IBC
Sale Of Secured Assets Completed Before Filing Of Insolvency Application Can't Be Invalidated By Moratorium: NCLAT New Delhi
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that assets lawfully sold in an auction prior to filing of an insolvency application under section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be included in the debtors' estate or protected by moratorium under section 96 of the IBC. A Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) dismissed the appeal filed by Maria Kuresh Rajkotwala, upholding the an order...
Resignation as Director Doesn't Relieve Guarantor of Personal Guarantee Obligations: NCLAT
The National Company Law Appellate Tribunal at Delhi recently observed that a resignation from directorship does not absolve a person from obligations arising under a personal guarantee agreement. The tribunal held that a personal guarantee, once executed as a continuing obligation, remains binding even after the guarantor steps down from the company's board. A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra passed the order on October 29, upholding the...
Termination Of Contract During CIRP For Performance Default Not Covered By Moratorium: NCLAT New Delhi
The National Company Law Appellate Tribunal (NCLAT) New Delhi held that termination of a contract based on long performance defaults does not violate section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC). A Bench comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) dismissed the appeal filed by Mr. Pradeep Upadhyay, Liquidator of M/s Dugal Associates Pvt. Ltd., against Bhadohi Industrial Development Authority (BIDA), upholding the order of the NCLT,...
One-Time Settlement Proposal Made After Expiry Of Limitation Does Not Extend Period U/S 18 Of Limitation Act: NCLT Indore
The National Company Law Tribunal (NCLT), Indore Bench, has held that the one-time settlement (OTS) proposal submitted after the expiry of the limitation period doesn't extend the limitation period under section 18 of the Limitation Act, 1963. The bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta observed that if a party makes an acknowledgment in terms of Section 18 beyond the period of limitation, then such a case would not be covered by Section...
NCLT Mumbai Clears Reliance Retail's Consumer Brands Restructuring Plan
The National Company Law Tribunal (NCLT) at Mumbai has approved Reliance Retail's plan to reorganize its consumer products business. The move will shift the group's fast-moving consumer goods and brands division into a new arm called Reliance Consumer Products Limited, giving the business its own management and focus. In an order passed on November 6, a coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed that there was no impediment in sanctioning the...
Personal Guarantors Cannot Misuse Insolvency Process To Defeat Creditor Recovery: NCLT Chennai
The National Company Law Tribunal (NCLT), Chennai, has recently ruled that personal guarantors cannot misuse the insolvency process to delay or obstruct legitimate recovery actions by creditors. In an order passed on October 10 by a coram of Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy, the tribunal noted that the Interim Resolution Professional (IRP) had “mechanically recommended” acceptance of the personal guarantor's application without considering his...
'Callous': NCLAT Pulls Up NCLT For Ignoring MCA Communication On Removal Of Promoter's Disqualification
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench set aside an order passed by the National Company Law Tribunal (NCLT) by which it had declared promoters of JC World Hospitality Pvt. Ltd. ineligible under section 29A of the Insolvency and Bankruptcy Code, 2016 (IBC) and quashed their resolution plan. The Bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that the NCLT had erred in declaring the promoters ineligible without appreciating...
Liability Of Personal Guarantor Arises Only Upon Demand Made In Accordance With Guarantee Deed: NCLT Hyderabad
The National Company Law Tribunal (NCLT), Hyderabad Bench-II, has recently ruled that the liability of the personal guarantor to the corporate debtor arises only upon a valid demand being made in strict accordance with the terms of the guarantee deed. The bench of Rajeev Bhardwaj (Member-Judicial) and Yogendra Kumar Singh (Member-Technical) observed that, “Rule 3(1)(e) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal...
Leasehold Rights Vest With Corporate Debtor Upon Amalgamation: NCLAT Upholds Inclusion Of WBHIDCO Land In Concast Steels' Liquidation Estate
The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld the inclusion of leasehold land allotted by West Bengal Housing Infrastructure Development Corporation Ltd. (WBHIDCO) to Concast Ispat Ltd. (CIL) in the liquidation estate of Concast Steel and Power Ltd. (CSPL), thereby dismissing WBHIDCO's appeal and affirming that the transfer of the leased land was made with its 'implied consent'. A bench of Justice Mohd. Faiz Alam Khan (Judicial Member) and Technical Member...
Failure To Submit Final Plan Or Participate In Challenge Process Bars Unsuccessful Bidder From Questioning Approved Plan: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench dismissed an appeal filed by Ganga Construction Consortium, an unsuccessful resolution applicant, challenging the approval of resolution plan submitted by Manglam Multiplex Pvt. Ltd. in the Corporate Insolvency Resolution Process (CIRP) of Varutha Developers Pvt. Ltd. A Bench comprising Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that the Appellant having failed to submit the final resolution plan...
Liquidator Cannot Conduct Private Sale Without Prior NCLT Approval: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that Liquidator cannot conduct a private sale without the permission of the National Company Law Tribunal (NCLT) as mandated under Regulation 33(2)(d) of the IBBI (Liquidation Process) Regulations, 2016 (LPR). The Bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) dismissed appeals filed by Orissa Alloy Steel Pvt. Ltd. (OASPL) and S.M. Steels and Power Ltd. (SMSPL) arising from a common...
NCLT Delhi Sanctions Maruti Suzuki's Merger With Suzuki Motor Gujarat
The Principal Bench of the National Company Law Tribunal on Thursday approved the merger of Maruti Suzuki India Limited with its wholly owned subsidiary, Suzuki Motor Gujarat Private Limited. The coram, comprising President Justice Ramalingam Sudhakar and Technical Member Ravindra Chaturvedi, noted that there was no impediment to approving the scheme, given the positions taken by the relevant statutory authorities.“In light of the foregoing facts and discussion, particularly the positions...