495-Day Delay Is 'Gross Negligence': NCLAT Rejects Cethar Liquidator's Plea To Amend Avoidance Application

The National Company Law Appellate Tribunal at Chennai has dismissed an appeal filed by the liquidator of Cethar Limited, refusing to excuse a 495-day delay in amending an avoidance application filed during a company's insolvency proceedings. The tribunal held that the delay amounted to “gross negligence” and could not be condoned by relying on Section 148 of the Code of Civil Procedure, a provision that allows courts to extend procedural timelines but limits such extension to 30 days. A...

NCLAT Upholds Insolvency Admission Against Karanja Terminal Over ₹330 Crore Default

The National Company Law Appellate Tribunal has upheld the initiation of insolvency proceedings against Karanja Terminal & Logistics Private Limited, a port operator, after rejecting its claim that a proposed settlement with lenders had stalled insolvency action. A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra agreed with the National Company Law Tribunal that the corporate insolvency resolution process was rightly admitted. The tribunal said the...

Related Party Supplies Not CIRP Costs Without CoC Approval: NCLAT In Amtek Auto Insolvency

The National Company Law Appellate Tribunal (NCLAT) at Delhi has dismissed a Rs 18.98 crore claim by Lotus Auto Engineering Limited, a group company of Amtek Auto Limited, holding that supplies made by a related party during the corporate insolvency resolution process cannot be treated as insolvency resolution process costs unless expressly approved by the Committee of Creditors. A Principal Bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra held that...

NCLAT Dismisses Insolvency Appeal Against Larsen & Toubro Over Dues Claimed By Former Employee

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently dismissed an insolvency appeal filed against Larsen & Toubro Ltd by a former senior employee over alleged unpaid salary and service benefits.A Bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha upheld an order of the National Company Law Tribunal, Mumbai, which had rejected the employee's CIRP plea. The Appellate Tribunal held that disputes arising from employment...

Intent Irrelevant Once Conditions Of Preferential Transaction Are Met: NCLAT Reiterates

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has reiterated that a preferential transaction (Section 43 of the Insolvency and Bankruptcy Code) works on a statutory deeming fiction. Once the necessary ingredients are met, intent or motive does not matter. The burden shifts to the directors and beneficiaries to show that the transactions were in the ordinary course of business. A bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha...

NCLAT Upholds ₹6.56 Crore Liability on Paranjape Agro Promoter For Fraudulent Stock Write-Off

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently held that the promoter-director of Paranjape Agro Products India Private Limited must personally repay Rs 6.56 crore to the company after finding that inventory shown in the books never existed and was written off to defraud creditors at a time when there was no reasonable prospect of avoiding insolvency. A bench of Justice Mohd. Faiz Alam Khan and Technical Member Indevar Pandey upheld an order passed by the National...

NCLAT Remands Case After NCLT Failed To Record Finding On Homebuyers' Threshold in Insolvency Plea

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has set aside an order of the NCLT Mumbai Bench admitting insolvency proceedings against a real estate developer, holding that the NCLT failed to record a clear finding on the statutory threshold required for homebuyers under the Insolvency and Bankruptcy Code. The matter has been remanded for a fresh determination limited to this issue. A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra held...

EPFO Claim Misclassified As Government Dues; NCLAT Directs Lender To Pay Dues In Textile Company's Liquidation

The National Company Law Appellate Tribunal (NCLAT) at Chennai has held that the provident fund dues of liquidation bound Harshavardhan Cotton and Synthetic Pvt. Ltd. could not have been treated as government dues during liquidation, even though the company had not maintained a separate provident fund account. The tribunal said that, on the facts of the case, the amount claimed by EPFO had to be treated as a third-party asset and paid before the liquidation waterfall was applied. A bench of...

No Right To Insist On OTS After Default: NCLAT Upholds Insolvency Against Karanja Terminal

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has upheld the admission of insolvency proceedings against Karanja Terminal & Logistics Pvt. Ltd., holding that repeated and unsuccessful one-time settlement proposals do not prevent action under Section 7 of the Insolvency and Bankruptcy Code once debt and default are established. A bench headed by Chairperson Justice Ashok Bhushan, with Technical Member Barun Mitra, said the settlement proposals relied upon by the corporate...

Late CIRP Bid Can't Be Accepted Without Publishing Provisional List Of Resolution Applicants First: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has held that a belated expression of interest in an insolvency process cannot be accepted unless a provisional list of bidders is first published and objections are invited. The court reiterated that it is a mandatory requirement under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.The ruling came while dismissing appeals filed by the committee of creditors of...

NCLAT Expunges Adverse Remarks Against IL&FS Companies In Wind World Insolvency

The National Company Law Appellate Tribunal (NCLAT) at Delhi has expunged adverse remarks made by the NCLT Ahmedabad against three IL&FS group companies during the insolvency proceedings of Wind World (India) Limited. The appellate tribunal held that the observations were made without evidence and could not be allowed to remain. A bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Indevar Pandey said removing a creditor from the Committee of Creditors is not a...

Credits To Bankrupt's Bank Account Don't Automatically Vest In Bankruptcy Estate: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has ruled that money lying in the bank account of a bankrupt personal guarantor forms part of the bankruptcy estate and can be frozen by the Bankruptcy Trustee. At the same time, it clarified that amounts credited to the account after the start of bankruptcy cannot automatically be taken over unless the Insolvency and Bankruptcy Code procedure is followed. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun...