Petition U/S 7 Of IBC Can't Be Entertained During Moratorium Period Under Accepted Restructuring Proposal: NCLAT

The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that once the debenture holders have acted upon the restructuring proposal given by the Corporate Debtor, which included a moratorium on its repayment obligations, they cannot be permitted to file an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code), until the expiry of the moratorium period proposed under the ...

Mortgagee Bank Cannot Seek Exclusion Of Property From Resolution Plan Approved By Unit Holders Having Conveyance Deeds: 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 bank in whose favor mortgage rights were created over the property of the Corporate Debtor cannot seek exclusion of the property from the Resolution Plan, especially when the unit holders, possessing either a conveyance deed or builder-buyer's agreements, have approved the Resolution Plan.Brief...

Written Acknowledgment Of Debt Extends Limitation Period For Insolvency Application: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Yogesh Khanna (Member-Judicial) and Mr. Ajai Das Mehrotra (Member - Technical), disposed of an appeal arising from an order passed by the NCLT New Delhi. The bench held that by virtue of Section 18 of the Limitation Act, the written acknowledgment of debt extends the limitation period for initiating the CIRP under Section 9 of the IBC, 2016. The bench observed that the limitation will be...

Limitation Period For Filing Appeal Begins From Date Of Pronouncement If Substantive Order Is Passed: 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 it is only when no substantive order is passed on the date of pronouncement that the date of uploading the order shall be considered for calculating the limitation period, and not the date of pronouncement. However, this principle cannot be invoked when a substantive order was, in fact,...

Conversion Of Partner's Dues Into Loan Does Not Qualify As Financial Debt U/S 5(8) Of IBC: 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 conversion of partners' dues against the partnership firm into a loan cannot become a financial debt merely because the dues were assigned at the time the partnership firm was converted and registered as a Limited Liability Partnership (LLP). It further held that at the time the debt arose, ...

Provident Fund Claims Filed After Approval Of Resolution Plan By Committee Of Creditors Cannot Be Admitted By Resolution Professional: 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 statutory obligations must be fulfilled during insolvency proceedings; however, this does not mean that statutory dues including provident fund claims can be submitted even after the Resolution Plan has been approved by the Committee of Creditors (CoC). Therefore, the Resolution Professional...

NCLT May Waive Eligibility Criteria U/S 244(1)(b) Of Companies Act When Allegations Of Oppression & Mismanagement Are Not Previously Adjudicated: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that when there are internal differences among the members of a company and repeated allegations of oppression and mismanagement have been raised by some members, which have not been previously adjudicated, the eligibility criteria prescribed under Section 244(b) of the Companies Act, 2013 (Companies Act) required for filing...

Resolution Professional Can File Liquidation Application U/S 33 Of IBC If CIRP Period Expires Without Approved Resolution Plan: 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 when the extended Corporate Insolvency Resolution Process (CIRP) period has expired and no resolution plan has been approved, it is incumbent upon the Resolution Professional to file an application for the liquidation of the corporate debtor. A discussion regarding the filing of a liquidation application and the...

No Right To Be Heard Can Be Given At Stage U/S 99 Of IBC, Resolution Professional's Role Is Only Recommedatory And Not Adjudicatory: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that no opportunity of being heard is required at the stage when a report under Section 99 of the Insolvency and Bankruptcy Code, 2016 (Code) is submitted, as the role of the Resolution Professional at this stage is merely to assist the Adjudicating Authority in deciding whether the application should be accepted or...

When Acknowledgment Of Debt By Repeated One-Time Settlement Proposals Is Not Controverted, Petition U/S 7 Of IBC Can Be Entertained: 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 when no contrary facts are presented by the Corporate Debtor to the arguments advanced by the Financial Creditor that multiple One Time Settlement (OTS) proposals made by the Corporate Debtor extended the limitation period with each new proposal, it cannot be contended that an...

Petition U/S 7 Of IBC Can Be Entertained For Default On Interest Component Of Loan If It Occurs After Section 10A Period: 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 an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code), can be entertained based on the default in the interest component committed after the prohibited period under Section 10A of the Code, provided that the threshold limit of Rs. 1 crore under Section 4 of the Code is met. Brief Facts: ...

Hire Charges Cannot Be Calculated In CIRP Costs When Asset Is Not Used by Corporate Debtor: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Ashok Bhushan (Chairperson), Barun Mitra (Member - Technical), and Arun Baroka (Member - Technical), dismissed an appeal arising from an order by the NCLT Mumbai. The tribunal held that the hire charges for the assets not used by the corporate debtor during the CIRP cannot be classified as CIRP costs under Regulation 31(b) of the CIRP Regulations. Background CIRP of the corporate...