Resignation From Directorship Does Not Discharge Personal Guarantor From Liability Under Continuing Guarantee: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that once a personal guarantee is executed, the resignation from the directorship does not discharge the guarantor from liability, particularly when the guarantee is a continuing one, unless it has been expressly revoked. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “we are therefore of the considered view that the Adjudicating Authority has rightly concluded that simply because the...

NCLT Rejects Sterling Biotech's Plea To Reclaim Pune Land From Sterling Healthcare

The National Company Law Tribunal (NCLT) at Mumbai on Friday rejected an application filed by Sterling Biotech Ltd (SBL) seeking possession of an industrial plot in Pune leased to Sterling Healthcare Ltd (SHL), which is currently under insolvency proceedings.The dispute related to a 29-year lease executed in 2008 for land located at Village Urse in Pune district. A coram comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar held that SBL could not recover the...

Suspended Directors Are Not Entitled To Access Valuation Reports Rejected By CoC: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that suspended directors are not entitled to access valuation reports rejected by Committee of Creditors (CoC), since such documents were confidential and not relied upon in the resolution process. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “when only the fresh valuation reports were germane for the insolvency resolution of the Corporate Debtor which had already been shared while...

CCI Has No Power to Investigate Disputes Concerning Abuse Of Patents: NCLAT

The National Company Law Appellate Tribunal (NCLAT) on Thursday reaffirmed that the Competition Commission of India (CCI) has no authority to investigate disputes involving the exercise of patent rights, holding that such matters fall exclusively under the Patents Act, 1970.The tribunal said that when a product is protected by a patent, issues related to its pricing or licensing must be addressed under patent law and not under competition law. A coram of Judicial Member Justice Yogesh Khanna...

GLAS Trust Moves Supreme Court Against NCLAT Order Allowing Aakash to Proceed wth Rights Issue

GLAS Trust Company LLC, a US-based lender to embattled ed-tech Byju's (Think & Learn Pvt. Ltd.), has moved the Supreme Court challenging the National Company Law Appellate Tribunal's (NCLAT) order that refused to stay Aakash Educational Services Ltd.'s Extra Ordinary Meeting to approve rights issue.The lender, which represents Byju's largest creditors, has sought an immediate halt to the fundraising exercise, arguing that it could dilute Byju's 25.41% stake in the coaching subsidiary. The...

Burden To Prove Ownership Of Assets Lies On Claimant; Liquidator Not Required To Establish Title To Assets In His Custody: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi upheld an order passed by National Company Law Tribunal (NCLT) allowing liquidators to remove moveable assets from the leased premises owned by Reliance Realty Limited (RRL) and restraining RRL from obstructing access to such assets. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “when the Liquidator took control and possession of the goods/assets lying in the leased premises, this was also ...

Company's Worth Is Irrelevant For Initiating Insolvency If Debt & Default Are Established: NCLAT New Delhi

The Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member-technical), has held that the company's worth is irrelevant for initiating insolvency if debt and default are established. The appeal was filed against the admission of the Section 7 application filed by the Axis Bank against the corporate debtor for debt and default of Rs. 16,95,95,909. Contention of the Parties The appellant, a corporate debtor, argued...

NCLT Mumbai Orders Insolvency Of Kute Group's Tirumalla Agro Industries

The National Company Law Tribunal (NCLT), Mumbai Bench-VI, has admitted the section 9 IBC petition filed by Aryatech Platforms Pvt. Ltd. against Tirumalla Agro Industries (Unit Company of Kute Group). Tirumalla Agro becomes the second entity in the conglomerate to face the insolvency. The group is already stumbling from a Rs. 2500 Cr. co-operative society fraud scandal, and its founders are already in jail. The promoters Suresh Kute and his wife Archana Kute are accused of diverting an...

Delhi High Court Upholds Liability Of Company To Reimburse Official Liquidator's Security Expenses For Safeguarding Corporate Assets

A division bench of the Delhi High Court, comprising Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar, has upheld the liability of a company to reimburse the official liquidator's security expenses for safeguarding corporate assets. Background of the Case The winding-up process of the appellant company (M/s Connoisseur Buildtech Pvt. Ltd.) was going on in the year 2016. A disputed plot of the company was there in Greater Noida, which was secured by the official...

NCLT Approves Demerger Of Hindustan Unilever's Ice Cream Business Into Kwality Wall's

The National Company Law Tribunal on Thursday approved the demerger of Hindustan Unilever Limited's ice cream business into its wholly owned subsidiary, Kwality Wall's (India) Limited.The scheme will create a separate, independently listed ice cream company and is part of the global restructuring plan of HUL's parent company, Unilever PLC. The scheme was approved by a coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar. As per the order, the demerger will take...

Appeal Against Dismissal Of Contempt Petition By NCLT Not Maintainable: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently held that an appeal against dismissal of a contempt petition by the National Company Law Tribunal (NCLT) is not maintainable before the Appellate Tribunal under Section 19 of the Contempt of Courts Act, 1971. A coram comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain ruled that such an appeal would lie only against an order imposing punishment for contempt, not against a...

Gujarat High Court Approves One-Time Ex-Gratia Payment For Company-Paid Staff Of Official Liquidator's Office

The Gujarat High Court has approved a one-time ex-gratia welfare payment to 12 company-paid staff employed under the office of the official liquidator. “The welfare measure of a one-time ex-gratia payment is justified in equity provided that it doesn't prejudice the entitlement of stakeholders in liquidation proceedings,” Hon'ble Mrs. Justice Mauna M. Bhatt. Background The official liquidator filed the report seeking the High Court's direction to invest ex-gratia amounts from...