NCLAT Refuses To Stay Adani's Rs 15,000 Cr Resolution Plan For JAL on Vedanta's Challenge

The National Company Law Appellate Tribunal (NCLAT), Delhi, on Tuesday refused to stay the implementation of Adani's ₹15,000-crore resolution plan for Jaiprakash Associates Limited (JAL) while hearing a plea by the Vedanta Group challenging the approval of the plan by the Allahabad Bench of the National Company Law Tribunal (NCLT). The bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra said that “the implementation of the resolution plan shall go on, however, the action...

NCLAT Sets Aside NCLT Order, Holds Insolvency Plea By Sole Proprietorship Maintainable Against Birla Jewels

The National Company Law Appellate Tribunal (NCLAT) Principal Bench at New Delhi has recently allowed an appeal filed by a sole proprietorship against rejection of its insolvency plea, holding that a Section 9 application under the Insolvency and Bankruptcy Code, 2016, is maintainable at the instance of a proprietorship concern. The tribunal relied on earlier precedent to hold that proprietorship firms are competent to initiate corporate insolvency resolution process. Setting aside an order...

NCLAT Upholds Rejection Of Belated Higher Bid In Hema Automotive Liquidation, Says Fairness Not One-Way Street

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently observed that fairness in insolvency asset sales cannot be viewed from the perspective of a single bidder alone, while dismissing Sunrise Industries' appeal seeking consideration of its higher bid submitted after the deadline in the liquidation process of Hema Automotive Pvt. Ltd.The bench of Judicial Member Justice N Seshasayee and Technical Member Indevar Pandey observed that,“Fairness is a constant that works...

SRA Need Not List All Assets In Resolution Plan; Undisclosed FDRs Belong To Corporate Debtor SPS Steels: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi recently held, in the insolvency of SPS Steels Rolling Mills Ltd, that the successful resolution applicant is not required to specify every asset of the corporate debtor in the resolution plan, and assets not mentioned in the information memorandum do not cease to belong to the corporate debtor after approval of the plan. A bench of Judicial Member Justice Mohammad Faiz Alam Khan and Technical Member Naresh Salecha, after examining...

Breach Of Settlement Gives Fresh Cause Of Action; NCLAT Allows Subham Capital To File Fresh CIRP Plea Against Vedic Realty

The National Company Law Appellate Tribunal (NCLAT) has recently held that Subham Capital Pvt. Ltd. was entitled to file a fresh Section 7 petition against Vedic Realty Pvt. Ltd. after breach of a settlement agreement, ruling that the subsequent default gave rise to a new cause of action and was not barred by res judicata. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed: “The breach of settlement clearly gave rise to a new cause of action in favour of the...

RBI Circular Cannot Override IBC; Written Agreement Not Mandatory To Prove Financial Debt: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that RBI circulars requiring written loan agreements cannot override the Insolvency and Bankruptcy Code. The tribunal observed that it is “a clear derivative” of its earlier judgments that the RBI circular does not prevail over IBC proceedings and that a written agreement is not mandatory to establish financial debt under the Code. The bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra, while...

In Appeal Against NCLT Order On Adani Plan For JAL, NCLAT Bars Invocation Of Subcontractor's Bank Guarantee For Six Months

The National Company Law Appellate Tribunal (NCLAT) in Delhi on Friday directed that the bank guarantee furnished by Velocity Enterprises, a subcontractor engaged by Jaiprakash Associates Limited (JAL) for erection and maintenance of substations, shall not be invoked for six months beyond its expiry on March 31, 2026. The order came in the first appeal filed after the National Company Law Tribunal approved Adani Group's Rs 15,000-crore resolution plan for the company. The matter was heard by a...

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...