Liability Of Corporate Debtor Not Discharged By Release Of Guarantors' Liability If Bank Preserves Right To Proceed Under IBC: 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 the liability of the Corporate Debtor is not discharged merely because the guarantors were released from their liabilities by the Bank after One time settlement (OTS) especially when the Bank had preserved its right to proceed against the Corporate Debtor under the Insolvency and...

Govt Cannot Maintain Attachment Of Property To Press For Recovery Outside Liquidation Framework: 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 conflict between a secured creditor's statutory attachment under the Tamil Nadu Revenue Act, 1864, and the liquidation process under the IBC, 2016. The tribunal held that the government's attachment of the corporate debtor's property for recovery of tax dues cannot continue during liquidation. The bench...

Bankrupt Can File Application For Discharge After One Year, If Bankruptcy Trustee Fails To Do So: NCLAT New Delhi

The National Company Law Appellate Tribunal, Delhi held that when the Bankruptcy Trustee does not fulfil its statutory obligation under Section 138(1)(a) of the Insolvency and Bankruptcy Code, 2016, which requires the Trustee to apply for a discharge order after expiry of one year from the bankruptcy commencement date, the Bankrupt who is directly affected by continuance of the bankruptcy proceedings, can't be denied the right to approach the Adjudicating Authority and seek discharge. ...

Application U/S 7 Of IBC Withdrawn After Settlement Agreement Can Be Revived If Settlement Terms Are Breached By Corporate Debtor: NCLAT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 the right of the financial creditor to seek revival of the original application filed under Section 7 of the Code cannot be taken away merely because a settlement agreement was reached, if the corporate debtor failed to comply with the terms of the settlement agreement. The present appeal...

Belated Claims Of Homebuyers Can't Be Rejected If Their Units Are Reflected In Corporate Debtor's Records: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that claims filed by homebuyers cannot be rejected merely for being filed beyond the stipulated time period, if the homebuyer's unit is reflected in the list of homebuyers who had not filed their claims on time. The Corporate Insolvency Resolution Process (CIRP) started against the corporate debtor on 11.08.2023. The Appellant...

Fresh Application U/S 7 Of IBC Can Be Filed Upon Default Under Restructured Terms: 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 section 10A of the Insolvency and Bankruptcy Code, 2016 (IBC) does not prohibit parties from entering into an arrangement to restructure their debts during or after the section 10A period. If a restructuring agreement is executed between the parties, a fresh application under section 7 of the...

Issuance Of Second Demand Notice U/S 8 Of IBC With Significant Changes Amounts To Fresh Notice: 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 issuance of a fresh demand notice with significant changes like claimed amount, date of default etc. triggers a time line therefore if any dispute is pending between the parties before the demand notice is issued, an application under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be admitted. The present ...

Income Tax Refund Received By Bank During CIRP In Corporate Debtor's Account Cannot Be Withheld: 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 Income Tax Refund received by the bank in the corporate debtor's account during Corporate Insolvency Resolution Process (CIRP) cannot be withheld on ground and such amount must be remitted to the liquidation bank account of the corporate debtor. Corporate Insolvency Resolution Process...

Secured Creditor Is Obligated To Contribute Towards Workmen's Dues When Security Interest Is Realised Under SARFAESI Act: 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 the obligation to contribute towards workmen dues out of the realised fund cannot be avoided by the Secured Creditor when the security interest has been realised under the SARFAESI Act. Section 52(4) of the Insolvency and Bankruptcy Code, 2016 (IBC) permits a secured creditor to realise its...

Application U/S 7 Of IBC Shall Be Deemed Withdrawn If Modification Application Is Not Filed Within 30 Days: 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 failure to file a modification application under third proviso section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) within 30 days, from the date of commencement of the 2020 Amendment Act, to comply with the requirement of 100 allottees or 10% of the total unit holders shall result in the original application being...

Unadjusted Trade Advance Payable With Interest Rate Qualifies As Financial Debt U/S 5(8) Of IBC: 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 unadjusted trade advance carrying interest rate payable by the Corporate Debtor till the entire payment is made satisfies the requirement of consideration against time value of money under section 5(8) of the Insolvency and Bankruptcy Code, 2016 (IBC) therefore qualifies as a ...

Assets Of Corporate Debtor Attached Under PMLA Are Not Part Of Resolution Estate, NCLT Cannot Direct Release Even If Attached During CIRP: 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 if property is alleged to be proceeds of crime and is under adjudication by a competent authority under a penal statutes, it cannot be considered part of the freely available resolution estate under the Insolvency and Bankruptcy Code, 2016 (IBC), therefore the Enforcement ...