Absence Of Formal Written Agreement Does Not Preclude Establishment Of Financial Debt: NCLT Delhi

The National Company Law Tribunal Bench of Shri Mahendra Khandelwal (Judicial Member) and Shri Atul Chaturvedi (Technical Member) the absence of a formal loan agreement does not defeat the existence of a financial debt. Documentary evidence such as tax filings (Form 26AS), TDS deductions, ledger entries, financial statements, and written acknowledgments are sufficient to establish a Financial Debt under Section 5(8) of the Insolvency & Bankruptcy Code, 2016. Background Facts: The...

Merely Extending Financial Assistance Can't Be Considered As Loan In Absence Of A Loan Agreement: NCLT Delhi

The National Company Law Tribunal Bench of Shri Mahendra Khandelwal (Judicial Member) and Shri Atul Chaturvedi (Technical Member) dismissed a Section 7 application filed under the Insolvency & Bankruptcy Code, 2016 (“the code”) holding that merely providing financial assistance can't be construed as a short-term or long-term loan in the absence of a formal loan agreement. Background Facts: In May 2019, the Corporate Debtor approached the Financial Creditor seeking a borrowing of...

Suspended Management Cannot Disburse Funds Of Corporate Debtor Post-CIRP Commencement Without Authorisation Of IRP: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) have held that after commencement of Corporate Insolvency Resolution Process (CIRP) once moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC) kicks in, no person can unilaterally recover any amount from the account of the Corporate Debtor. The Tribunal held that the suspended...

Corporate Insolvency And Bankruptcy Laws Bar Association Requests Operationalisation Of Second Bench At NCLAT Chennai

The Corporate Insolvency and Bankruptcy Laws Bar Association, established to promote the study and advancement of corporate, insolvency, bankruptcy, economic, and allied laws, has submitted a representation to the Hon'ble Chairperson of the NCLAT on May 28, 2025, seeking the early constitution of a second bench at NCLAT, Chennai. They stated that On 25.01.2019, in Swiss Ribbons v. Union of India, 2018 the Supreme Court recorded the undertaking given by the Union of India for “setting up...

Non-Payment Of Outstanding Lease Rent Amounts To Operational Debt: Nclt Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Mahendra Khandelwal (Judicial Member) and Shri Atul Chaturvedi (Technical Member) held that when the lease amount is unpaid by the Corporate Debtor it amounts to Operational Debt under the Insolvency & Bankruptcy Code, 2016 (“the Code”). Background Facts: M/s Unified Credit Solutions Private Limited (Operational Creditor) had it's office at 7th Floor, 715, DLF Star Tower, Sector- 30, NH-8, Gurugram, Haryana 122001....

Byju's Insolvency : Supreme Court Issues Notice On Riju Ravindran's Plea Against NCLAT Mandating CoC Nod For CIRP Withdrawal

The Supreme Court recently issued notice on an appeal challenging the National Company Law Appellate Tribunal (NCLAT) judgment holding that the application for withdrawal of the Corporate Insolvency Resolution Process (CIRP) of Think and Learn Pvt Ltd (trade name Byju's) needed approval from 90 percent of the Committee of Creditors. A bench of Justice Vikram Nath and Justice Sanjay Kumar stated that the prayer for interim relief would be considered on the next date of hearing, 21 July 2025. The...

Corporate Applicant Can't Take Shield Of CIRP To Avoid Legally Recoverable Government Dues: NCLT Delhi

The National Company Law Tribunal Bench of Shri Mahendra Khandelwal (Judicial Member) and Shri Atul Chaturvedi (Technical Member) dismissed a Section 10 application filed under the Insolvency & Bankruptcy Code, 2016 (“the code”) holding that the Corporate Applicant cannot take the shield of CIRP to avoid the legally recoverable government dues. Background Facts: M/s Imperial Banquets & Dining Private Limited ('Corporate Applicant') was set up in the form of a Special Purpose ...

Liquidated Damages Clause Does Not Permit Automatic Recovery Of Full Amount, Actual Loss Must Be Proven: Delhi High Court

The Delhi High Court bench of Justice Manoj Kumar Ohri has held that the law mandates proof of actual loss despite the presence of an Liquidated Damages (LD) clause and does not allow automatic recovery of the entire LD amount upon breach. Therefore, the Petitioner's unilateral adjustment without adjudication was unlawful. The AT rightly held that such unilateral recovery does not obviate the need for proper adjudication of the LD claim.Brief Facts:The impugned award arose from Contract...

Limitation Act Applies To Proceedings Under Interest On Delayed Payments To Small Scale & Ancillary Industrial Undertakings Act: Telangana High Court

The Telangana High Court bench of Justice P. Sam Koshy and Justice N. Tukaramji have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The Court clarified that the overriding effect under Section 10 of the 1993 Act applies only to the express provisions of that Act and does not exclude the applicability of the Limitation Act in the absence of any...

NCLAT Upholds Admission Of CIRP Against Pushp Ratna Realty

The National Company Law Appellate Tribunal (NCLAT), New Dehi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) have upheld the admission of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Pushp Ratna Realty Pvt. Ltd. The Tribunal also upheld the rejection of a settlement proposal made by the Appellant-Jayshree Agnihotri, noting that the Committee of Creditors (CoC), composed of homebuyers,...

Demand Notice Sent To Wrong Address Invalidates Insolvency Petition: NCLT Hyderabad

The National Company Law Tribunal Hyderabad Bench of Shri. Rajeev Bhardwaj (Judicial Member) and Shri Sanjay Puri (Technical Member) dismissed a petition filed under Section 9 of the Insolvency & Bankruptcy code (“the Code”), holding that if demand notice u/s 8 of the code is not sent to the correct address, it does not meet the mandatory requirements of law. Background Facts: M/s Anurada Chemicals (“Operational Creditor”) is a chemical manufacturing company primarily engaged in...

S. 13(2) SARFAESI Act Notice Demanding Payment From Guarantor Constitutes Invocation Of Personal Guarantee: NCLAT Delhi

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) held that where a Section 13(2) notice explicitly demands payment from the guarantor in terms of the guarantee agreement, it amounts to an invocation of the personal guarantee. Background Facts: M/s Surana Metacast (India) Private Limited (Principal Borrower) had taken loan from state bank of India for...