NCLAT Rejects Jaypee Infratech's ₹15 Crore Interest Claim On Funds Deposited By JAL For Homebuyers

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Tuesday dismissed a plea by real estate company Jaypee Infratech Ltd. (JIL) seeking interest of Rs 15 crore on nearly Rs 546 crore deposited by its parent company, Jaiprakash Associates Ltd. (JAL), for the benefit of homebuyers during JIL's insolvency proceedings A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra noted that in its earlier judgment on August 28, 2023, it had already ruled that the Rs 750...

Delay Condonable When Composite Appeal Was Filed Within Limitation But Refiled Separately After Registry's Objection: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has allowed an appeal where a composite appeal was filed within limitation, but defects were raised by the registry necessitating re-filing as separate appeals, which was beyond the period of 45 days. Initially the appellant filed a single composite appeal challenging two different orders passed by the NCLT within the limitation period of 30...

Bank Advancing Loans To Homebuyers Can't Claim Status Of Financial Creditor Against Builder In Absence Of Undertaking To Repay: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that a bank disbursing loans to homebuyers cannot be treated as a financial creditor in the Corporate Insolvency Resolution Process (CIRP) of the builder, since the loan amount was sanctioned to the homebuyers and not to the corporate debtor. The Tribunal further noted that the builder had not undertaken to repay the amount to the bank in the event of ...

Resignation From Directorship Does Not Discharge Personal Guarantor From Liability Under Continuing Guarantee: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that once a personal guarantee is executed, the resignation from the directorship does not discharge the guarantor from liability, particularly when the guarantee is a continuing one, unless it has been expressly revoked. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “we are therefore of the considered view that the Adjudicating Authority has rightly concluded that simply because the...

Suspended Directors Are Not Entitled To Access Valuation Reports Rejected By CoC: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that suspended directors are not entitled to access valuation reports rejected by Committee of Creditors (CoC), since such documents were confidential and not relied upon in the resolution process. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “when only the fresh valuation reports were germane for the insolvency resolution of the Corporate Debtor which had already been shared while...

CCI Has No Power to Investigate Disputes Concerning Abuse Of Patents: NCLAT

The National Company Law Appellate Tribunal (NCLAT) on Thursday reaffirmed that the Competition Commission of India (CCI) has no authority to investigate disputes involving the exercise of patent rights, holding that such matters fall exclusively under the Patents Act, 1970.The tribunal said that when a product is protected by a patent, issues related to its pricing or licensing must be addressed under patent law and not under competition law. A coram of Judicial Member Justice Yogesh Khanna...

Burden To Prove Ownership Of Assets Lies On Claimant; Liquidator Not Required To Establish Title To Assets In His Custody: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi upheld an order passed by National Company Law Tribunal (NCLT) allowing liquidators to remove moveable assets from the leased premises owned by Reliance Realty Limited (RRL) and restraining RRL from obstructing access to such assets. A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “when the Liquidator took control and possession of the goods/assets lying in the leased premises, this was also ...

Company's Worth Is Irrelevant For Initiating Insolvency If Debt & Default Are Established: NCLAT New Delhi

The Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Member-technical), has held that the company's worth is irrelevant for initiating insolvency if debt and default are established. The appeal was filed against the admission of the Section 7 application filed by the Axis Bank against the corporate debtor for debt and default of Rs. 16,95,95,909. Contention of the Parties The appellant, a corporate debtor, argued...

Appeal Against Dismissal Of Contempt Petition By NCLT Not Maintainable: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently held that an appeal against dismissal of a contempt petition by the National Company Law Tribunal (NCLT) is not maintainable before the Appellate Tribunal under Section 19 of the Contempt of Courts Act, 1971. A coram comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain ruled that such an appeal would lie only against an order imposing punishment for contempt, not against a...

RP's Admission Of Claim In Earlier CIRP Amounts To Acknowledgement U/S 18 Limitation Act For Commencement Of Fresh Limitation Period: NCLAT

The NCLAT, Principal Bench, New Delhi, comprising Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical), has held that the admission of a financial creditor's claim by a resolution professional during an earlier CIRP amounts to an acknowledgement of debt within the meaning of section 18 of the Limitation Act. Therefore, the said acknowledgement gives the fresh period of limitation for initiating CIRP under IBC. Background of the Case DHFL had advanced two loans...

Unenforced Equitable Mortgage Remains Corporate Debtor's Asset, Cannot Be Treated As Margin Money: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi set aside an order passed by National Company Law Tribunal (NCLT) Mumbai by which it directed that an amount equivalent to 5% of the value of Foreign Letters of Credit (FLCs), Letters of Credit (LCs), and Bank Guarantees (BGs) be excluded from the total assets of Frost International Limited and be allocated to Bank of India (BOI) as margin money.A bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) held that “Since...

NCLAT Seeks Replies From Aakash, Others On Byju's Plea To Block Rights Issue

The National Company Law Appellate Tribunal (NCLAT), Chennai, on Thursday sought replies from Aakash Educational Services Ltd. (AESL) and other respondents in a plea filed by debt-ridden edtech major Byju's (Think and Learn Pvt. Ltd.) seeking to restrain Aakash from proceeding with a proposed rights issue that could dilute its shareholding in the test-prep subsidiary.The right's issue which was approved by the shareholder's in an Extra-Ordinary General Meeting (EGM) on Wednesday is scheduled to...