Director Communications Can't Replace Documentary Proof For Establishment Of Loan: NCLT Delhi

The National Company law Tribunal Delhi bench of Shri Manni Sankariah Shanmuga Sundaram And Shri Atul Chaturvedi Dismissed a section 7 petition for initiation of Corporate Insolvency Resolution process, holding that communications from the directors of the Corporate Debtor cannot override the lack of substantive documentary proof such as audited financials, books of accounts, or banking records for establishment of loan. The Financial creditor, Altitude Finvest Limited filed an...

CoC Has Discretion To Allow Resolution Applicant To Submit Revised Plan If Its Name Appears In Final Resolution Applicant List: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that the committee of creditors (CoC) has discretion to allow the Resolution Applicant to submit a revised plan to maximise the value of the corporate debtor's assets if the Resolution Applicant's name appears in the final RA list. The present appeal has been filed against an order passed by the National Company Law Tribunal (NCLT) Mumbai. By the ...

Approval Of Resolution Plan Can't Be Interfered With Over 'NIL' Payment To Operational Creditors If Claims Have Been Properly Dealt With: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that since current legislative scheme does not mandate payment to Operational Creditors in event of the corporate debtor's liquidation, the Adjudicating Authority cannot interfere with the Resolution Plan approved by Committee of Creditors with 100% voting shares and in which the claims of the Operational Creditors have been properly dealt with. ...

In Absence Of Crystallised Debt Due To Dispute Over Quality Of Product Supplied, Petition U/S 9 Can't Be Admitted: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that when debt is not crystallized due to repeated communication on Whatsapp between the parties over the quality of the product supplied by the Operational Creditor and the defects acknowledged by the Supplier, an application under section 9 of the IBC cannot be accepted. The present appeal has been filed under section 61 of the Insolvency and...

Corporate Debtor's Shareholdings Are An Integral Part Of Financial Assets, Can't Be Excluded From Valuation Report: NCLT Bengaluru

The National Company Law Tribunal (NCLT), Bengaluru Bench of Shri Sunil Kumar Aggarwal (Judicial Member) and Shri Radhakrishna Sreepada (Technical Member) the has held that the shareholdings of the corporate debtor in its subsidiaries form an integral part of its financial assets therefore cannot be excluded from the valuation reports. Such exclusion of the financial assets compromise the fairness and integrity of the CIRP. The present applicant has been filed seeking fresh...

Required Percentage For Passing Resolution Must Be Calculated Based On Voting Shares Of All Creditors, Not Just Those Present & Voting: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that the required percentage of 66% as mandated under the Insolvency and Bankruptcy Code, 2016 (IBC) for passing a resolution by the Committee of Creditors cannot be counted merely based on voting shares of the creditors who are present and voting but voting shares of the all the creditors including absentees must be counted. The present two...

No Direction Pertaining To Fees & Expenses Of Resolution Professional Can Be Passed Prior To Adjudication Of S.99 Report: NCLT Delhi

The National Company Law Tribunal Delhi allowed applications filed by the Central Bank of India seeking replacement of Resolution Professional for failure of submission of report as per section 99 of the Insolvency & Bankruptcy Code, 2016 and demanding fees before adjudication of the report. The bench of Shri Manni Sankariah Shanmuga Sundaram and Shri Atul Chaturvedi held that “any directions pertaining to the fees and expenses of the resolution professional, prior to adjudication...

Sale Of Corporate Debtor's Assets Can't Be Allowed At Reserve Price Reduced Beyond 25% As It Violates Liquidation Regulations: NCLT Bengaluru

The National Company Law Tribunal (NCLT), Bengaluru Bench of Shri. Sunil Kumar Aggarwal (Judicial Member) and Shri. Radhakrishna Sreepada (Technical Member) has held that the sale of the Corporate Debtor's assets cannot be allowed at a reserve price reduced beyond the 25% threshold, as it would violate Schedule I of the Liquidation Regulations. This cannot be done by the Adjudicating Authority even by exercising its powers under section 60(5) of the IBC as it would amount to creating a...

Changing Incorrect Date Of Default Is Permitted Before Final Adjudication If No New Cause Of Action Is Raised By Such Amendment: NCLT Amravati

The National Company Law Tribunal (NCLT), Amravati Bench of Shri Umesh Kumar Shukla (Technical Member) and Shri Kishore Vemulapalli (Judicial Member) held that a change in the incorrect date of default mentioned in the original petition can be allowed before final adjudication, provided it does not introduce a new cause of action and no prejudice is caused to the corporate debtor by such an amendment. The present application has been filed under section 60(5) of the Insolvency and...

After Initiation Of CIRP, There Can Be No Encumbrances On Corporate Debtor's Assets: NCLT Chennai

The National Company Law Tribunal (NCLT), Chennai Bench of Sanjiv Jain (Judicial Member) Shri. Ravichandran Ramasamy (Technical Member) has held that after the initiation of the Corporate Insolvency Resolution Process (CIRP), there can be no encumbrances on the assets of the corporate debtor, and all claims must be dealt with in accordance with Section 53 of the IBC. The present application has been filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking ...

Sale Of Corporate Debtor's Property Can't Be Declared Fraudulent Merely On Claim Of Security Interest Without Supporting Evidence: NCLT Kochi

The National Company Law Tribunal (NCLT), Kochi Bench of Shri. Vinay Goel (Judicial Member) and Smt. Madhu Sinha (Technical Member) has held that when the property of the Corporate Debtor is purchased in good faith by a bona fide purchaser, the mere fact that the sale price was slightly lower than the actual price does not bring the transaction within the ambit of a fraudulent transaction, especially when the sale is sought to be reversed on the ground that the property was charged in...

Ex-Parte Order Is Invalid Where Company Petition Is Renumbered After Restoration Without Informing Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that when a Company Petition is restored and assigned a different number, due to which the Corporate Debtor could not access the case and present its defence effectively, an ex-parte order cannot be passed in such circumstances. The Corporate Debtor should have been informed of the renumbering so it could present its defence. This appeal has been...