section 7 of IBC, despite there being a debt and default. The Bench accorded the Corporate...