Successful Auction Purchaser Liable To Pay 'True-Up' Charges After Sale Of Corporate Debtor As Going Concern: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that once the Corporate Debtor is taken over by a Successful Auction Purchaser on a going-concern basis and a sale certificate is issued by the Liquidator, the purchaser cannot avoid its responsibility to pay true-up charges payable under law.The present appeal has been filed under section 61 of the Insolvency and...

Right To Sue U/S 9 Of IBC Begins When MSME Arbitral Award Becomes Final: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the right to sue under section 9 of the IBC begins when the MSME award becomes final and operative. The MSME Council passed an arbitral award in favor of the appellant in the year 2011. The award was challenged before the city civil court and got dismissed. Then, the appeal was preferred before the Hon'ble...

Restoration Of Plea U/S 7 Of IBC Not Permissible After Payment Of Principal & Interest By Corporate Debtor Upon NCLT's Order: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that Once the principal amount mentioned in Part IV of the application under Section 7 of the IBC along with interest is paid in pursuance of an order of the NCLT, the financial creditor cannot seek restoration of the application merely on the ground that interest on the entire principal amount was not paid, which crossed 1 crore; therefore, the NCLT...

Plea U/S 9 IBC Can't Be Admitted Once Affidavit Confirming Settlement Between Corporate Debtor & Operational Creditor Is Filed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that once the Corporate Debtor entered into a settlement with the Operational Creditor to discharge its liability, for which an affidavit confirming the settlement was also filed, the Adjudicating Authority cannot, overlooking these facts, admit an application under Section 9 of the IBC. The present appeal has been filed against an order by which...

Rejection Of Legal Consultant's Claims By RP Over Absence Of Invoices In Corporate Debtor's Records Can't Be Set Aside: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Rakesh Kumar Jain, Justice Mohd Faiz Alam Khan and Mr. Naresh Salecha (Technical Member), has held that the rejection of the legal consultancy service provider's claim by the Resolution Professional, based on the absence of invoices for services in the Corporate Debtor's records, cannot be interfered with. Although the service provider was allotted flats/inventories in lieu of services, it is unclear whether...

Corporate Debtor's Liability As Guarantor Remains Unaffected By Internal Adjustments Among Financial Creditors: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that internal adjustments among the Financial Creditors in the form of merger, demerger, or amalgamation do not affect the liability of the Corporate Debtor as guarantor, especially when all terms and conditions of the Guarantee Deed remain intact even after such adjustments. The present appeal has been filed...

Corporate Debtor's Statement To Enter Into OTS With Financial Creditor Indicates Existence Of Debt And Default: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that the Corporate Debtor's submission before the Adjudicating Authority regarding entering into a One Time Settlement with the Financial Creditor itself amounts to an admission of debt and default. The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code against an order passed by National Company Law Tribunal...

Absence Of Charge Defeats Income Tax Department's Secured Creditor Status: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial) and Mr. Naresh Salecha (Member-Technical), has held that in the absence of the charge, the income tax department cannot be considered as a secured creditor. The financial creditor, M/s Prutha Enterprises, filed a section 7 application before the adjudicating authority against the corporate debtor for default in the repayment of the debt. The adjudicating authority...

Vehicles Repossessed Before CIRP Can't Form Part Of Corporate Debtor's Assets: NCLAT In Appeal By SMAS Auto Leasing Against Gensol

The National Company Law Appellate Tribunal bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical), disposed of an appeal filed by SMAS Auto Leasing India Pvt. Ltd. against the order of the National Company Law Tribunal Ahmedabad,which had admitted filed by the Indian Renewable Energy Development Agency Limited against Gensol Engineering Limited. It held that since 152 of the 164 leased electric vehicles had already been repossessed by SMAS under Delhi High Court...

Application U/S 7 Of IBC Can Be Filed Against Multiple Corporate Debtors Forming Part Of Same Project: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that an application under section 7 of the IBC can be filed against multiple corporate debtors which are part of the same project. The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by National Company Law Tribunal (NCLT) New Delhi. ...

Adjudicating Authority Can Decide Allegations Of Fraud U/S 65 Of IBC While Resolution Plan Is Being Considered: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice N Seshasayee and Mr Arun Baroka (Technical Member) has held that the stage at which an application under Section 65 is considered is inconsequential; and if fraud in initiating insolvency proceedings is proved, the entire proceedings stand vitiated. The mere fact that a resolution plan was under consideration when the application under Section 65 was filed does not denude the Adjudicating Authority of its power...

Neither Registry Nor NCLT Can Dismiss S.7 Petition Without Giving An Opportunity To Cure Defects In Supporting Affidavit: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial) and Naresh Salecha (Member-Technical), has held that neither the registry nor the NCLT can dismiss a section 7 application without giving an opportunity to the party to cure the defects in the supporting affidavit. The financial creditor, HDFC Bank, filed an application u/s 7 of the IBC to initiate CIRP of the corporate debtor for an outstanding debt...