IBC
NCLAT Rejects Odisha GST's ₹740 Crore Claim, Holding That Second Appeal U/S 42 IBC Is Not Maintainable: NCLAT Chennai
The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has considered the issue of whether the GST department could file a second appeal u/s 42 of the IBC without rectifying defects in the first appeal. The bench observed that a second appeal u/s 42 of the IBC is not maintainable if the defects in the first appeal have not been rectified. Brief Background The corporate...
Upfront Payment Payable By Corporate Debtor With Interest On Breach Of Agreement Terms Amounts To Financial Debt U/S 5(8) Of IBC: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that disbursement of upfront payment to the corporate debtor to enable it to purchase refinish products along with a condition that the amount would be paid with interest at the rate of 12% per annum if the corporate debtor failed to purchase the products worth Rs. 1 crore over four...
Corporate Debtor Can't Avoid Repayment Obligations On Ground Of Irregularities U/S 186 Of Companies Act In Disbursing Loan: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the Corporate Debtor cannot avoid its obligation to repay the debt on the ground that section 186 of the Companies Act was not followed while disbursing the loan. The aim of this provision is to protect the shareholders, not to shield the corporate debtor from its repayment ...
Govt Authority Can't Seek Status Of Secured Operational Creditor Based On Dues Arising From HPGST Or CGST Acts: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that GST dues arising from the Himachal Pradesh Goods and Services Tax Act (HPGST) and Central Goods and Services Tax (CGST) cannot be given precedence over other dues under the Insolvency Proceedings. Therefore, based on such dues, the government authority cannot seek the status of a secured...
No Judicial Determination Required In RP's Examination Of Personal Guarantor Insolvency Applications: NCLAT Chennai
The National Company Appellate Tribunal (NCLT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that the process of examining an insolvency application against a personal guarantor by the Resolution Professional u/s 97 does not involve any judicial determination. Hence, the directions issued under the provision are not appealable under section 61 of the IBC. Background of the Case The appeal arises out of...
[S.66 IBC] NCLAT Upholds NCLT's Order Directing Corporate Debtor To Restore ₹3.18 Crore Generated From Fraudulent Transactions
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that once transactions are declared fraudulent under section 66 of the Insolvency and Bankruptcy Code, 2016 (IBC), the Adjudicating Authority can pass an appropriate order directing the restoration of the demonstrated loss to the assets of the corporate debtor. The present appeal has...
Conduct Of Litigant Can't Be Considered Bonafide When Fresh Order Is Challenged In Re-Filed Appeal After Curing Defects: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that the conduct of the litigant cannot be considered bona fide when an appeal, re-filed after rectification of defects, challenges a new order different from the one challenged in the original appeal. Therefore, the benefit under Section 14 of the Limitation Act cannot be granted to exclude the...
Liability Of Corporate Debtor Not Discharged By Release Of Guarantors' Liability If Bank Preserves Right To Proceed Under IBC: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the liability of the Corporate Debtor is not discharged merely because the guarantors were released from their liabilities by the Bank after One time settlement (OTS) especially when the Bank had preserved its right to proceed against the Corporate Debtor under the Insolvency and...
Govt Cannot Maintain Attachment Of Property To Press For Recovery Outside Liquidation Framework: NCLAT Chennai
The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has addressed the conflict between a secured creditor's statutory attachment under the Tamil Nadu Revenue Act, 1864, and the liquidation process under the IBC, 2016. The tribunal held that the government's attachment of the corporate debtor's property for recovery of tax dues cannot continue during liquidation. The bench...
Bankrupt Can File Application For Discharge After One Year, If Bankruptcy Trustee Fails To Do So: NCLAT New Delhi
The National Company Law Appellate Tribunal, Delhi held that when the Bankruptcy Trustee does not fulfil its statutory obligation under Section 138(1)(a) of the Insolvency and Bankruptcy Code, 2016, which requires the Trustee to apply for a discharge order after expiry of one year from the bankruptcy commencement date, the Bankrupt who is directly affected by continuance of the bankruptcy proceedings, can't be denied the right to approach the Adjudicating Authority and seek discharge. ...
Application U/S 7 Of IBC Withdrawn After Settlement Agreement Can Be Revived If Settlement Terms Are Breached By Corporate Debtor: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that the right of the financial creditor to seek revival of the original application filed under Section 7 of the Code cannot be taken away merely because a settlement agreement was reached, if the corporate debtor failed to comply with the terms of the settlement agreement. The present appeal...
Belated Claims Of Homebuyers Can't Be Rejected If Their Units Are Reflected In Corporate Debtor's Records: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that claims filed by homebuyers cannot be rejected merely for being filed beyond the stipulated time period, if the homebuyer's unit is reflected in the list of homebuyers who had not filed their claims on time. The Corporate Insolvency Resolution Process (CIRP) started against the corporate debtor on 11.08.2023. The Appellant...