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...

Creditors Need Not Obtain Decree To File Claims Under Presidency Towns Insolvency Act: Bombay High Court

The Bombay High Court on Thursday held that a creditor does not need to obtain a decree before lodging a claim with the Official Assignee after a debtor is declared insolvent under the Presidency Towns Insolvency Act, 1909. It ruled that the Official Assignee must independently examine every claim and decide whether to admit or reject it by recording reasons in writing. Justice Jitendra Jain delivered the ruling while answering a reference on whether a creditor's claim must be supported by a...

Calcutta High Court Bars WBSEDCL From Seeking Pre-CIRP Late Surcharge From SRA For New Electricity Connection

The Calcutta High Court has recently held that West Bengal State Electricity Distribution Company Limited (WBSEDCL) could not insist that Pinax Paper Mills Private Limited pay pre-CIRP Late Payment Surcharge (LPSC) before granting a fresh electricity connection after approval of the company's resolution plan. Justice Ravi Krishan Kapur held that the successful resolution applicant was entitled to the benefit of the "clean slate" principle and that claims not forming part of the approved...

Developer's Insolvency Cannot Block Housing Society's Bid For Conveyance Of Land And Building: Bombay High Court

A housing society's application for deemed conveyance of land and building cannot be put on hold merely because insolvency proceedings are pending against a developer, the Bombay High Court has held. The court ruled that a moratorium under the Insolvency and Bankruptcy Code (IBC) does not prevent authorities from deciding such applications under the Maharashtra Ownership Flats Act (MOFA). Justice Sandeep V. Marne set aside an order that had rejected a deemed conveyance application filed by...

Orissa High Court Quashes Criminal Proceedings Against Ferro Alloys Over Pre-CIRP Environmental Law Violations

The Orissa High Court has recently quashed criminal proceedings against Ferro Alloys Corporation Ltd over alleged environmental law violations. It held that continuation of the prosecution was not sustainable as the violations happened before the insolvency resoulution. Justice Dr. Sanjeeb K. Panigrahi also noted that offences under Section 15 of the Environment (Protection) Act, 1986 have since been decriminalised. They have been replaced with a regime of civil penalties. “In the present...

Directions To NCLT For Urgent Listing Of Plea Cannot Be Issued In Writ Jurisdiction: Delhi High Court

The Delhi High Court has recently refused to issue directions to the National Company Law Tribunal (NCLT) for urgent listing of a homebuyer's transfer plea in an ongoing insolvency proceeding. The court observed that such directions cannot be issued in exercise of its writ jurisdiction. A vacation bench of Justice Tejas Karia dismissed a petition filed by homebuyer Anuj Goyal and imposed costs of ₹25,000, payable to the Delhi High Court Bar Clerks' Association within two weeks. “Such...

NCLT's Scrutiny Of Applicant's Standing To Invoke Personal Insolvency Process Is Not Adjudication: Karnataka HC

The Karnataka High Court has held that the National Company Law Tribunal (NCLT) is entitled to examine whether an applicant possesses the requisite locus standi to invoke the personal guarantor insolvency framework before permitting the process to proceed. The court held that such an exercise does not amount to an adjudication of the insolvency claim on merits. Justice Suraj Govindaraj observed: “Thus, when the National Company Law Tribunal examines whether an applicant possesses the...

Kerala High Court Dismisses Appeal Seeking CBI, ED, NIA Probe Into Byju's Insolvency

The Kerala High Court on Friday dismissed an appeal against a single judge's order refusing to direct a Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and National Investigation Agency (NIA) probe into alleged irregularities in the insolvency proceedings of Think and Learn Private Limited (Byju's). A division bench of Justice K Natarajan and Justice Johnson John held that the petitioners had already approached the Bengaluru police on the same allegations. The resulting...

Kerala High Court Dismisses Plea Seeking CBI, ED, NIA Probe Into Alleged Byju's Insolvency Irregularities

The Kerala High Court has recently dismissed a plea seeking a court-monitored investigation by the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), and National Investigation Agency (NIA) into allegations connected with the corporate insolvency resolution process of Think and Learn Private Limited (BYJU'S). Justice G. Girish observed that the plea was not maintainable because an earlier Public Interest Litigation seeking the same reliefs on the same cause of action had been...

NCLT Cannot Refuse Additional Objections Solely For Want Of Express Provision In IBC: Kerala High Court

The Kerala High Court has held that the National Company Law Tribunal (NCLT) can permit additional objections in insolvency proceedings. It cannot reject such requests on the ground that there is no provision under the Insolvency and Bankruptcy Code or the NCLT Rules to entertain them. Justice Harisankar V. Menon made the observation while allowing a petition filed by BPL Limited. The Court set aside an order of the NCLT, Kochi Bench, which had refused to entertain the company's additional...

Bombay High Court Quashes Awards Against Guarantors Despite IBC Moratorium On Debt

The Bombay High Court on Tuesday held that arbitral awards resulting in enforcement of a debt that has become temporarily unenforceable due to a statutory moratorium run contrary to the fundamental policy of Indian law. The court consequently quashed two awards obtained by Abhyudaya Co-operative Bank against guarantors of insolvency resolution bound Nirmangold Alloys Pvt. Ltd. and Nirmangold Plasttech Pvt Ltd. Justice Sharmila U. Deshmukh held that the arbitral tribunal continued proceedings...

Kerala High Court Dismisses Writ Against NCLT New Delhi Insolvency Proceedings, Cites No Jurisdiction

On 25 May, the Kerala High Court held that it cannot entertain a writ petition challenging insolvency proceedings initiated before the National Company Law Tribunal (NCLT), New Delhi, against a personal guarantor merely because the underlying credit facilities were availed in Kerala, since territorial jurisdiction under the Insolvency and Bankruptcy Code depends on the location of the corporate debtor's registered office. Justice Harisankar V Menon dismissed a writ petition filed by a personal...