Financial Creditor Can Amend Date Of Default Even If Pleadings Are Closed: NCLT Mumbai

The National Company Law Tribunal, Mumbai, comprising Nilesh Sharma (Member-Judicial) and Sameer Kakar (Member-Technical), has allowed an application filed by the financial creditor, seeking amendment in the pleadings to correct the date of default. The issue before the tribunal was whether a financial creditor can amend its pleading to change the date of default in a Section 7 application if the pleadings have been declared complete. Background Axis Bank Limited filed an...

Dissolution Under IBC Can't Be Used To Frustrate Ongoing PMLA Proceedings: NCLT Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Bachu Venkat Balaram Das and Dr. Sanjeev Ranjan (Technical Member) rejected an application seeking dissolution of M/s Shakti Bhog Snacks Limited under Section 54 of the Insolvency and Bankruptcy Code, 2016. The Tribunal held: “Dissolution under Section 54 of the IBC results in the Corporate Debtor ceasing to exist as a legal entity. Such a consequence would inevitably frustrate the ongoing criminal prosecution under the...

NCLAT Declares Transactions Fraudulent U/S 66 Of IBC Due To Corporate Debtor's Failure To Diligently Negotiate One-Sided Clause In MOU

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that a complete surrender on the part of the corporate debtor to negotiate the terms of the Memorandum of Understanding, by which the property from the Respondent was to be purchased, and agreeing to a one side clause that empowers the Respondent to unilaterally terminate the agreement and...

Single Whatsapp Message Raising General Dispute Can't Become Foundation To Reject Petition U/S 9 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 a single WhatsApp message sent long ago cannot serve as the foundation to dispute an entire series of transactions, especially when no specific invoices—forming the foundation of the petition under Section 9 of the Code—have been contested. Therefore, the petition cannot be rejected...

Viability Of Corporate Debtor Can't Be Considered While Deciding Petition U/S 7 Of IBC Once Debt & Default Are Established: 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 an application under section 7 of the Insolvency and Bankruptcy Code, 2016 cannot be rejected solely on the ground that the corporate debtor is a viable entity and that initiating insolvency proceedings would adversely affect the stakeholders.The Adjudicating Authority has no discretion to consider whether the Application...

IBC Monthly Digest: May 2025

Nominal Index: Riju Ravindran Versus Pankaj Srivastava, C.A. No. 6613 of 2025 TATA STEEL LTD Versus Raj Kumar Banerjee & Ors., 2025 LiveLaw (SC) 542 Kalyani Transco Versus M/s Bhushan Steel and Power Ltd and connected appeals, C.A. No. 1808 of 2020 VISA COKE LIMITED Versus M/s MESCO KALINGA STEEL LIMITED, 2025 LiveLaw (SC) 505 NCLT Advocates Bar Association & Ors. Versus Union of India & Ors., MAT 469 of 2025 Elecon Engineering Company Limited Versus M/s Inox...

Limitation Period For Filing Application U/S 95 Of IBC Against Personal Guarantor Stands Extended By Acknowledgement Of Debt: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the limitation period for filing an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 (“the Code”) by a creditor against a personal guarantor, stands extended upon a valid acknowledgment of debt made by the principal borrower. The Tribunal held that ...

Registration Of Security Interest With CERSAI Is Sufficient To Claim Status Of Secured Financial Creditor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that security interest can be proved through its registration with Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) and the financial creditor can be classified as a Secured Creditor based on such registration as per Regulation 21 of the...

Litigants Are Not Trained Advocates, Restoration Application Can't Be Dismissed Due To Counsel's Failure To Inform Of Proceedings: 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 restoration application under Rule 48(2) of the National Company Law Tribunal (NCLT) Rules, 2016 cannot be dismissed if the application is filed within 30 days from the date of dismissal of the original petition. In the present case, the petition under section 7 of the...

Mere Execution Of Restructuring Agreement Does Not Extinguish Corporate Debtor's Liability When Restructuring Scheme Is Not Approved By NCLT: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that the mere signing of a Master Restructuring Agreement, wherein a third party undertakes to discharge the liabilities of the Corporate Debtor, does not result in the extinguishment of the Corporate Debtor's obligations if the restructuring subsequently fails. It cannot be presumed that liabilities have been transferred solely due...

Continued Reflection Of Debt In Balance Sheet Amounts To Acknowledgement U/S 18 Of Limitation Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that a default in repayment obligations is said to occur when the debt is continuously reflected in the Corporate Debtor's balance sheets over an extended period, particularly when no fresh borrowing was undertaken during that time. In such circumstances, the continued inclusion of the liability...

Liquidation Of Corporate Debtor Can Be Ordered If Successful Resolution Applicant Cannot Obtain Necessary Approvals Within One Year: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that when a successful resolution applicant fails to obtain all necessary approvals within one year from the date of approval of the resolution plan— as mandated under Section 31(4) of the Insolvency and Bankruptcy Code, 2016—liquidation of the corporate debtor must follow as a necessary...