Mediation Order And Dishonoured Cheque Does Not Imply Extension Of Limitation U/S 9, IBC: NCLAT, Delhi

The NCLAT, Delhi in a Bench comprising of Justice Ashok Bhushan (Chairperson), Dr. Ashok Kumar Mishra and Dr. Alok Srivastava (Technical Members) in the case of Ravi Iron Ltd. v. Jia Lal Kishori Lal & Ors. held that an order of mediation along with dishonoured cheques does not imply an extension of limitation for the purposes of Section 9 of the Insolvency and Bankruptcy Code, 2016. The Appellants/Operational Creditors filed an appeal against the order of the NCLT, New Delhi Bench...

'Co-Operative Society' Is Not A 'Corporate Person' Under IBC To Which The Code Applies: NCLT Mumbai

NCLT, Mumbai in a Bench comprising of Mr. Rajesh Sharma (Technical Member) and Mr. H.V. Subba Rao (Judicial Member) in the case of The Solapur Dist. Central Co – Operative Bank Limited v. Sangola Taluka Sahakari Sakhar Karkhana Limited dismissed an application filed u/s 7 of the Insolvency and Bankruptcy Code, 2016 against Sangola Taluka Sahakari Sakhar Karkhana Limited/Corporate Debtor on the ground that the same is a Co-Operative Society, and hence is not a 'Corporate Person' to...

Insufficiency Of Stamp Duty Irrelevant In S. 7 Proceedings Under IBC: NCLT Mumbai Bench

The NCLT Mumbai Bench comprising of H.V. Subba Rao (Judicial Member) in Vistra ITCL India Ltd. v. Satra Properties (India) Ltd. held that insufficiency of stamp duty is not to be looked at in a Section 7 application, more so when 'debt' and 'default' are proved otherwise than by looking into these documents. The application was referred to H.V Subba Rao by the then Acting President for his opinion as a third person due to a difference of opinion between Smt. Suchitra Kanuparthi,...

Not Adding Interest To The Principal To Arrive At Threshold Of Rs.1 Crore ; A Critique On CBRE V. United Concepts Decision

In CBRE V. South Asia Private Ltd v. M/s. United Concepts and Solutions Private Limited ("CBRE"), the Principal Bench of the National Company Law Tribunal ("NCLT") recently took a view that "the Interest amount cannot be clubbed with the Principal amount of debt to arrive at the minimum threshold of Rs.1 Crore for complying with the provision of Section 4 of IBC, 2016." In the said case, the operational creditor, CBRE had initiated Corporate Insolvency Resolution Proceedings ("CIRP") under...

NCLT Chennai Admits Application Initiating CIRP Against Coastal Energen Pvt. Ltd.

The NCLT, Chennai Bench comprising of R. Sucharitha (Judicial Member) and Sameer Kakar (Technical Member) in State Bank of India v. Coastal Energen Private Limited, admitted the application of State Bank of India/ Financial Creditor for initiation of CIRP against Coastal Energen Pvt. Ltd./ Corporate Debtor filed u/s 7 of the Insolvency and Bankruptcy Code, 2016. The Applicant in the present case, State Bank of India (the Financial Creditor of the Corporate Debtor) filed an application...

Confusion Regarding The Jurisdiction Of NCLT Qua Personal Guarantor's Insolvency

The National Company Law Tribunals (NCLT) gained huge prominence after the enactment of the Insolvency and Bankruptcy Code, 2016 (Code/IBC), and became an epicenter ajudications of commercial laws across the country. As per Section 63 of the Code, it is the only judicial forum that has the jurisdiction to deal with the insolvency resolution process of a company and even the High Courts were cautioned by the Supreme Court in the case of Ghanashyam Mishra& Sons (P) Ltd. v. Edelweiss...

Section 9 IBC- Limitation Does Not Commence When The Debt Becomes Due But Only When A Default Occurs: Supreme Court

The Supreme Court has held that limitation does not commence when the debt becomes due but only when a default occurs.The bench comprising Justices DY Chandrachud, Surya Kant and Vikram Nath that the debt is defined in Insolvency and Bankruptcy Code as the non-payment of the debt by the corporate debtor when it has become due. In this case, the appellant placed orders with the Proprietary Concern, which was the supplier of Thorn Lighting India Private Limited through three purchase...

Insolvency Application Must Meet Threshold As Per Amended S.4 IBC, Though Notice U/S 8 Was Issued Pre-Amendment : Kerala High Court

The High Court of Kerala in a Bench comprising of Justice T.R. Ravi in the case of M/s Tharakan Web Innovations Pvt. Ltd. v.National Company Law Tribunal & Ors. held that the litmus test is whether the default exists as defined in amended Section 4 of the Insolvency and Bankruptcy Code w.e.f. 24.3.2020, increasing the default amount from Rs. 1 Lakh to Rs. 1 Crore, on the date of the application, and not on the date when the notice was sent to the Corporate Debtor u/s 8 of the Code. ...

Imposition Of Moratorium Under IBC Does Not Bar Complaints Against Natural Persons: Madras High Court

The Madras High Court in a Bench comprising of Justice N. Sathish Kumar in M/s. Nag Leather Pvt. Ltd. v. M/s. Muzain Hides held that as long as a moratorium under Section 14 of the Insolvency and Bankruptcy Code is imposed, proceedings under Section 138/141 of the Negotiable Instruments Act cannot be initiated against the Corporate Debtor. These proceedings, however, can be initiated against natural persons as mentioned in Section 141. Section 14 imposes a moratorium, prohibiting suits...

Principle Of Stare Decisis Applies To NCLT As Well As NCLAT. NCLAT

The NCLAT in a Bench comprising of Justice Ashok Bhushan, Justice Jarat Kumar Jain and Dr. Alok Srivastava in the case of Rajeev R. Jain, Director (Suspended) v. AASAN Corporate Solutions Pvt. Ltd. held that the principle of stare decisis is applicable both to NCLT as well as NCLAT. Factual Background- The Appellant challenged the order of the NCLT, Mumbai Bench which admitted the Section 7 application under the Insolvency and Bankruptcy Code, 2016 filed by the Respondent who is a ...

NCLT Mumbai Dismisses Application U/S 9, IBC On The Ground Of Existence Of A Principal-Agent Relationship Between The Parties

The NCLT Mumbai Bench comprising of Justice H.V. Subba Rao (Judicial Member) and Mr. Chandra Bhan Singh (Technical Member) in THG Publishing Pvt. Ltd. v. Deadline Advertising Pvt. Ltd. dismissed the application filed u/s 9 of the Code to initiate CIRP, which was filed by the Operational Creditor, THG Publishing Pvt. Ltd. on the ground that the debt due to it did not qualify as an Operational Debt u/s 5(8) and is not a default u/s 3(12) of the Code since there existed a 'principal-agent'...

Upon 'Supersession' Of Directors Under RBI Act, They Are Not Entitled To Notice Of CoC Meeting: NCLAT

The NCLAT in a Bench comprising of Justice M. Venugopal (Judicial Member), Mr. V.P. Singh and Dr. Ashok Kumar Mishra (Technical Members) in Dheeraj Wadhawan v. The Administrator, Dewan Housing Finance Corporation Ltd. held that there exists a difference between 'supersession of Directors' under the RBI Act and 'suspension of Directors' under the IBC and that a 'Superseded director' who vacated office on supersession of Board under the RBI Act is not entitled to the notice of CoC meeting...