Adjudicating Authority Not Justified In Rejecting Plan Based On Valuation Report When No Objections Were Raised By Stakeholders: 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 when no objection to the valuation conducted of the Corporate Debtor was raised by any stakeholders, it was not open for the Adjudicating Authority to enter into the issue of valuation of assets of the Corporate Debtor and to make the said ground for rejecting the Resolution Plan under...

Execution Of Fresh Personal Guarantee Post-Restructuring Bars Initiation Of Insolvency Process U/S 95 Of IBC Against Personal Guarantor: 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 when the lenders restructured their debts and extinguished prior security interests by obtaining a fresh personal guarantee from the Personal Guarantor, the Appellant cannot invoke the earlier guarantee to initiate personal insolvency proceedings under section 95 of the Insolvency and...

Gratuity With Interest Qualifies As Operational Debt U/S 5(21) 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 claim for gratuity along with interest falls within the definition of operational debt; therefore, an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code) based on such a claim, is fully maintainable. Brief Facts: An application filed under section 9 of the Code by R-1 Devi Prasad came to be...

NCLT Can Exercise Inherent Powers To Forward A Copy Of Its Order To Relevant Statutory Authorities For Necessary Action: 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) that the National Company Law Tribunal (NCLT) in exercise of its inherent jurisdiction under Rule 11 of the NCLT Rules, 2016, may direct that a copy of its order be forwarded to relevant statutory authorities for necessary action. It further held that however, any investigation by the Serious Fraud...

Interim Resolution Professional Is Empowered To Take Possession Of Assets Owned 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 Interim Resolution Professional (IRP) is well within his authority under Section 18(1)(f) of the Insolvency and Bankruptcy Code, 2016 (Code) to take possession of assets owned by the Corporate Debtor, and filing an application before the Adjudicating Authority under Section 60(5) of the Code...

Majority's Consideration Of Debt Restructuring With Corporate Debtor Does Not Bar Individual Member From Filing Petition U/S 7 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 fact that a majority of consortium lenders are considering debt restructuring with the Corporate Debtor does not preclude an individual member from independently initiating insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) as per the facility agreement. Brief Facts: The...

State Entitled To Secured Creditor Status Under IBC Due To Statutory Charge Created U/S 48 Of GVAT Act: 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 after completion of the assessment of the Corporate Debtor under Gujarat Value Added Tax (GVAT) Act before Corporate Insolvency Resolution Process (CIRP), a charge in view section 48 of the GVAT Act is created by operation of law on the property of the Corporate Debtor in favour of the State Tax Officer therefore the dues...

Mere Filing Of Closure Application By Liquidator Does Not Bar Tribunal's Inherent Powers To Modify Orders: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), allowed an appeal by modifying an order passed by the Adjudicating Authority (NCLT, Chennai). The NCLAT held that the mere fact that the liquidator has filed an application for closure of the liquidation proceedings does not curtail the tribunal's right to exercise inherent powers for meeting the ends of justice,...

Demand Notice Served On Registered Email Address Of Corporate Debtor Sufficient To Satisfy Requirement U/S 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 the issuance of a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code) to the registered email address of the corporate debtor, as reflected in the Company Master Data, is sufficient to meet the requirements of Section 8 of the Code. Brief Facts: An...

Inadvertent Typographical Errors In Orders Passed By NCLT Can Be Corrected Under Rule 154 Read With Rule 11 Of NCLT Rules: 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 inadvertent typographical errors in the orders passed by the National Company Law Tribunal (NCLT) can be corrected by exercising its powers under Rule 154 read with Rule 11 of the NCLT Rules, 2016. It further held that correcting such errors will not amount to review of the order. Brief...

Interest On Unilateral Invoices For Delayed Payment Doesn't Constitute Operational Debt In Absence Of Contractual Clause: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Member-Technical), and Arun Baroka (Member-Technical), has dismissed an appeal arising out of a decision by the NCLT, Chandigarh Bench-I. The bench held that in the absence of any contractual clause, interest on the unilateral invoices for the delayed payment cannot form part of the operational debt. The bench also ruled that the interest based on...

Application For Approval Of Resolution Plan Can't Be Rejected Solely Based On Withdrawal Of Consent By One Of Coc Members: 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 an application seeking approval of a Resolution Plan, approved by an overwhelming majority of 98.15%, cannot be rejected solely due to the withdrawal of consent by one Committee of Creditors (CoC) member without granting the Successful Resolution Applicant (SRA) an opportunity to be heard. Brief Facts: This is an...