NCLAT
Lone Homebuyer Can't Challenge Approval Of Resolution Plan: NCLAT
The National Company Law Appellate Tribunal (NCLAT), New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) has held that one lone homebuyer has to go with the majority decision of the homebuyers and cannot challenge the approval of Resolution Plan. He has to sail or sink with the majority decision. Brief Facts The Appellants, Jai Prakash Keswani (Promoter) and Harvinder Singh (Homebuyer) filed the appeals ...
Sale Of Corporate Debtor In Liquidation As Going Concern Beyond 90 Days Is Permissible Under Amended Regulation 32A(4) Of IBC: NCLAT
The National Company Law Appellate Tribunal (“NCLAT”) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that the sale of a corporate debtor as a going concern in liquidation can be conducted even beyond 90 days under amended Regulation 32A(4) of the Liquidation Regulations, 2016 (Regulations). After the amendment, the sale of the corporate debtor can be conducted in the first auction and the requirement that such sale has to...
Relief U/S 60(5) Of IBC Against Rejection Of Claims By Liquidator Cannot Be Sought When Remedy U/S 42 Is Not Exhausted: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that relief under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (Code) cannot be claimed against rejection of claims by the liquidator when the remedy provided under section 42 of the code against such decision has not been resorted to. Brief Facts: The Corporate Debtor-M/s Varun...
Adjudicating Authority Can't Override CoC's Majority Decision On Extension Of CIRP Period At Instance Of Minority Dissenting Creditor: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) have re-iterated that that liquidation of the Corporate Debtor should be the last resort. The Tribunal observed that when 95.01% of the CoC members, after considering all aspects, passed a resolution for a 60-day extension, the Adjudicating Authority could not have overturned this decision at the instance of...
Infusion Of Funds In Corporate Debtor With Intention Of Earning Profits Would Fall Within Definition Of Financial Debt: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that Injecting funds in the Corporate Debtor with the objective of generating profits would be covered within the ambit of Financial Debt under Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (“Code”). It further held that such transactions have a commercial effect of borrowing. Brief Facts: The Appellant-Adhunik...
Submission & Approval Of Resolution Plan In Extended Timeline Of Expression Of Interest Cannot Be Questioned By Unsuccessful Resolution Applicant: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that issuance of fresh Form G is not required in case of modification in Invitation of Expression of Interest (EoI) when there existed a clause in the EoI permitting the Committee of Creditors (CoC) to extend the timeline for submitting the resolution plan. The Tribunal also held that if based...
Approval Of Resolution Plan Containing Clause Which Permits Creditors To Take Recourse Against Guarantees Cannot Be Interfered With: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that approval of a resolution plan containing a clause that creditors can take appropriate actions in relation to corporate/personal guarantee cannot be interfered with. Brief Facts: State Bank of India filed an insolvency application under section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) seeking initiation of...
Related Party Status Established Through Agreement Cannot Be Changed By Sending Termination Notice Against Terms Of Agreement: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that related party status established through an agreement under Section 5(24) of the Insolvency and Bankruptcy Code, 2016 (Code) cannot be changed by sending a termination notice in contravention of expressed terms of the agreement. Brief Facts: The Corporate Debtor invited the manufacturers to set up their units at...
No Bar On Corporate Debtor From Contesting Application U/S 9 Of IBC Even If No Reply Is Given To Demand Notice Issued U/S 8: NCLAT
The National Company Law Appellate Tribunal (“NCLAT”) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that just because no reply was given by the Corporate Debtor to the demand notice issued by the Operational Creditor under section 8 of the Insolvency and Bankruptcy Code, 2016 (Code), the Corporate Debtor cannot be precluded from contesting the application filed under section 9 of the...
Machinery Hypothecated By Corporate Debtor Against Loan Remains Its Asset If No Lease Deed Is Shown By Third Party: NCLAT
The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that the corporate debtor shall remain the owner of the machinery in its possession if no lease deed is shown under which the third party is claiming to be the owner of the machinery therefore the Resolution Professional is entitled to include such machinery in the Information Memorandum. Brief Facts: Bank of India...
Non-Registration Of “Charge” U/S 77 Of Companies Act Does Not Bar Creditor From Being Treated As “Secured Creditor” Under IBC During CIRP: NCLAT
The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Yogesh Khanna (Judicial Member) and Mr. Arun Baroka (Technical Member) have held that non-registration of “charge” in terms of Section 77 of Companies Act, 2013 is not a sine qua non for a Creditor to be treated as a “Secured Creditor” under section 3(30) of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Resolution Professional (RP). The Tribunal observed that the intent of legislature was...
Related Party Can't Assign Debt To Bypass Disqualification From Participating In CoC: NCLAT
The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that a 'related party' cannot assign its debt only with the object of securing a seat in the Committee of Creditors (CoC), to affect the interest and rights of other creditors. Background Facts: On October 13, 2023, the Corporate Insolvency Resolution Process ("CIRP") was initiated against...