IBC
Set-Off Of Transactions Executed Prior To Commencement Of CIRP Based On Arbitral Award Is Permissible During CIRP: NCLT New Delhi
The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Bachu Venkat Balaram Das (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that a set off of transactions based on arbitral award entered into prior to the commencement of the Corporate Insolvency Resolution Process (CIRP) is permissible even during the currency of the CIRP, and such set-offs are not barred by Section 14 of the IBC. The present application has been filed under section...
Fixed Deposit Receipts Form Part Of Corporate Debtor's Financial Assets, RP Can Seek Their Defreezing & Take Custody: NCLT New Delhi
The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Manni Sankariah Shanmuga Sundaram (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that Fixed Deposit Receipts (FDRs) form part of the Corporate Debtor's financial assets; therefore, the Resolution Professional can approach the concerned bank to seek their defreezing and realise them. The present application has been filed under section 60(5) of the Insolvency and Bankrutpcy Code,...
Resolution Professional Can't Cherry-Pick Entries From Financial Records Of Corporate Debtor While Verifying Claims Of Creditors: NCLT New Delhi
The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Manni Sankariah Shanmuga Sundaram (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that the Resolution Professional is obligated to verify the claims of creditors after considering all entries in the financial records of the corporate debtor. The RP cannot cherry-pick entries and reject others that favour the creditors, as such an approach violates the principles of fairness and...
90-Day Timeline Under Regulation 2B Of IBBI Regulations For Schemes Of Compromise/Arrangement Is Directory, Not Mandatory: NCLAT, Chennai
The National Company Law Appellate Tribunal (NCLAT) Chennai bench comprising Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) have held that the 90-day timeline prescribed under Regulation 2B(1) of the IBBI (Liquidation Process) Regulations, 2016 for completing a scheme of compromise or arrangement under Section 230 of the Companies Act, 2013 is directory and not mandatory. The Tribunal held that the statute does not create an absolute bar on...
DM Can Re-Execute Possession Orders U/S 14 Of SARFAESI Act After Illegal Re-Entry By Borrower: MP High Court
A division bench of Madhya Pradesh High Court, comprising Justice Anand Pathak and Justice Hirdesh, has allowed an appeal and upheld that a district magistrate can re-execute possession orders u/s 14 of the SARFAESI Act after illegal re-entry by the borrower. The Court directed the respondent authorities to provide necessary assistance to the petitioner to dispossess the borrower from the mortgaged property. Background of the Case The petitioner granted a certain mortgage loan...
Corporate Debtor May Be Permitted To Complete Project Under IRP's Supervision If A Structured Plan Is Proposed: NCLT Indore
The National Company Law Tribunal (NCLT), Indore Bench of Sh. Shammi Khan (Judicial Member) and Sh. Sanjeev Sharma (Technical Member) has held that while admitting a petition under Section 7 of the IBC filed by homebuyers based on the default committed by the corporate debtor, the corporate debtor can be directed to complete the project under the reverse Corporate Insolvency Resolution Process (CIRP) model, under the supervision of the Interim Resolution Professional, if a structured and...
Interest Claims Under MSMED Act Can't Be Added To Principal Amount: NCLT Mumbai
The National Company Law Tribunal (NCLT), Mumbai Bench of Justice V. G. Bisht (Retd.) (Judicial Member) and Sh. Prabhat Kumar (Technical Member) has held that since the NCLT under the IBC is not competent to adjudicate interest claims under the MSMED Act, such interest claims cannot be added to the principal amount to meet the threshold limit for filing an insolvency petition. The present application has been filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC)...
Property Alloted In Lieu Of Consultancy Fees Constitutes Financial Debt: NCLT Mumbai
The National Company Law Tribunal, Mumbai Bench, Court-V, comprising Sh. Sushil Mahadeorao Kochey (Member- Judicial) and Sh. Charanjeet Singh Gulati (Member- Technical), has held that a property allotted in lieu of consultancy fees can be considered as a financial debt. The application was filed requesting to issue a direction to the Resolution Professional to admit the claim filed by the applicant in the class of financial creditor. The applicant claimed that it provided income-tax...
Debt Arising From Structured Supply Chain Finance Facility Does Not Constitute 'Financial Debt' U/S 5(8) Of IBC: NCLT New Delhi
The National Company Law Tribunal, New Delhi Bench, Court-IV, comprising Shri Manni Sankariah Shanmuga Sundaram (Member-Judicial) and Shri Atul Chaturvedi (Member-Technical), has held that the debt arising out of a structured supply chain finance facility doesn't come under the ambit of financial debt u/s 5(8) of the IBC, 2016. The application was filed by Prudent Arc Limited to initiate CIRP of the corporate debtor for default of Rs. 3.17 Cr. The financial debt was assigned to the ...
Petition U/S 9 Of IBC Is Inadmissible Without Payment Received By Corporate Debtor In Subcontracted Work Done By Operational Creditor: NCLT Hyderabad
The National Company Law Tribunal (NCLT) Hyderabad bench of Sri Rajeev Bhardwaj (Hon'ble Judicial Member) and Sri Sanjay Puri (Hon'ble Member Technical) has held that in absence of any payment received by the Corporate Debtor in a subcontracted work executed by the Operational Creditor, application under section 9 of the IBC cannot be entertained. Filing such an application would be an attempt to use the IBC as a forum to recover the debt which is against the objectives of the IBC. The...
Adjudicating Authority Can Pass Order U/S 114 Of IBC Based On Resolution Professional's Report If No Repayment Plan Is Submitted: NCLT New Delhi
The National Company Law Tribunal (NCLT) New Delhi bench of Sh. Ashok Kumar Bhardwaj (Hon'ble Member (Judicial) and Sh. Man Mohan Gupta (Hon'ble Member Technical) has held that a meeting of the Committee of Creditors is not required to be summoned under Regulation 17A of the Personal Guarantors Regulations when no repayment is submitted by the Personal Guarantor. The Adjudicating Authority can pass an order based on the report submitted by the Resolution Professional under section 112 or...
DRT Cannot Reject Consolidated Plea By Tenants Under SARFAESI Act: Kerala High Court
The Kerala High Court has held that the Debts Recovery Tribunal (DRT) cannot reject a consolidated plea by tenants under the SARFAESI Act.The petition was filed, challenging an order passed by the registrar of the DRT 1, Ernakulam. By that order, it declined to register the application preferred by the petitioners against the notice of dispossession served by the Advocate Commissioner. The application was rejected, citing the reason that a consolidated securitisation application was filed...