IBC
NCLT Mumbai Admits Kishore Biyani-Led Future Consumer Into CIRP Over ₹263.77 Crore Default
The Mumbai Bench of the National Company Law Tribunal on Wednesday admitted Kishore Biyani-led Future Consumer Ltd into the Corporate Insolvency Resolution Process (CIRP) on a petition filed by Resurgent India Special Situations Fund. The tribunal found that the company had defaulted on a financial debt, with acknowledged outstanding dues of ₹263.77 crore. A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the requirements for initiating CIRP had been...
NCLT Mumbai Sets Aside MIDC's Cancellation Of Plot Allotments To Jet Airways, Directs Lease Execution
The tribunal held that Jet Airways' rights under the long-term lease formed part of the liquidation estate and could not be excluded as mere contractual rights to use the land
NCLT Mumbai Rejects ₹4.43 Cr Section 9 Plea, Holds Pre Existing Dispute Over Part Of Debt Sufficient
The Mumbai Bench of the National Company Law Tribunal (NCLT) on 30 June held that a pre existing dispute raised before issuance of a demand notice can defeat a Section 9 application under the Insolvency and Bankruptcy Code (IBC), even if the dispute relates only to a part of the operational debt, unless the disputed amount is wholly insignificant. Judicial Member Nilesh Sharma and Technical Member Sameer Kakar rejected Lumens Technologies Pvt Ltd's Section 9 petition seeking initiation of the...
NCLT Ahmedabad Holds Mere Breach Claims Cannot Defeat CIRP, Admits ₹2.02 Cr. Plea Against Mehsana Dairy
The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 26 June held that a corporate debtor cannot defeat an insolvency petition by raising contractual disputes that are unsupported by contemporaneous evidence. Judicial Member Shammi Khan and Technical Member Sanjeev Sharma admitted an insolvency petition filed by Mehsana Food Tradelinkers Pvt. Ltd. against Mehsana Dairy and Food Products Ltd. under the Insolvency and Bankruptcy Code, 2016 (IBC) for an operational debt of Rs. 2.02...
Director's Resignation Did Not Discharge His Liability Under Deed Of Guarantee In Technofab Case: NCLAT
The National Company Law Appellate Tribunal (NCLAT) in Delhi has upheld the initiation of personal insolvency proceedings against a former director of Technofab Engineering Limited, holding that under the terms of the deed of guarantee executed in the case, his resignation from the company did not discharge him from liability. The tribunal also held that the subsequent renewal of State Bank of India's credit facilities did not amount to a variation. A bench of Judicial Member Justice N....
NCLT Kochi Rejects Insolvency Plea Against BPL, Finds It Was Attempt To Recover Arbitral Award Dues
The National Company Law Tribunal (NCLT) at Kochi has recently dismissed an insolvency plea against consumer electronics company BPL Limited. It held that the Insolvency and Bankruptcy Code (IBC) cannot be invoked as an additional or parallel mechanism to recover the balance amount under an arbitral award after a creditor has already pursued execution proceedings. The tribunal observed, "the present proceedings are essentially an attempt to recover the balance amount claimed under the Award...
Cooperative Society's Statutory Charge Survives Liquidation, Enforceable Against Auction Purchaser: NCLT Mumbai
The Mumbai Bench of the National Company Law Tribunal (NCLT) has held that a cooperative society can enforce its statutory first charge over a property against an auction purchaser even after participating in the liquidation process by filing its claim before the liquidator. A bench of Judicial Member Ashish Kalia and Technical Member Charanjeet Singh Gulati observed that participation in the liquidation process does not extinguish the statutory charge created under the Maharashtra Co-operative...
NCLT Mumbai Rejects 4B Networks Resolution Plan Over Clause Giving SRA Exclusive Rights To PUFE Recoveries
The Mumbai Bench of the National Company Law Tribunal has rejected the resolution plan submitted by Armaan Sunil Kothari for 4B Networks Pvt Ltd. It held that the plan wrongly allowed the successful resolution applicant (SRA) to exclusively retain recoveries from pending Preferential, Undervalued, Fraudulent and Extortionate (PUFE) proceedings, including one seeking recovery of about ₹7,349 crore. The tribunal granted liberty to the resolution professional (RP) and the committee of creditors...
Expeditious Resolution Under IBC Cannot Override Natural Justice: NCLAT
The National Company Law Appellate Tribunal (NCLAT) in Delhi has held that the objective of speedy insolvency resolution under the Insolvency and Bankruptcy Code cannot come at the cost of fairness, setting aside an order that had closed a corporate debtor's right to file its reply in a pending insolvency case.A bench of Judicial Member Justice N. Seshasayee and Technical Member Indevar Pandey observed: “The objective of the Code is undoubtedly expeditious resolution. However, such expeditious...
Separate Legal Personality Can't Shield Related Party From Disclosing Information on Corporate Debtor: NCLAT
The National Company Law Appellate Tribunal (NCLAT) has held that a related party cannot rely on its separate legal personality to refuse disclosure of financial information sought by a Resolution Professional where the information has a direct nexus with the corporate debtor's transactions and arrangements. A coram of Judicial Member Justice N. Seshasayee and Technical Members Indevar Pandey and Arun Baroka observed,“Separate legal personality cannot become a shield against disclosure,...
Statutory Authorities Not Exempt From CIRP Timelines: NCLT Mumbai Rejects EPFO's Delayed Claim
The Mumbai Bench of the National Company Law Tribunal refused to condone a 400-day delay by the Employees' Provident Fund Organisation (EPFO) in filing its claim in the corporate insolvency resolution process (CIRP) of Sovika Aviation Services Pvt Ltd. The tribunal held that the statutory authority had failed to provide any convincing explanation for the delay. It observed that permitting the claim after the Committee of Creditors (CoC) had approved the resolution plan would unsettle the...
'Shylockian System' Of Lending Cannot Be Permitted To Misuse IBC For Debt Recovery: NCLT Kochi
The National Company Law Tribunal (NCLT) at Kochi has refused to admit an insolvency plea against NCS Autocars Private Limited, holding that a "shylockian system" of lending involving advance deduction of interest cannot be permitted to misuse the Insolvency and Bankruptcy Code (IBC). The tribunal found that the proceedings bore the characteristics of a debt recovery action rather than a bona fide insolvency proceeding. A coram of Judicial Member Vinay Goel and Technical Member Ravichandran...