Interest Mentioned In Unsigned Invoice Cannot Be Included In Calculation Of Threshold Limit U/S 4 Of IBC: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Rakesh Kumar Jain, Member (Judicial), Mr. Naresh Salecha, Member (Technical) and Mr. Indevar Pandey, Member (Technical), dismissed an appeal arising from an order by the NCLT Chandigarh. The tribunal held that the interest specified in an unsigned invoice cannot be included in the calculation of the debt for the purpose of meeting the threshold limit under Section 4 of the IBC. ...

Lenient Approach To Be Adopted While Condoning Delay In Refiling, But Sufficient Cause Must Be Shown: 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 a lenient approach has to be adopted by the court while condoning the delay in refiling the appeal; however, sufficient cause must still be shown before the application for condonation of delay in refiling the appeal can be allowed. Brief Facts: Challenging the order dated 04.08.2023...

Ten-Day Time Period U/S 99 Of IBC For Submission Of Report By Resolution Professional Is Directory, Not Mandatory: 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 10-day period provided under Section 99 of the Insolvency and Bankruptcy Code,2016 (Code) within which the Resolution Professional has to submit the report after appointment, cannot be considered mandatory, as no consequences are prescribed in the provision itself for failure to submit...

Service Of Notice On Email Provided In Section 7 Petition Constitutes Sufficient Compliance With Rule 38(1) Of NCLT Rules: 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 service of notice on the email address provided in the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) constitutes sufficient compliance with Rule 38(1) of the NCLT Rules. Brief Facts: Bank of Baroda (BoB) sanctioned a credit facility on 03.09.2024 to Our Company Infrastructure ...

Petition U/S Section 7 Of IBC Cannot Be Entertained Based On Guarantee Invoked During Prohibited Period U/S 10A Of IBC: 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 liability of the guarantor arises only when the guarantee executed by them in favor of the creditor is invoked. If such guarantee was invoked during the period prohibited under Section 10A of the Insolvency and Bankruptcy Code, 2016 (the Code), an application under Section 7 of the Code cannot be maintained. Brief Facts: ...

NCLAT Upholds Liquidation Of Go Airlines, Permits Submission Of Compromise/Arrangement Within 90 Days Of Liquidation Order

The National Company Law Appellate Tribunal (NCLAT), New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) have held that the Committee of Creditors (CoC), acting under its commercial wisdom and in accordance with Section 33(2) of the Insolvency and Bankruptcy Code, 2016, was within its rights to resolve to liquidate the Corporate Debtor, Go Airlines (India) Ltd., in the absence of any compliant resolution plan. The...

Dissenting Financial Creditors Are Entitled To Receive Payments On Pro-Rata Basis Of Resolution Plan Value Rather Than Liquidation Value: 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 dissenting financial creditors are entitled to receive payments on a pro-rata basis of the Resolution Plan rather than the liquidation value. Further, it was held that priority in payment means that whenever the Successful Resolution Applicant remits the amount in installments, the dissenting financial creditors ...

Breach Of Settlement Agreement Does Not Preclude Financial Creditors From Filing Application U/S 7 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 financial creditors are not precluded from filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code), merely because they have entered into a settlement agreement with the corporate debtor that was subsequently breached. The nature of the debt remains unchanged,...

Adjudicating Authority Cannot Accept Report Of Resolution Professional Mechanically, Must Conduct Independent Assessment U/S 100 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 the Adjudicating Authority, while considering the report of the Resolution Professional submitted under Section 99 of the Insolvency and Bankruptcy Code, 2016 (Code), must conduct its own independent assessment to determine whether all essential issues required for accepting or rejecting the...

All Assets Reflected In Balance Sheet Of Corporate Debtor Form Part Of Liquidation Estate U/S 36 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that all assets reflected in the balance sheet of the Corporate Debtor form part of the liquidation estate under Section 36 of the Insolvency and Bankruptcy Code, 2016 (Code) and cannot be distributed to creditors outside the framework prescribed under Sections 52 and 53 of the Code. If any asset of the Corporate Debtor has been...

Appeal U/S 61 Of IBC Is Maintainable Against Order Passed By NCLT Initiating Insolvency Process Against Personal Guarantors: 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 An appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 (Code) can be filed by personal guarantors against an order passed by the Adjudicating Authority under Section 100 of the Code, directing the initiation of the Personal Insolvency Resolution Process (PIRP), as the National...

Adjudicating Authority Cannot Suo Moto Amend Date Of Default In Insolvency Application Unless Amendment Application Is Filed: 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 Adjudicating Authority cannot suo moto amend the date of default mentioned in the insolvency application unless an amendment application is filed; otherwise, it would tantamount to exceeding its jurisdiction, which is not permissible in law. Brief Facts: A petition under section 9...