Subsequent Shareholding Changes Cannot Retrospectively Cleanse Related-Party Status: NCLT Chandigarh

The Chandigarh bench of the National Company Law Tribunal (NCLT) has recently ruled that a subsequent change in shareholding or directorship cannot retrospectively erase a company's related-party status for transactions entered into earlier. Dismissing an application filed by Mona Portfolio Ltd., the court held that the company had failed to establish that its claim against Chandigarh Overseas Pvt. Ltd. was a financial debt.The bench of Judicial Member Khetrabasi Biswal and Technical Member...

NCLT Ahmedabad Rejects Insolvency Plea Against Manpasand Beverages Over Time-Barred ₹34.40 Cr Claim

The Ahmedabad National Company Law Tribunal (NCLT) on 14 July dismissed the insolvency application filed by Do Well Moulds against Manpasand Beverages Ltd., holding that the claim was time-barred and involved pre-existing disputes regarding the genuineness of the transactions. A Bench comprising Judicial Member Chitra Hankare and Technical Member Dr. VG Venkata Chalapathy noted that an insolvency application cannot be admitted where the claim is barred by limitation, disputed prior to the...

NCLT Ahmedabad Rejects Machino Polymers' Plea To Revise Claim In Sintex-BAPL Ltd Insolvency Case

The Ahmedabad National Company Law Tribunal (NCLT) on 2 July held that an approved Resolution Plan cannot be modified to revise admitted claims after the conclusion of the Corporate Insolvency Resolution Process (CIRP), as it attains finality and binds all stakeholders. A Bench comprising Judicial Member Shammi Khan and Technical Member Sanjeev Sharma dismissed an application filed by Machino Polymers Limited seeking revision of its admitted claim against Sintex-BAPL Ltd., holding that no...

KSEB Cannot Demand Previous Owner's Power Dues From Auction Purchaser: Kerala High Court

The Kerala High Court on Tuesday held that the Kerala State Electricity Board (KSEB) cannot insist that an auction purchaser of the assets of a company in liquidation clear the previous consumer's electricity arrears as a condition for obtaining a fresh electricity connection.A Division Bench of Justice A.K. Jayasankaran Nambiar and Justice Preeta A.K. ruled that the Electricity Act, 2003, the Kerala Electricity Supply Code, 2005; and the KSEB Terms and Conditions of Supply, 2005 do not...

NCLT Chennai Admits Insolvency Plea Against Pradhin Limited Over ₹12.98 Crore Default

The National Company Law Tribunal (NCLT) at Chennai has admitted an insolvency petition against Pradhin Limited after finding that the financial creditor had established the existence of a financial debt and default of ₹12.98 crore. The shares of Pradhin Limited are listed on Bombay Stock Exchange Limited. The tribunal initiated the Corporate Insolvency Resolution Process against the company and appointed Rajesh Jasti as the interim resolution professional.A coram of Judicial Member Sanjiv Jain...

Forensic Audit Report Alone Cannot Prove Fraudulent Trading Under IBC Section 66: NCLT Ahmedabad

The Ahmedabad National Company Law Tribunal (NCLT) on 13 July held that a forensic audit report cannot, by itself, establish fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code, 2016 (IBC), unless the Resolution Professional independently examines the transactions and forms the statutory opinion required under Regulation 35A of the CIRP Regulations. A Bench of Judicial Member Chitra Hankare and Technical Member Dr VG Venkata Chalapathy rejected the liquidator's application...

NCLT Ahmedabad Holds Consortium Lender Cannot Defeat Co-Creditor's Charge, Rejects SBI's Mortgage Release

The Ahmedabad National Company Law Tribunal (NCLT) on 13 July held that a consortium lender cannot unilaterally release a mortgaged property under a One Time Settlement (OTS) if such release prejudices the pari passu security interest of another secured creditor. A Bench comprising Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy allowed the application and directed the suspended management of Baid Industries to restore Rs. 5,14,24,288 along with 12% simple...

Separate Corporate Debtors' Defaults Cannot Be Combined To Meet ₹1 Crore IBC Threshold: NCLT Mumbai

The Mumbai National Company Law Tribunal (NCLT) on 7 July held that a financial creditor cannot aggregate defaults owed by different corporate debtors to meet the minimum default threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016 (IBC), even if the entities belong to the same corporate group. A Bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar dismissed an insolvency application filed by Mr. R. Srikant Ayyer against Neogreen Agriculture LLP after...

IBC Moratorium Applies Only To Corporate Debtor, Not Directors Or Promoters: Supreme Court

The Supreme Court on Monday held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016, operates only against the corporate debtor. It ruled that courts or adjudicating authorities cannot enlarge its scope to cover directors, promoters, subsidiary companies, personal guarantors or any other persons unless the statute expressly provides so.The court observed that the scope of the moratorium is statutory and must remain confined to what Section 14 contemplates.A bench of...

NCLT Delhi Rejects Elite Design's ₹1.43 Cr Insolvency Plea Against Colorbar Over Pre-Existing Dispute

The New Delhi National Company Law Tribunal (NCLT) on 21 July held that an insolvency petition cannot be admitted when the Corporate Debtor establishes a genuine pre-existing dispute supported by substantial material. A Bench comprising Judicial Member Ashok Kumar Bhardwaj and Technical Member Banwari Lal Meena dismissed the insolvency petition filed by Elite Design Private Limited against Colorbar Cosmetics Private Limited, holding that the dispute raised by the latter was not a sham defence....

NCLT Ahmedabad Dismisses Jindal's Insolvency Plea Against Kunal Structure For Failing IBC Threshold

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 17 July dismissed the insolvency application filed by Jindal (India) Limited against Kunal Structure (India) Private Limited, holding that disputes regarding short-weight and LC charges reduced the undisputed claim below the statutory threshold of 1 crore. A Bench comprising Judicial Member Chithra Hankare and Technical Member Dr VG Venkata Chalapathy held: “The matter of dispute being marginal, it falls below the threshold...

Impleadment Plea Can't Be Rejected Because Locus Standi Was Challenged Before It: NCLT Bengaluru

The National Company Law Tribunal (NCLT), Bengaluru Bench, has held that an impleadment application cannot be rejected merely because it was filed after an objection to the petitioner's locus standi. "The scope of consideration in an application under Order I Rule 10(2) CPC is not confined to examining whether a party strengthens the case of the Applicant but for the tribunal to assess whether the presence of such party is necessary for complete, effective and final adjudication of the...