IBC
Only Existing Members Of Company Can Seek Relief Against Oppression & Mismanagement: NCLAT Chennai
The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently ruled that only existing members of a company are entitled to seek relief for oppression and mismanagement under Section 244 of the Companies Act, 2013, even in so-called "exceptional circumstances."The tribunal set aside an order of the National Company Law Tribunal (NCLT), Chennai which had allowed two former members of the Madras Race Club to pursue such a claim.A coram of Justice Sharad Kumar Sharma and Technical...
No Provision Under Liquidation Process Regulations Permitting Acceptance Of Belated Claims: NCLT Allahabad
The NCLT, Allahabad Bench, comprising Praveen Gupta (Member-Judicial) and Ashish Verma (Member-Technical), has observed that unlike CIRP proceedings, there is no enabling provision under the liquidation process regulations permitting acceptance of belated claims. The liquidator rejected the claim filed by the applicant. Therefore, the appellant filed the present appeal challenging the rejection, under section 5 of the Limitation Act, 1963, read with Rule 11 of the NCLT Rules, 2016,...
ESI Amounts Are 'Trust Property', Not Part Of Corporate Debtor's Liquidation Estate: NCLAT New Delhi
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial), Justice Mohammad Faiz Alam Khan (Member-Judicial), and Naresh Salecha (Member-Technical), has held that the ESI amounts are the “trust property” and not part of the corporate debtor's liquidation estate. The appeal was filed by the Regional Director, ESI Corporation, against the decision of the adjudicating authority. The adjudicating authority by the...
Resolution Professional Not Entitled To Fees Or Expenses During Stay Of CIRP Proceedings: NCLT Bengaluru
The National Company Law Tribunal (NCLT), Bengaluru Bench, comprising Sunil Kumar Aggarwal (Member-Judicial) and Radhakrishna Sreepada (Member-Technical), has held that an IRP/RP is not entitled to fees or expenses incurred during the stay of CIRP proceedings granted by NCLAT or Judicial Forum. The CIRP of the corporate debtor was initiated in furtherance of a section 7 petition, and the applicant was appointed as the interim resolution professional. However, later on the CIRP was...
Assignment Of Tax Dues By GST Dept Doesn't Violate Article 265 Or GST Act If CIRP Has Been Initiated: NCLAT New Delhi
The NCLAT, Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial) and Mr. Naresh Salecha (Member-Technical), has held that the assignment of tax dues by the GST Department doesn't violate Article 265 or the GST Act if CIRP has been initiated. The corporate debtor was admitted into CIRP, and Ms. Dilip Mehta was appointed as the interim resolution professional, later confirmed as the resolution professional in furtherance to a section 10 application. The...
NCLAT Upholds Unilateral Set-Off In Commercial Transactions Based On Nominee Director's Signature On Financial Statements
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has upheld the unilateral set-off by the corporate debtor against a financial creditor, even when the term sheet excluded such set-off. The appellant filed a petition under section 7 of the IBC, seeking initiation of CIRP against the corporate debtor. It was the case of the appellant before the adjudicating authority that out of the...
Audit Report Is Not Conclusive Proof To Declare Commercial Transaction Fraudulent U/S 66(2) Of IBC: NCLAT New Delhi
The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Mohd. Faiz Alam Khan (Member-Judicial) and Arun Baroka (Member-Technical), has held that a transactional audit report alone cannot be conclusive proof of fraudulent trading under section 66 of the IBC, 2016. The CIRP of the corporate debtor was initiated, failing which the liquidation order was passed. The suspended director of the corporate debtor had some shares in two companies whose...
Committee Of Creditors Continues To Exist Till Resolution Plan Is Implemented Or Liquidation Order Is Passed : Supreme Court
In the JSW Steel matter, the Supreme Court held that the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016 (IBC) does not become functus officio merely upon the approval of a resolution plan by the Adjudicating Authority. The Court held that the CoC continues to have a role until the resolution plan is fully implemented or an order of liquidation is passed.A Bench comprising Chief Justice of India BR Gavai, Justice K Vinod Chandran and Justice NV Anjarai observed...
Moratorium Under IBC Does Not Prevent Reversal Of Funds Mistakenly Transferred To Corporate Debtor: NCLT New Delhi
The National Company Law Tribunal, New Delhi Bench, comprising Jyotsna Sharma (Member-Judicial) and Anu Jagmohan Singh (Member-Technical), has held that the moratorium under section 14 of the IBC doesn't prevent reversal of funds mistakenly transferred to the corporate debtor's account. The applicant claims that it mistakenly transferred the 'relevant funds' through RTGS. It also sent an email to the bank officials seeking reversal of the funds transferred. The Assistant General...
Supreme Court Upholds JSW Steel's Resolution Plan For Bhushan Power & Steel, Says JSW Can't Be Penalised For Reviving Loss-Making Entity
The Supreme Court today upheld the resolution plan of JSW Steel Ltd for Bhushan Power and Steel Ltd (BPSL) and rejected the objections raised by the ex-promoters and certain creditors of BPSL.Allowing the appeals after JSW has revived the loss-making entity by infusing huge amounts of funds will lead to "diastrous results", the Court said.A bench comprising Chief Justice of India BR Gavai, Justices SC Sharma and K Vinod Chandran had re-heard the appeals against the resolution plan after...
Invocation Of Guarantee Does Not Preclude Financial Creditor From Initiating CIRP: NCLT Kolkata
The National Company Law Tribunal (NCLT) Kolkata bench of Smt. Bidisha Banerjee (Judicial Member) and Cmde Siddharth Mishra (Technical Member) admitted a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against Vasupujya Enterprises Pvt. Ltd., a corporate guarantor of Ankit Metal & Power Ltd., holding that there is no bar under the IBC from simultaneously filing two applications under section 7 of the IBC against Borrower as well as the guarantor. The...
Resolution Professional Can Be Replaced U/S 60(5) IBC If He Deliberately Avoids Placing Agenda For His Replacement Before CoC: NCLAT
The NCLAT, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has held that Section 60(5) of the IBC can be invoked to replace a resolution professional (RP) if he deliberately avoids placing the agenda for his replacement before CoC The CIRP of the corporate debtor was initiated, and the appellant was appointed as the resolution professional. However, the financial creditor sought replacement of the appellant, citing the...