Filing CIRP To Evade Tax Liabilities Amounts To Fraud: NCLAT New Delhi

The New Delhi Bench of the National Company Law Appellate Tribunal on 17 March, held that initiating the Corporate Insolvency Resolution Process of a corporate debtor to evade tax liabilities amounts to fraud under Section 65 of the Insolvency and Bankruptcy Code, 2016. A Bench comprising Judicial Member Justice Ashok Bhushan and Technical Member Barun Mitra observed: “Thus, what seems to underpin the reason for triggering CIRP proceedings was clearly to circumvent the tax liability. It is...

Warranty Dispute Over Defective Batteries Held Pre-Existing Dispute; NCLAT Upholds Rejection Of CIRP Plea Against Eastman Auto

The National Company Law Appellate Tribunal (NCLAT) at Delhi recently refused to allow insolvency proceedings to be initiated in a dispute between Vave India Energy Solutions Private Limited and Eastman Auto & Power Limited. The tribunal found that the case arose from complaints about defective batteries supplied under warranty and that the liability had been disputed before the statutory demand notice was issued. A bench of Judicial Member Justice Yogesh Khanna and Technical Member Ajai...

'Deeming' Fiction Lets Interim Resolution Professional Continue Until CoC Appointment: NCLAT New Delhi

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 16 March, held that the “deeming” fiction created by law empowers the Interim Resolution Professional (IRP) to continue as the Resolution Professional (RP) even if not formally confirmed by the Committee of Creditors (CoC) in the first meeting. A Bench of Judicial Member Yogesh Khanna and Technical Member Indevar Pandey observed: “The objective of IBC is a time bound resolution of a Corporate Debtor and hence,...

Approval Of Era Infra Engg. Resolution Plan Does Not Extinguish Creditor Rights Against Borrower Subsidiary, Guarantor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that approval of the resolution plan of Era Infra Engineering Ltd. (EIEL), the holding company of Haridwar Highways Project Ltd. (HHPL), does not prevent creditors from initiating insolvency proceedings against HHPL and corporate guarantor Era Infrastructure (India) Ltd. (EIIL), while dismissing appeals filed by EIEL challenging admission of Section 7 petitions. A bench of Chairperson Justice Ashok Bhushan and Technical...

Third Parties Entitled To Certified Copies Of NCLT Orders To File Appeals: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai, on 27 February, observed that certified copies of NCLT orders must be issued even to third parties who were not part of the original proceedings if they seek to challenge the order in appeal. A Bench of Judicial Member Justice N. Seshasayee and Technical Member Jatindranath Swain was hearing an appeal filed by SA Jhan Mohammed against an order concerning Maan Sarovar Properties Development Pvt Ltd. The Tribunal noted: “We have to...

CoC Has Exclusive Power To Fix Resolution Professional Fees, NCLT Can Interfere Only If Fee Not Proposed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that the Adjudicating Authority can fix the fees of the Interim Resolution Professional or Resolution Professional only in cases where the applicant initiating the corporate insolvency resolution process (CIRP) has not proposed the fee and that otherwise the power to determine such expenses lies exclusively with the Committee of Creditors (CoC). The tribunal set aside the order of the Mumbai Bench of the National Company Law...

IBC Applies To Multi-State Cooperative Societies Despite MSCS Act Excluding Companies Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT) recently held that proceedings under the Insolvency and Bankruptcy Code, 2016, can be maintained against a multi-state cooperative society. It said the jurisdiction of the insolvency tribunal cannot be excluded by relying on the Multi-State Cooperative Societies Act, 2002, which excludes the applicability of the Companies Act, 2013. The ruling came while the tribunal upheld a direction requiring Mehsana Urban Co-Operative Bank Ltd to refund...

NCLAT Declines To Recall Ruling Holding Cosmic CRF Ineligible As Resolution Applicant In Amzen CIRP

The National Company Law Appellate Tribunal (NCLAT) at Delhi recently refused to recall its earlier judgment declaring Cosmic CRF Limited ineligible to participate as a resolution applicant in the insolvency resolution process of Amzen Transportation Industries Ltd., holding that no error had been shown that would justify the exercise of its recall jurisdiction. A bench of Judicial Member Justice Mohammad Faiz Alam Khan and Technical Member Arun Baroka observed that the earlier judgment had...

NCLAT Sets Aside NCLT Order, Upholds Auction Sale Confirmed Before CIRP, Says Moratorium Not Applicable

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently set aside an order of the National Company Law Tribunal (NCLT), Kolkata, which had declared the confirmation of an auction sale and the sale certificate in respect of the corporate debtor's share in a mortgaged property as null and void, holding that the same had been issued after commencement of the corporate insolvency resolution process (CIRP) and during the moratorium. The appellate tribunal held that since the...

NCLAT Upholds Insolvency Against Al-Dua, Rejects Plea That Debt Was Transferred To Another Company

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently upheld the admission of insolvency proceedings against Al-Dua Food Processing Pvt. Ltd., rejecting the plea of its ex-promoter Mohd. Zaheer that the company was not liable to pay the operational debt as the liability had been transferred to another entity under a Share Purchase Agreement. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra held that the defence of transfer of liability was not...

Liquidator Cannot Appeal His Own Replacement As He Is Not 'Person Aggrieved' Under IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) on Tuesday held that a liquidator cannot maintain an appeal challenging his replacement under the Insolvency and Bankruptcy Code (IBC), ruling that removal from such a statutory assignment does not create a vested entitlement to continue in office.A bench of Chairperson Justice Ashok Bhushan and Technical Member Indevar Pandey observed, “It is well settled that once the Adjudicating Authority, for reasons recorded, directs replacement of a...

NCLAT Upholds Rejection Of Homebuyer's Claim Filed 4 Days Before CoC Vote On Resolution Plan For Developer

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday upheld the rejection of a homebuyer's claim filed four days before a Committee of Creditors (CoC) meeting to vote on resolution plan, noting that under the CIRP Regulations, belated claims can be admitted only if they are submitted up to seven days before such meetings. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed, "When we look at the above CIRP Regulations, it is amply clear that...