Creditors Belonging To Different Classes Can Be Given Different Treatment : NCLAT [Read Judgment]

The National Company Law Appellate Tribunal has reconfirmed the principle that the touchstone for judging the benevolence of a resolution plan does not depend upon the manner wherein differently placed creditors are treated therein. Resonating with the judgment passed recently by Supreme Court in the case titled, "Committee of Essar Steel v. Satish Kumar Gupta" passed on 15.11.2019, the NCLAT, in the Appeal titled as, "Pacific World Shipping Pvt. Ltd. v. Dadi Impex Pvt. Ltd.", bearing Company...

NCLAT Sets Aside Insolvency Proceedings Against Flipkart

The NCLAT has set aside an order passed by NCLT Bengaluru bench, for initiation of Corporate Insolvency Resolution Process (CIRP) filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code) against Flipkart.While allowing the appeal of the e - commerce giant, the court held that the choice of issuance of demand notice under Section 8(1) of Code does not provide for any discretion to the Operational Creditor to send the demand notice as per its convenience, either in Form 3 or Form 4...

NCLAT Hauls Unitech Ltd For Defaulting Payment To Deposit Holders [Read Order]

The National Company Law Appellate Tribunal has directed Unitech Limited, once India's second largest real estate investment company to repay the amount(s) to its deposit holders pendent lite along with future interest @ 12.5% p.a. from the date of maturity of the respective FDRs. It has also imposed cost of Rs.50,000/- to each of the deposit holders, setting aside the order of NCLT, New Delhi. Sunita Bansal had bought FDRs from Unitech Limited for a period of three years maturity in...

Mortgage By A Corporate Debtor To Secure Debts Of Third Party Not 'Financial Debt' Within Meaning Of Sec 5(8) IBC : SC [Read Judgment]

A person having only security interest over the assets of corporate debtor would stand outside the sect of 'financial creditors' as defined in Sec 5(7) &(8) IBC.

Does Issuance Of Moratorium Under IBC Bar Statutory Proceedings U/S 138 Of Negotiable Instruments Act? SC To Consider [Read Order]

A Supreme Court Bench of Justices U.U. Lalit & Aniruddha Bose on Monday issued Notice to Attorney General on a petition seeking a bar on proceedings instituted under section 138 of Negotiable Instruments Act, 1881 towards a Company on account of its declaration of insolvency. Relying on BSI Ltd. & Anr. Vs. Gift Holdings Pvt. Ltd. & Anr., Counsel appearing for the Petitioner (company) submitted that since a Division Bench of the National Company Law Tribunal (NCLT)...

Application For Withdrawal Is Not A Suit/ Proceeding/ Execution Within S. 14 Of IBC: Bombay HC [Read Judgment]

The Bombay High Court has held that an application made for withdrawal of an amount deposited with the court does not amount to a suit/ proceeding/ execution within Section 14 of the IBC and therefore, the party that deposited the amount cannot oppose such an application merely because it is undergoing moratorium. In his order, Justice G.S. Patel has clarified that such amount is considered to be placed beyond the reach of either party and therefore, it is not 'the property' of either...

SC Transfers Petition Challenging IBC Ordinance Before Delhi HC To Itself [Read Order]

The Supreme Court on Monday allowed the transfer of a petition challenging the constitutional validity of IBC (Amendment) Ordinance, 2019, from the Delhi High Court to itself. The petition titled KIC Food Products Pvt. Ltd. v. Union of India & Anr., WP (C) No. 310/2020, pending before the Delhi High Court, was the first case challenging the constitutional validity of IBC Ordinance, wherein additional condition of minimum 100 allottees or 10% of the total number of allottees under...

CIRP Against Real Estate Company Limited To Project Concerned And Will Not Affect Other Projects : NCLAT [Read Judgment]

The National Company Law Appellate Tribunal has held that an insolvency process against a real estate company will impact only the project concerned and not the other projects of the builder-developer."In CIRP against a real estate, if allottees or financial institutions, banks or operational creditors of one project initiated CIRP against the corporate debtor, it is confined to the particular project, it cannot affect any other projects of the same real estate company in other places where...

Dispute Raised To Application U/S 9 IBC Over Telephone Inadmissible: NCLT, Allahabad [Read Order]

In its recent order the Allahabad bench of the NCLT has decided that 'notice of dispute' to a claim under Section 9 of the Insolvency and Bankruptcy Code, 2016 is not admissible if made over a telephonic communication, not supported by phone records. The observations have been made in a company petition filed under Section 9 of the Code for initiation of Corporate Insolvency Resolution Process. While passing the order, the Tribunal observed that the corporate debtor had admitted...

Companies Act 2013: Time To Reboot?

The Finance Minister of India has one of the least enviable jobs in the country at the moment. With GDP growth on the decline and other macro-economic indicators not suggesting a quick recovery, Ms. Sitharaman has her task cut out. She is set to present the Union Budget for 2020 which is likely to face close scrutiny and will indicate the approach that the Modi government proposes to take to address the current, rather stubborn, economic downturn. While the economy has been the...

No IBC Provision That Resolution Plan Should Match Liquidation Value; Approved Resolution Plan Can't Be Withdrawn Under S12A : SC [Read Judgment]

The Supreme Court has held that there is no requirement under the Insolvency and Bankruptcy Code that the resolution plan should match the liquidation value of the corporate debtor.This was held by a bench comprising Justices R F Nariman and Aniruddha Bose in the case Maharashtra Seamless Ltd(MSL) v Padmanabhan Venkatesh and others.The bench was considering the legality of an order of the National Company Law Appellant Tribunal, by which the Resolution Applicant (MSL) was directed to modify the...

Feigning Dispute Under Insolvency & Bankruptcy Code

Insolvency and Bankruptcy Code, 2016 (I & B Code in short) which is a consolidated Act dealing with reorganisation and insolvency of corporate persons, partnership firms and individuals in a time bound manner with object of maximisiation of value of assets and protecting interest of all stake holders. A Financial creditor/s or Operational creditor may make an application for initiating corporate insolvency resolution process, if the minimum amount of default committed by the...