Section 45 Of IBC Applies To Transactions Made Prior To CIRP, Not On Date Of Initiation: NCLAT Principal Bench, New Delhi

The National Company Law Appellate Tribunal, (NCLAT), Principal Bench, New Delhi comprising of Justice Ashok Bhushan (Chairperson), Barun Mitra (Member (Technical) and Arun Baroka (Member (Technical) dismissed joint appeals filed by eight appellants against a common judgment of the adjudicating authority (NCLT, New Delhi) in various interlocutory applications (IAs) challenging the cancellation of residential unit allotments in the project developed by Corporate Debtor. Background ...

Application U/S 95 Of IBC Against Personal Guarantors Not Barred By Change In Debt Quantum After Approval Of Plan Against Corporate Debtor: 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 a change in the quantum of debt to be paid by the personal guarantor, following the approval of the resolution plan in the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor, does not negate the right of the creditors to proceed against the personal guarantor under Section 95 of the Insolvency and Bankruptcy...

Creditor Obtaining Award Directing Real Estate Firm To Not Create Third-Party Interest In Specified Units Doesn't Amount To 'Security Interest': 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 merely obtaining an arbitral award in which the corporate debtor was directed not to create any third‑party interest in specified units does not amount to creating a “security interest” within the meaning of Section 3(31) of the Insolvency and Bankruptcy Code, 2016 (Code). Therefore, a creditor relying solely on such an award...

Petition U/S 9 Of IBC Cannot Be Entertained Based On Fabricated Invoices Created To Pursue Revenge Litigation Against Corporate Debtor: 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 a Section 9 petition under the Insolvency and Bankruptcy Code, 2016 (Code) cannot be admitted when the operational creditor has used its control over the corporate debtor's affairs to fabricate invoices and drag the company into insolvency on account of personal or matrimonial disputes pending between the creditor's partners and ...

NCLAT Upholds Order Directing Suspended Directors To Repay ₹32 Lakh Which Was Withdrawn During CIRP, Imposes ₹5 Lakh Cost

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has upheld the order of the Adjudicating Authority directing the suspended directors of the Corporate Debtor to return the Rs.32 lakh along with interest they had withdrawn during Corporate Insolvency Resolution Process (CIRP). It also imposed costs of Rs.5 lakh on the respondents for repeatedly raising...

Liquidated Damages Validly Deducted During CIRP Cannot Be Refunded After Approval Of Resolution Plan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that once the Resolution Professional opted to continue the contract during Corporate Insolvency Resolution Process (CIRP), all its terms including liquidated‑damages deductions from invoices will remain binding. These deductions cannot be faulted, and no refund can be ordered after the approval...

Withdrawal Application Filed After Constitution Of CoC Must Obtain Its Approval U/S 12A Of IBC: NCLAT, Chennai

The National Company Law Appellate Tribunal, (NCLAT), Chennai comprising of Justice Rakesh Kumar Jain (Member (Judicial) and Jatindranath Swain (Member (Technical) dismissed joint appeals filed by the suspended director of Think & Learn Pt ltd and BCCI against the order of the National Company Law Tribunal, Bangalore Bench in relation the CIRP process of the corporate debtor- Think & Learn Pt ltd (Parent company of BYJU's) Background The case arises from the two appeals...

IBC | Section 12A Application Not Mandatory If No Other Creditors Are Involved & Settlement Is Reached: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson), Barun Mitral (Member-Technical), and Arun Baroka (Member-Technical), disposed of an appeal while holding that if no other claims have been received in the Corporate Insolvency Resolution Process (CIRP) and a full settlement has been reached between the parties, then it is not mandatory to file a Section 12A application under the IBC. Exercising its inherent power, the...

Merely Stamping Invoices Does Not Imply Acceptance Of Debt Without Resolution Of Pre-Existing Dispute: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that mere stamping of tax/proforma invoices at the site office by lower functionaries of the Corporate Debtor only indicates receipt and does not imply acceptance by the Corporate Debtor that there was no pre-existing dispute with respect to the quantum of the amount payable by the Corporate...

NCLT Cannot Rectify Or Amend Uploaded Order Without Hearing Affected Parties: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that once an order is uploaded on the website, it is deemed to be in the public domain. Therefore, the National Company Law Tribunal (NCLT) cannot carry out any rectification or amendment under Rule 154 of the NCLT Rules without first providing an opportunity of being heard to all affected parties. Brief Facts: ...

Adjudicating Authority Can't Presume Applicability Of Interest On Principal Amount In Absence Of Express Agreement Between Parties: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that while deciding an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code), the Adjudicating Authority cannot presume the applicability of interest based on vague statements in the invoices issued by the Operational Creditor. Unless there is a specific contract between...

Date Of Default Pleaded U/S 7 Of IBC Cannot Be Changed Automatically On Basis Of Arbitral Award Passed After Filing Application: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that the date of default mentioned in Part IV of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) cannot be changed merely on the basis that an arbitral award was passed subsequent to the filing of the application. It further held that while the arbitral award...