DRT Recovery Certificate Confers Financial Creditor Status And Gives Rise To Fresh Cause Of Action: NCLAT Chennai

The company appeals were filed by the personal guarantors of the corporate debtor, challenging the order admitting the Insolvency Resolution Process (IRP) against them u/s 95 of the IBC, 2016. The issues before the Ld. NCLAT were whether the demand notice was properly served and whether the initiation of the proceedings was barred by the limitation. Background of the Case The corporate debtor availed the loan facility from the financial creditor and the appellants were the...

Claim Filed During Liquidation Must Be Dealt With U/S 53 Of IBC, NCLT Can't Direct RP To Make Payment Directly: NCLAT Delhi

The National Company Law Appellate Tribunal held that a claim filed during liquidation must be dealt with as per the waterfall mechanism under Section 53 of the Insolvency and Bankruptcy Code, 2016, and the NCLT cannot direct a Liquidator to make payment to any claimant directly. Justice Ashok Bhushan and Arun Baroka said: “We are of the view that when stakeholder filed a claim in the CIRP and in the liquidation, the claim is entitled to be dealt with as per Section 53 of the IBC. The...

Mere Allegation Of Coercion, Threat, Or Fraud Without Prima Facie Proof Cannot Invalidate Withdrawal Of CIRP U/S 12A Of IBC: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has held that the withdrawal of the Corporate Insolvency Resolution Process (CIRP) u/s 12A of the IBC cannot be set aside on the mere allegation of coercion or threat unless that has been proved by sufficient evidence. Background of the Case The operational creditor filed an application before the adjudicating authority u/s 9...

[Reverse CIRP] NCLAT Closes CIRP Against Grand Reality Under Its Inherent Powers Upon Handover Of Flats To Homebuyers & Satisfaction Of Claims

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench comprising Justice Yogesh Khanna (Judicial Member) and Mr. Indevar Pandey (Technical Member) exercising its inherent powers under Rule 11 of the NCLAT Rules, 2016, has closed the Corporate Insolvency Resolution Process (“CIRP”) against Grand Reality Pvt. Ltd. through the 'Reverse CIRP' mechanism. The project was completed under court-monitored supervision, and possession was handed over to all homebuyers, and no...

Procedural Direction To File An Affidavit On Ledger Accuracy Is Not Appealable U/S 61 Of IBC: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that the procedural direction requiring the appellant to file an affidavit confirming the accuracy of certain ledger transactions could not be appealed. The appeal was preferred u/s 61 of the IBC. Background of the Case The appellant, who happens to be the erstwhile director of Samaara Leathers Pvt. Ltd., has...

Ratification Of IRP Fees By CoC Can Be Implied From Meeting Minutes And Conduct: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has addressed the question of whether ratification of fees and expenses payable to an Interim Resolution Professional (IRP) must be express and recorded formally, or it can be implied from the conduct and minutes of the CoC. The bench held that the formal ratification is not mandatory if the CoC's conduct and meeting...

CIRP Cannot Be Sustained If Default Is Cured Before Admission Of Section 9 Application: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member – Technical), has ruled that the application u/s 9 of the IBC, 2016, cannot be sustained if the operational debt is settled before the date of admission. Background of the Case Section 9 IBC application, seeking CIRP of the corporate debtor, was filed by the operational creditor. During the pendency of proceedings, the operational creditor...

NCLAT Grants Extension Of CIRP Timeline To Enable Voting On Revised Resolution Plan

M/s Shri Ram Switchgears Limited (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) on 29.02.2024. The Adjudicating Authority granted an extension of the CIRP up to 24.05.2025. Before the expiry of the timeline on 24.05.2025, the Committee of Creditors (“CoC”) in its meeting held between 09.05.2025 and 14.05.2025, resolved with 96.94% vote share to seek a 30-day extension and exclusion of 148 days due to delays caused by the replacement of Interim...

Financial Creditor Can't File Same Claim Twice For Same Loan In Multiple Insolvency Proceedings Without Proper Adjustment: 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 a financial creditor is not permitted to file the same claim twice for the same loan in multiple insolvency proceedings without proper adjustment. In the present case, the Appellant filed the same claim in two separate proceedings without disclosing the claims filed in an earlier ...

Intervention Application U/S 60(5) Of IBC Can't Be Entertained Beyond Limitation Period Of Three Years: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member) has held that Intervention Application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be entertained beyond the limitation period of 3 years. The present appeal has been filed by the Corporate Person through its Liquidator against an order passed by National Company Law Tribunal (NCLT) by which it...

Reopening Case Reserved For Orders Without Hearing Affected Party Violates Principle Of Audi Alteram Partem: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that an order reserved for the pronouncement cannot be reopened and altered based on a unilateral mention made by a non-party without hearing the affected party. Background of the Case The appellant filed four applications before the adjudicating authority against the four individuals, who were the personal...

Amount Paid By Co-Applicant From Account Other Than That Of Corporate Debtor Is Not Covered U/S 43 Of IBC, Reversal Can't Be Directed: 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 the amount paid by the co-applicant of the corporate debtor during the Corporate Insolvency Resolution Process (CIRP), from an account other than that of the corporate debtor, cannot be directed to be reversed by the Adjudicating Authority, as it does not fall under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC). ...