NCLT Mumbai Initiates Personal Guarantor Insolvency Proceedings Against Anil Ambani On SBI Plea

Industrialist Anil Ambani has been admitted to personal insolvency proceedings by the Mumbai Bench of the National Company Law Tribunal on an application filed by State Bank of India over guarantees furnished for loans extended to Reliance Communications Ltd (RCOM) and Reliance Infratel Ltd (RITL), involving a default of ₹853.25 crore. A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar admitted SBI's application after accepting the Resolution Professional's...

Secured Creditor Cannot Be Compelled To Issue NOC For Sale Of Secured Assets: NCLT Bengaluru

The National Company Law Tribunal (NCLT) at Bengaluru has recently held that a secured creditor cannot be compelled to issue a No Objection Certificate (NOC) for the sale of secured assets merely because the corporate debtor proposes an alternative mechanism for repayment of its dues. The tribunal dismissed an application filed by Gulam Mustafa Enterprises Pvt Ltd seeking directions to Piramal Finance Ltd to issue NOCs for sale of certain mortgaged assets. A bench of Judicial Member Sunil...

NCLT Ahmedabad Admits CIRP Against Areli Commerce, Rejects Financial Hardship Defence In S.7 Case

On 10 June, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) initiated the Corporate Insolvency Resolution Process (CIRP) against Areli Commerce Pvt. Ltd., holding that financial hardship, liquidity constraints and market conditions cannot be used to defeat a Section 7 petition once debt and default are established. Judicial Member Shammi Khan and Technical Member Sanjeev Sharma rejected the corporate debtor's defence and admitted the petition filed by Standard Capital Markets...

Rejection Of Personal Guarantor's Repayment Plan By CoC Has Same Effect As Tribunal Rejection: NCLT Indore

The Indore bench of the National Company Law Tribunal (NCLT) has observed that rejection of a repayment plan by the Committee of Creditors (CoC) has the same effect as rejection of the plan by the adjudicating authority, while rejecting a personal guarantor's repayment plan after it was voted down by creditors. A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta observed: “It is pertinent to note that the rejection of the Repayment Plan by the Committee of...

NCLT Chandigarh Admits Primezone Developers To CIRP, Treats Plot Allottee Payments As Financial Debt

On 5 June, the Chandigarh Bench of the National Company Law Tribunal (NCLT) admitted Primezone Developers Pvt. Ltd. to the Corporate Insolvency Resolution Process (CIRP), holding that payments made by plot allottees constitute financial debt under the Insolvency and Bankruptcy Code. Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal admitted the Section 7 petition filed by the allottees and initiated CIRP against the corporate debtor. The Bench held: “The Corporate Debtor...

NCLT Bengaluru Dismisses Netambit's Insolvency Plea Against Flipkart, Finds Pre-Existing Dispute

The National Company Law Tribunal (NCLT) at Bengaluru has dismissed an insolvency petition filed by Netambit Value First Services Pvt Ltd against Flipkart Internet Private Limited, holding that the material on record disclosed the existence of a pre-existing dispute between the parties.A coram of Judicial Member Mahendra Khandelwal and Technical Member Ravindra Chaturvedi observed that the dispute had been raised even before the issuance of the statutory demand notice. The Bench observed:“In our...

Bombay High Court Quashes Awards Against Guarantors Despite IBC Moratorium On Debt

The Bombay High Court on Tuesday held that arbitral awards resulting in enforcement of a debt that has become temporarily unenforceable due to a statutory moratorium run contrary to the fundamental policy of Indian law. The court consequently quashed two awards obtained by Abhyudaya Co-operative Bank against guarantors of insolvency resolution bound Nirmangold Alloys Pvt. Ltd. and Nirmangold Plasttech Pvt Ltd. Justice Sharmila U. Deshmukh held that the arbitral tribunal continued proceedings...

Kerala High Court Dismisses Writ Against NCLT New Delhi Insolvency Proceedings, Cites No Jurisdiction

On 25 May, the Kerala High Court held that it cannot entertain a writ petition challenging insolvency proceedings initiated before the National Company Law Tribunal (NCLT), New Delhi, against a personal guarantor merely because the underlying credit facilities were availed in Kerala, since territorial jurisdiction under the Insolvency and Bankruptcy Code depends on the location of the corporate debtor's registered office. Justice Harisankar V Menon dismissed a writ petition filed by a personal...

Can Litigants Circumvent IBC Limitation By Filing Defective Appeals? Supreme Court's Answer Is A Resounding 'No'

The Supreme Court has recently held that litigants cannot circumvent the Insolvency and Bankruptcy Code's strict limitation regime by filing defective appeals to save the limitation and curing defects later at their convenience. A bench of Justices Dipankar Datta and Satish Chandra Sharma posed the following question: “Can or should a litigant be permitted to circumvent the rigours of limitation by filing a defective appeal as a device to save limitation and, thereafter, to opt to cure the...

NCLT Chandigarh Issues Notice To Gridlogic Games On PhonePe's ₹3.93 Crore Insolvency Plea

The Chandigarh Bench of the National Company Law Tribunal (NCLT) has issued notice to Gridlogic Games Private Limited on an insolvency application filed by PhonePe Limited over alleged unpaid dues of ₹3.93 crore for promotional services rendered on its platform. The order was passed by Judicial Member K. Biswal and Technical Member K.K. Singh. While issuing notice and granting Gridlogic three days to file its reply, the bench declined a request for any further extension of time. In doing so,...

Flipkart Faces Fresh Insolvency Plea Before NCLT Bengaluru Over ₹1.69 Crore Marketing Services Dues

The National Company Law Tribunal at Bengaluru has issued notice to Flipkart Internet Private Limited on a plea filed by Applabs Media Private Limited seeking initiation of insolvency proceedings over an alleged operational debt of ₹1.69 crore.A coram of Judicial Member Mahendra Khandelwal and Technical Member Radhakrishna Sreepada passed the order. According to the operational creditor, the debt arises from three invoices amounting to ₹1.69 crores raised under a Marketing Agreement dated...

Bombay HC Orders Release Of MPID-Attached Property After Approval Of Steel Company's Resolution Plan

The Bombay High Court has held that there could be no impediment to releasing a property attached under the Maharashtra Protection of Interest of Depositors (MPID) Act after the corporate debtor's resolution plan was approved. The court held that the company was entitled to proceed on a "clean slate" under the Insolvency and Bankruptcy Code (IBC). A Division Bench of Justices Manish Pitale and Shreeram V. Shirsat quashed a March 19, 2016 MPID attachment insofar as it related to a property...