NCLAT Delhi Says Counsel's Personal Difficulties Cannot Explain Appellant's 202-Day Refiling Delay

On 18 September, the National Company Law Appellate Tribunal (NCLAT) at New Delhi held that an appellant cannot rely on the personal difficulties of his counsel to explain his own failure to rectify Registry defects and seek condonation of a 202-day delay in refiling an appeal. A Bench of Judicial Member Justice Sharad Kumar Sharma with Technical Members Arun Baroka and Indevar Pandey dismissed an appeal filed by Rajendra Devidas Puranik against the Mumbai Bench of the National Company Law...

GNIDA, NOIDA Not Secured Creditors In Shubhkamna Buildtech Insolvency: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has dismissed appeals by the Greater Noida Industrial Development Authority (GNIDA) and New Okhla Industrial Development Authority (NOIDA), holding that their lease deeds did not create a security interest that would make them secured creditors in the insolvency proceedings of Shubhkamna Buildtech Pvt. Ltd.A bench of Judicial Member Justice Mohammad Faiz Alam Khan and Technical Member Naresh Salecha held that the “first charge”...

Complainant Is 'Person Aggrieved,' Can Appeal Against Order In Insolvency Professional Misconduct Case: NCLAT

The National Company Law Appellate Tribunal (NCLAT), Delhi, has recently held that a complainant whose complaint leads to disciplinary proceedings against an Insolvency Professional (IP) can qualify as a “person aggrieved” under Section 220(7) of the Insolvency and Bankruptcy Code, 2016 (IBC).The tribunal held that such a complainant can appeal against a final punitive order passed by the Insolvency and Bankruptcy Board of India's (IBBI) Disciplinary Committee.Judicial Member Justice Mohammad...

NCLAT Dismisses Challenge To Rungta Mines' Resolution Plan For NSL Nagapatnam Power

The National Company Law Appellate Tribunal Member Naresh Salecha has backed dismissal of suspended director Mandava Prabhakar Rao's challenge to Rungta Mines' resolution plan for NSL Nagapatnam Power and Infratech Ltd.He held that Rao's representative was rightly excluded from the 20th Committee of Creditors meeting for lack of written authorisation and a confidentiality undertaking.Salecha's opinion follows a difference of opinion between the Judicial and Technical Members of the original...

Objection To Demand Notice Served Via FedEx Cannot Defeat Insolvency Plea If Notice Received: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Thursday ruled that an objection to service of a demand notice via FedEx cannot defeat insolvency proceedings when the corporate debtor has received the notice and had knowledge of the claim.The bench comprising Judicial Member Justice Sharad Kumar Sharma, Technical Member Arun Baroka and Technical Member Indevar Pandey observed, “Hyper-technical objections cannot be permitted to defeat a proceeding when from the circumstantial...

Removal Of Hypothecated Machinery During Insolvency Can Amount To Fraudulent Trading: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that removing high-value secured (hypothecated) machinery during insolvency proceedings and replacing it with substantially lower-value machinery is not a mere technical irregularity.It directly affects a company's asset base and the security and recovery prospects of its creditors.The bench of Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey made the observation while upholding...

Joint And Several Liability In Arbitral Award Does Not Extinguish Personal Guarantee: NCLAT Delhi

The National Company Law Appellate Tribunal (NCLAT), New Delhi, on 17 September held that an arbitral award providing for joint and several liability does not, by itself, alter the legal status of a Personal Guarantor or extinguish the original contract of guarantee. A Bench of Judicial Member Justice Sharad Kumar Sharma with Technical Members Arun Baroka and Indevar Pandey dismissed appeals filed by personal guarantors of Oasis Alcohol Ltd., including Ravindra Gopalkrishan Agarwal, challenging...

Mere Pendency Of Criminal Proceedings Does Not Disqualify Resolution Applicant: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has ruled that the mere pendency of criminal proceedings or an investigation does not by itself make a prospective Resolution Applicant ineligible to submit a resolution plan under the Insolvency and Bankruptcy Code, 2016 (IBC).A bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Naresh Salecha observed,"Therefore, in our considered opinion, the pendency of any criminal proceedings or investigation against a...

Arbitration Is A Private Remedy, It Cannot Override Statutory Rights Under IBC: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai on 27 August observed that an arbitration clause in a contract, being a private remedy agreed between parties, cannot override or take away the statutory remedy available under the Insolvency and Bankruptcy Code, 2016 (IBC). A Bench comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindraath Swain set aside the NCLT, Amravati order and directed it to admit Posco International Corporation's application...

Later Amendment Cannot Retrospectively Alter Liquidation Process Already Commenced: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has ruled that a later regulatory amendment cannot retrospectively alter a liquidation process that had already commenced. It held that the rights and obligations arising from the process must be determined under the regulations in force when the liquidation order was passed.A bench comprising Judicial Member Justice Yogesh Khanna, Technical Member Barun Mitra and Technical Member Ajai Das Mehrotra observed, “Thus, the subsequent...

NCLAT Upholds ₹4.37 Crore Liability On Linkson International Suspended Directors Over Round-Tripping

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld a ₹4.37 crore contribution ordered against suspended directors of Linkson International Ltd., finding that money raised through property loans was routed back to the company and its related entities.“It appears to be a crystal-clear case of round-tripping of money, and the sole purpose of it was to defraud the creditors,” the tribunal observed.Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Arun Baroka...

NCLT President Can Transfer Cases Across Territorial Jurisdictions: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi has ruled that the President of the National Company Law Tribunal (NCLT) can transfer a case from one bench to another even when the benches are in different territorial jurisdictions.The bench comprising Judicial Member Justice Sharad Kumar Sharma, Technical Member Arun Baroka and Technical Member Indevar Pandey held that Rule 16(d) of the NCLT Rules, 2016 does not restrict the President's power to transfers within the same...