IBC
Liability Of Personal Guarantor Arises Only Upon Demand Made In Accordance With Guarantee Deed: NCLT Hyderabad
The National Company Law Tribunal (NCLT), Hyderabad Bench-II, has recently ruled that the liability of the personal guarantor to the corporate debtor arises only upon a valid demand being made in strict accordance with the terms of the guarantee deed. The bench of Rajeev Bhardwaj (Member-Judicial) and Yogendra Kumar Singh (Member-Technical) observed that, “Rule 3(1)(e) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal...
Leasehold Rights Vest With Corporate Debtor Upon Amalgamation: NCLAT Upholds Inclusion Of WBHIDCO Land In Concast Steels' Liquidation Estate
The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld the inclusion of leasehold land allotted by West Bengal Housing Infrastructure Development Corporation Ltd. (WBHIDCO) to Concast Ispat Ltd. (CIL) in the liquidation estate of Concast Steel and Power Ltd. (CSPL), thereby dismissing WBHIDCO's appeal and affirming that the transfer of the leased land was made with its 'implied consent'. A bench of Justice Mohd. Faiz Alam Khan (Judicial Member) and Technical Member...
Failure To Submit Final Plan Or Participate In Challenge Process Bars Unsuccessful Bidder From Questioning Approved Plan: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench dismissed an appeal filed by Ganga Construction Consortium, an unsuccessful resolution applicant, challenging the approval of resolution plan submitted by Manglam Multiplex Pvt. Ltd. in the Corporate Insolvency Resolution Process (CIRP) of Varutha Developers Pvt. Ltd. A Bench comprising Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that the Appellant having failed to submit the final resolution plan...
Liquidator Cannot Conduct Private Sale Without Prior NCLT Approval: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that Liquidator cannot conduct a private sale without the permission of the National Company Law Tribunal (NCLT) as mandated under Regulation 33(2)(d) of the IBBI (Liquidation Process) Regulations, 2016 (LPR). The Bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) dismissed appeals filed by Orissa Alloy Steel Pvt. Ltd. (OASPL) and S.M. Steels and Power Ltd. (SMSPL) arising from a common...
NCLT Delhi Sanctions Maruti Suzuki's Merger With Suzuki Motor Gujarat
The Principal Bench of the National Company Law Tribunal on Thursday approved the merger of Maruti Suzuki India Limited with its wholly owned subsidiary, Suzuki Motor Gujarat Private Limited. The coram, comprising President Justice Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi, noted that there was no impediment to approving the scheme, given the positions taken by the relevant statutory authorities.“In light of the foregoing facts and discussion, particularly the positions...
Advances Made By Shareholder After Lapse Of Shareholders Agreement Amount To 'Financial Debt': NCLT Mumbai
The National Company Law Tribunal (NCLT), Mumbai Bench, has admitted a Section 7 application filed by Euro Corporate Services Pvt. Ltd. against Royal Fantasy Constructions Pvt. Ltd. The bench comprising Judicial Member Sushil Mahadeorao Kochey and Member Technical Prabhat Singh has ruled that the advances made by the shareholder after the expiration of the shareholder agreement amount to a financial debt under Section 5(8) of the IBC, 2016. The section 7 application was filed by...
Timeline For Filing Bankruptcy Application Under IBC Is Directory, Not Mandatory: NCLT Kochi
The NCLT, Kochi Bench, comprising Vinay Goel (Member-Judicial) and Madhu Sinha (Member-Technical), has held that the three-month period for filing bankruptcy applications against personal guarantors under Section 121(2) IBC, 2016, is directory and not mandatory. Kerala Financial Corporation filed the application under section 123 of the IBC, 2016, seeking bankruptcy proceedings against personal guarantors. The application was filed with a delay of over 266 days past the statutory window...
NCLT Mumbai Rejects Financial Creditor's Plea To Revise Vote On Reliance Broadcast Resolution Plan
The National Company Law Tribunal (NCLT) at Mumbai on Thursday rejected an application by Authum Investment and Infrastructure Limited (which acquired the claim from Reliance Commercial Finance Limited) to revise its vote from No to Yes on the approved resolution plan for Reliance Broadcast Network Limited.A coram of Judicial Member Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati refused RCFL's plea on the ground that the voting cannot be altered once the process is...
Interim Finance Is Financial Debt Requiring 66% CoC Approval; NCLT Cannot Direct Contribution Without Such Approval: NCLT Mumbai
The National Company Law Tribunal (NCLT), Mumbai Bench, has recently held that the interim finance constitutes financial debt under the provisions of the IBC, 2016, and can only be raised with the approval of at least 66% of the Committee of Creditors (CoC). The tribunal held that “the term contribution is not defined in the code; hence, the contribution is nothing else but interim finance, which can be raised only with 66% voting by the CoC in compliance with the provisions of Section...
Debtors Not Exempt From Insolvency For Defaults Occurring Before Covid-19 Suspension Period: NCLAT New Delhi
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench upheld the initiation of Corporate Insolvency Resolution Process (CIRP) against Majestic Hotels Limited holding that defaults occurred before COVID-19 suspension period are not protected by section 10A of the Insolvency and Bankruptcy Code, 2016 (IBC) even if payments were to be made during the suspension period. A bench comprising Justice Ashok Bhushan and Mr. Indevar Pandey (Technical Member) dismissed an appeal filed...
Fraud Not Barred By Time: NCLAT Upholds Director's Liability To Contribute ₹8.71 Crore To Corporate Debtor's Assets Obtained Through Fraud
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench upheld the suspended director's liability to restore the amount of Rs. 8.71 crore obtained through fraudulent transactions to the corporate debtor's assets holding that the manner in which the director engineered the transaction clearly amounted to conducting the business with intent to defraud the creditors under section 66 of the IBC. A bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that...
Justice Ashok Bhushan Appointed As NCLAT Chairperson For Second Term
The Central Government has approved the re-appointment of Justice Ashok Bhushan, former Judge of the Supreme Court of India, as Chairperson of the National Company Law Appellate Tribunal (NCLAT). The re-appointment will be effective from the date he assumes charge and will continue until he attains the age of 70 years, i.e., till July 4, 2026.Justice Bhushan was earlier appointed as the NCLAT Chairperson on October 29, 2021, shortly after his retirement from the Supreme Court, and took charge on...