NCLAT Sets Aside NCLT Order Allowing Withdrawal Of CoC-Approved Resolution Plan

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently set aside an order of the NCLT Mumbai that allowed withdrawal of a resolution plan in the insolvency of TD Toll Road Pvt. Ltd., holding that the Committee of Creditors (CoC) had no authority to undo a plan once it had been approved and placed before the tribunal. Reaffirming the scheme of the Insolvency and Bankruptcy Code, the appellate tribunal said a resolution plan, once cleared by the CoC, binds both the creditors...

NCLAT Reserves Order On Vedanta's Plea Against Approval Of Adani's JAL Resolution Plan

The National Company Law Appellate Tribunal (NCLAT) on Wednesday reserved orders on Vedanta Limited's appeal challenging the approval of Adani Enterprises Limited's resolution plan for Jaiprakash Associates Limited, with Vedanta arguing that its higher bid was ignored despite offering the maximum value. Vedanta has challenged the March 17 order of the Allahabad bench of the National Company Law Tribunal, which approved Adani Enterprises' plan while rejecting Vedanta's proposal. Vedanta had...

NCLT Not Mere Counter Signatory, Can Reject CoC-Approved Resolution Plan Where CIRP Found 'Suspect': NCLAT

The National Company Law Appellate Tribunal (NCLAT) on Tuesday has held that an Adjudicating Authority is not bound to approve a resolution plan, even if it is approved by the Committee of Creditors, where the insolvency process itself raises concerns about its integrity. A bench of Judicial Member Justice N Seshasayee and Technical Member Arun Baroka observed, “An Adjudicating Authority is not a mere counter signatory to the CoC to lend its approval to a resolution plan, but a sentinel on the...

NCLAT Dismisses CIRP Plea Against A.G. Pipes, Says Debt Cannot Be Aggregated Across Distinct Legal Entities

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday dismissed an appeal filed by Bhushan Power & Steel Limited against A.G. Pipes Pvt. Ltd., holding that the operational debt attributable to the corporate debtor was below the Rs 1 crore threshold under the Insolvency and Bankruptcy Code (IBC) and that debts of separate legal entities cannot be combined to meet this limit. A bench of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka observed that most...

NCLAT Urges IBBI To Ensure Resolution Plans Don't Allow Re-Verification Of Claims By SRA

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday observed that the Insolvency and Bankruptcy Board of India (IBBI) should ensure that resolution plans do not ordinarily contain clauses allowing successful resolution applicants (SRAs) to re-verify claims, cautioning that such provisions create uncertainty in the insolvency process. The observation came in a case where a homebuyer's claim had been admitted in full during the corporate insolvency resolution process (CIRP),...

NCLAT Upholds Rejection Of CIRP Plea Against S Square Cargo, Excludes Invoice-Based Interest From Debt

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently upheld the dismissal of a Section 9 CIRP application filed by Shivani Enterprises against S Square Cargo Movers Pvt. Ltd. It held that the interest component reflected in the invoices was not mutually agreed between the parties and could not be included in the operational debt. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra held: "When the payment of interest is not found to have been...

NCLAT Refuses To Halt Carnival Techno Park CIRP, Says Fraud Plea Cannot Reopen Finding Of Default

The National Company Law Appellate Tribunal (NCLAT) has refused to halt insolvency proceedings against Carnival Techno Park Pvt. Ltd., holding that Canara Bank cannot challenge the existence of debt and default through a plea alleging fraudulent initiation of the process.A Bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra said the bank failed to show any fraud in the initiation of the process. Emphasising the scope of the provision, the tribunal observed: “Law is...

NCLAT Upholds Order Directing Golden Tobacco Directors To Pay ₹6.92 Lakh Over Non-Deposit Of Salary Deductions

The National Company Law Appellate Tribunal (NCLAT) at Delhi has upheld the liability of former directors of Golden Tobacco Ltd. for failing to deposit employee salary deductions with a credit society. It held that diversion of such funds, even without personal gain, may constitute fraudulent conduct under Section 66 of the Insolvency and Bankruptcy Code. The appellate tribunal dismissed a challenge to an order of the National Company Law Tribunal, Ahmedabad. That order had directed the...

NCLAT Sets Aside NCLT Delhi Order Sending Adel Landmarks Plan Back to CoC, Flags Unwarranted Interference

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently set aside an order of the National Company Law Tribunal that had sent the resolution plan of real estate developers, Adel Landmarks Ltd., back to the Committee of Creditors for reconsideration. The appellate tribunal held that the direction amounted to an "unwarranted" interference with the commercial wisdom of the creditors, even though the plan had already been approved with an 82.66% voting share after multiple rounds...

NCLAT Upholds Rejection Of CIRP Plea Against National Textile Corporation Over Pre-Existing Wage Dispute

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently upheld the rejection of an insolvency plea filed by Rashtriya Mill Mazdoor Sangh against National Textile Corporation Ltd., finding that disputes over wage dues were already pending, indicating a pre-existing dispute between the parties. A Bench of Justice Ashok Bhushan and Technical Member Barun Mitra observed, “The scope of Section 9 of IBC cannot be bent to use it as an instrument for debt recovery as the focus of IBC...

No Appeal Lies Against Dismissal Of Contempt Plea Without Punishment: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently reiterated that an appeal against dismissal of a contempt petition is not maintainable where no punishment has been imposed. The bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain fater examining the Contempt of Courts Act, observed, “Section 19(1) envisages Appeal against only those orders where a punishment has been inflicted for contempt. In the instant case, no...

IBC| NCLT's Power To Direct Modification Of Repayment Plan Is Discretionary, Requires Material On Record: NCLAT

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, has held that the power of the Adjudicating Authority under Section 114(3) of the Insolvency and Bankruptcy Code, 2016 to direct modification of a repayment plan is not obligatory and can be exercised only when supported by material on record. The tribunal dismissed an appeal filed by a personal guarantor to loans availed by the Nithin Group of Companies from Bank of India, challenging the order of the National Company Law...