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...

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...