IBC
NCLT Mumbai Admits IIFL Home Finance Insolvency Plea Against J-Seventy One Properties Over ₹2.42 Crore Default
The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted an insolvency plea filed by IIFL Home Finance Ltd. against J-Seventy One Properties and Pictures Pvt. Ltd. after finding that the company owed a financial debt of about ₹2.42 crore and had remained in default. Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the financial debt and the continuing default were established through documentary evidence. "In view of the above, the Applicant has...
Commercial Wisdom Of Creditors No Bar To Judicial Scrutiny Of IRP Remuneration: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that disputes over an interim resolution professional's remuneration are not immune from judicial scrutiny merely because they arise from a decision of the Committee of Creditors (CoC). Clarifying the scope of the Supreme Court's ruling in K. Sashidhar, the tribunal held that the judgment, which concerns judicial review of the CoC's commercial decisions on resolution plans, could not be relied upon to decide...
NCLAT Sets Aside Rejection Of Insolvency Plea After Finding Corporate Debtor Had Admitted Outstanding Dues
The National Company Law Appellate Tribunal (NCLAT) at Delhi has set aside an order rejecting an insolvency application after finding that the corporate debtor had admitted outstanding dues in its reply to the statutory demand notice. The tribunal also found that the corporate debtor could not later adopt a contrary stand during the proceedings. "The litigant cannot be permitted to approbate and reprobate," it observed. A bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical...
Debenture Trustee Can Initiate Insolvency Against Personal Guarantor Under IBC Section 95: NCLAT Delhi
The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 30 June held that a debenture trustee, acting under a debenture trust deed and personal guarantee, can initiate insolvency proceedings against a personal guarantor under Section 95 of the Insolvency and Bankruptcy Code, 2016, and that clerical defects in guarantee documents do not defeat such proceedings where liability is otherwise established. Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra...
Settlement Breach Before CIRP Admission Cannot Sustain Section 9 Insolvency Proceedings: NCLT New Delhi
The New Delhi National Company Law Tribunal (NCLT) has held that once parties enter into a settlement agreement before admission of a Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016, any subsequent default arising from such settlement does not give rise to an “operational debt” and cannot sustain insolvency proceedings.A Bench comprising Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh noted that such disputed...
Patient Privacy Can't Bar RP's Access To Hospital Management System: NCLT Indore
The National Company Law Tribunal (NCLT) in Indore has ruled that suspended directors of a hospital undergoing insolvency proceedings cannot deny a resolution professional access to its Hospital Management System by citing patient-data privacy. It held that such access is necessary for the resolution professional to discharge statutory duties during the corporate insolvency resolution process. A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta passed the...
Monitoring Committee Cannot Override Fee Caps In Approved Resolution Plan: NCLT Bengaluru
The Bengaluru Bench of the National Company Law Tribunal (NCLT) on 22 June held that a Monitoring Committee cannot override or modify fee caps prescribed under an approved resolution plan through internal arrangements or mutual consent. Judicial Member Radhakrishna Sreepada and Technical Member Sunil Kumar Aggarwal partly allowed an application filed by Padmanabhan Nair against Successful Resolution Applicant (SRA) Pulkit Agarwal arising out of the implementation of the resolution plan of Trell...
Property Over Which Corporate Debtor Has No Subsisting Right Cannot Form Part Of Its CIRP: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that a corporate debtor cannot include in its Corporate Insolvency Resolution Process (CIRP) an immovable property over which it has no subsisting legal right. Setting aside an order of the National Company Law Tribunal (NCLT), Kolkata, the appellate tribunal allowed Calcutta Pinjrapole Society's plea to exclude its property from the CIRP of R.S. Iron Industries Pvt. Ltd. A bench of Chairperson Justice Ashok...
Settlement Restructuring Payment Timelines Does Not Change Nature Of Operational Debt: NCLT Chennai
The National Company Law Tribunal (NCLT) at Chennai has held that a settlement agreement that merely restructures repayment or acknowledges an existing liability does not extinguish or alter the original character of the debt. A tribunal comprising Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam observed that simply renegotiating a payment timeline does not create a completely new and independent debt. “Under Indian law, a settlement agreement that merely restructures...
NCLAT Delhi Holds Fraudulent Account Transfer Not Financial Debt Under IBC, Dismisses Progfin's Appeal
The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 30 June held that the mere disbursal of loan funds into a fraudulent bank account does not, by itself, create a binding financial debt under the Insolvency and Bankruptcy Code, 2016. Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra dismissed Progfin Pvt. Ltd.'s appeal and upheld the National Company Law Tribunal's rejection of its Section 7 application against Ganesh Benzoplast Ltd. (GBL). The Bench...
Pending Civil Suits Cannot Be Dismissed Merely Because Insolvency Proceedings Begin Later: Calcutta High Court
The Calcutta High Court has recently held that a civil suit filed before insolvency proceedings are initiated cannot be dismissed merely because proceedings under the Insolvency and Bankruptcy Code (IBC) begin later. It observed that the law protects the insolvency process from interference but does not automatically bar civil courts from hearing pending suits. A division bench of Justice Debangsu Basak and Justice Md. Shabbar Rashidi delivered the ruling while setting aside a commercial...