Del Credere Agent Who Bears Buyer Default Risk Is Operational Creditor Under IBC: NCLAT Reaffirms

The National Company Law Appellate Tribunal (NCLAT) at New Delhi on Wednesday reiterated that a Del Credere Agent, an agent who guarantees payment to the supplier and bears the risk if the buyer defaults, is an operational creditor under the Insolvency and Bankruptcy Code and can initiate insolvency proceedings to recover unpaid dues. A bench of Judicial Member Justice Yogesh Khanna and Technical Member Indevar Pandey dismissed an appeal filed by the suspended director of Kirtiman Cements and...

Appellate Jurisdiction Confined To Orders Determining Rights Of Parties, Not Procedural Directions: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai on Tuesday held that appellate jurisdiction under the Insolvency and Bankruptcy Code is confined to examining orders of the National Company Law Tribunal (NCLT) that adjudicate or determine the rights of parties, and does not extend to purely procedural or interlocutory directions such as issuance of notice. The Bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain, while dismissing the appeal...

Corporate Guarantee Need Not Be Invoked To File Claim In Guarantor's CIRP: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that a financial creditor can maintain its claim in the Corporate Insolvency Resolution Process (CIRP) of a corporate debtor that had stood as a guarantor for another company, even if the corporate guarantee was never invoked. It further held that invocation of a corporate guarantee is relevant only for initiating CIRP against a guarantor, not for admission or maintenance of a claim in an already ongoing CIRP.The bench...

Personal Guarantor Who Participated In NCLT Proceedings Can Appeal Insolvency Admission: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has held that a personal guarantor who was permitted to participate in proceedings before the Adjudicating Authority qualifies as an “aggrieved person” entitled to maintain an appeal under the Insolvency and Bankruptcy Code against the admission of insolvency proceedings. The ruling came in an appeal filed by Ashwin Smith, a former director and personal guarantor of CM Smith & Sons Ltd. Smith challenged the admission of a...

Not Your Panel, Not Your Pick: NCLAT Draws A Clear Line On Liquidator Appointments

A recent NCLAT ruling extends creditor primacy into liquidation. But does the IBC's design support this judicial bridge between two distinct stages?

Breach of Settlement Terms No Ground To Recall Order Disposing Of Insolvency Proceedings: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently ruled that non-compliance with compromise terms cannot justify recall of a final order disposing of insolvency proceedings and must be addressed through execution proceedings. A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Indevar Pandey held that once a case is finally disposed of on the basis of a settlement, the tribunal cannot be asked to recall its order merely because one party has...

Limitation For Filing Appeal Against NCLT Order Begins From Date Of Its Upload: NCLAT

The National Company Law Appellate Tribunal at Chennai has held that the limitation period for filing an appeal against an order of the National Company Law Tribunal (NCLT) begins from the date the order is uploaded on the tribunal's website. On this ground alone, it dismissed two appeals filed by Cerebra Integrated Technologies Ltd as time-barred. A coram comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain (Technical Member), rejected...

NCLAT Rejects Ex-Director's Plea for Resolution Plans in Aviom Housing Finance Insolvency

The National Company Law Appellate Tribunal (NCLAT) at Delhi has refused a suspended director of Aviom India Housing Finance Pvt. Ltd. access to resolution plans submitted during the company's insolvency process. The tribunal reiterated that once the board of a financial service provider is superseded by the Reserve Bank of India, former directors have no right to participate in the CIRP or seek copies of resolution plans. The order was passed by a coram comprising Chairperson Justice...

Issuing Cheques For Another Entity's Dues Doesn't Create Operational Debt: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently held that a company cannot be pushed into insolvency merely for issuing cheques on behalf of another entity, in the absence of a direct contractual relationship with the creditor. A coram comprising Justice Yogesh Khanna and Technical Member Ajai Das Mehrotra set aside an order of the National Company Law Tribunal, Delhi that had admitted Nayati Healthcare and Research NCR Pvt. Ltd. into insolvency on a plea filed by...

NCLAT Upholds Order Directing Dagcon's Former Directors To Contribute ₹10.54 Crore For Fraudulent Transactions

The National Company Law Appellate Tribunal (NCLAT) at New Delhi recently held that the former directors of the realty company Dagcon (India) Pvt. Ltd. must contribute Rs 10.54 crore to the company's assets for fraudulent transactions. The tribunal dismissed an appeal filed by suspended director Rana Sarkar and upheld an order of the National Company Law Tribunal at Kolkata.A bench comprising Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha held, “The Resolution...

Insolvency Plea Cannot Be Admitted When Information Utility Records Dispute: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) held that a record of dispute in an Information Utility obligates the tribunal to reject an insolvency application filed by an operational creditor.A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra set aside the order initiating insolvency against OFB Tech Pvt. Ltd. on an appeal filed by the company's suspended director.The appellate tribunal held that “When there is record of dispute in the Information...

Civil Suit, Anticipatory Bail Application Filed After CIRP Plea Cannot Amount To Pre-Existing Dispute: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at New Delhi recently held that civil proceedings or anticipatory bail applications filed after a Section 9 CIRP plea cannot be used to claim a pre-existing dispute or block the admission of a valid insolvency petition. The tribunal affirmed the NCLT Indore's order admitting a Section 9-CIRP application against Steelexpert Industries (Indore) and dismissed an appeal filed by former director Yusuf Malubhaiwala. A bench of Chairperson Justice...