Sale Of Secured Assets Completed Before Filing Of Insolvency Application Can't Be Invalidated By Moratorium: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that assets lawfully sold in an auction prior to filing of an insolvency application under section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be included in the debtors' estate or protected by moratorium under section 96 of the IBC. A Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) dismissed the appeal filed by Maria Kuresh Rajkotwala, upholding the an order...

Resignation as Director Doesn't Relieve Guarantor of Personal Guarantee Obligations: NCLAT

The National Company Law Appellate Tribunal at Delhi recently observed that a resignation from directorship does not absolve a person from obligations arising under a personal guarantee agreement. The tribunal held that a personal guarantee, once executed as a continuing obligation, remains binding even after the guarantor steps down from the company's board. A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra passed the order on October 29, upholding the...

Termination Of Contract During CIRP For Performance Default Not Covered By Moratorium: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that termination of a contract based on long performance defaults does not violate section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC). A Bench comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) dismissed the appeal filed by Mr. Pradeep Upadhyay, Liquidator of M/s Dugal Associates Pvt. Ltd., against Bhadohi Industrial Development Authority (BIDA), upholding the order of the NCLT,...

'Callous': NCLAT Pulls Up NCLT For Ignoring MCA Communication On Removal Of Promoter's Disqualification

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench set aside an order passed by the National Company Law Tribunal (NCLT) by which it had declared promoters of JC World Hospitality Pvt. Ltd. ineligible under section 29A of the Insolvency and Bankruptcy Code, 2016 (IBC) and quashed their resolution plan. The Bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that the NCLT had erred in declaring the promoters ineligible without appreciating...

Leasehold Rights Vest With Corporate Debtor Upon Amalgamation: NCLAT Upholds Inclusion Of WBHIDCO Land In Concast Steels' Liquidation Estate

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld the inclusion of leasehold land allotted by West Bengal Housing Infrastructure Development Corporation Ltd. (WBHIDCO) to Concast Ispat Ltd. (CIL) in the liquidation estate of Concast Steel and Power Ltd. (CSPL), thereby dismissing WBHIDCO's appeal and affirming that the transfer of the leased land was made with its 'implied consent'. A bench of Justice Mohd. Faiz Alam Khan (Judicial Member) and Technical Member...

Failure To Submit Final Plan Or Participate In Challenge Process Bars Unsuccessful Bidder From Questioning Approved Plan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench dismissed an appeal filed by Ganga Construction Consortium, an unsuccessful resolution applicant, challenging the approval of resolution plan submitted by Manglam Multiplex Pvt. Ltd. in the Corporate Insolvency Resolution Process (CIRP) of Varutha Developers Pvt. Ltd. A Bench comprising Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that the Appellant having failed to submit the final resolution plan...

Liquidator Cannot Conduct Private Sale Without Prior NCLT Approval: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that Liquidator cannot conduct a private sale without the permission of the National Company Law Tribunal (NCLT) as mandated under Regulation 33(2)(d) of the IBBI (Liquidation Process) Regulations, 2016 (LPR). The Bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) dismissed appeals filed by Orissa Alloy Steel Pvt. Ltd. (OASPL) and S.M. Steels and Power Ltd. (SMSPL) arising from a common...

Debtors Not Exempt From Insolvency For Defaults Occurring Before Covid-19 Suspension Period: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench upheld the initiation of Corporate Insolvency Resolution Process (CIRP) against Majestic Hotels Limited holding that defaults occurred before COVID-19 suspension period are not protected by section 10A of the Insolvency and Bankruptcy Code, 2016 (IBC) even if payments were to be made during the suspension period. A bench comprising Justice Ashok Bhushan and Mr. Indevar Pandey (Technical Member) dismissed an appeal filed...

Fraud Not Barred By Time: NCLAT Upholds Director's Liability To Contribute ₹8.71 Crore To Corporate Debtor's Assets Obtained Through Fraud

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench upheld the suspended director's liability to restore the amount of Rs. 8.71 crore obtained through fraudulent transactions to the corporate debtor's assets holding that the manner in which the director engineered the transaction clearly amounted to conducting the business with intent to defraud the creditors under section 66 of the IBC. A bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that...

Justice Ashok Bhushan Appointed As NCLAT Chairperson For Second Term

The Central Government has approved the re-appointment of Justice Ashok Bhushan, former Judge of the Supreme Court of India, as Chairperson of the National Company Law Appellate Tribunal (NCLAT). The re-appointment will be effective from the date he assumes charge and will continue until he attains the age of 70 years, i.e., till July 4, 2026.Justice Bhushan was earlier appointed as the NCLAT Chairperson on October 29, 2021, shortly after his retirement from the Supreme Court, and took charge on...

NCLAT Sets Aside Order Initiating Insolvency Against Realty Firm Mahagun, Orders Fresh Adjudication

In a relief to nearly 8,000 homebuyers, the National Company Law Appellate Tribunal (NCLAT) on Thursday set aside an order initiating insolvency against the Noida-based realty firm Mahagun (India) Pvt. Ltd., directing the adjudicating authority to reconsider the matter afresh. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra noted that the National Company Law Tribunal (NCLT), New Delhi, had failed to consider that the default was limited to a single project while...

Gensol Insolvency: NCLAT Refuses To Expunge NCLT's Remarks Against IRP, Says Observations Not Adverse To His Conduct

The National Company Law Appellate Tribunal (NCLAT) recently refused to expunge certain adverse observations made against insolvency professional Pulkit Gupta in an order passed by the National Company Law Tribunal (NCLT), Ahmedabad, while admitting insolvency proceedings against Gensol Engineering Limited and its group entity Gensol EV Lease Limited. The appellate tribunal, in an order passed on November 3, clarified that the remarks of the tribunal concerning Gupta's prior association with...