NCLAT Says COVID Limitation Ruling Not Properly Considered In Encore ARC's CIRP Against Pandhe Constructions

The National Company Law Appellate Tribunal (NCLAT) has set aside an order of the NCLT Mumbai bench that had dismissed a CIRP plea filed by Encore Asset Reconstruction Company Pvt Ltd against Pandhe Constructions Pvt Ltd as time-barred. The appellate tribunal held that the NCLT misapplied the Supreme Court's COVID-19 limitation directions and failed to properly consider acknowledgment of debt under Section 18 of the Limitation Act. A bench of Judicial Member Justice Mohd. Faiz Alam Khan and...

Authorisation, Stamping, and IU Defects Cannot Block Insolvency Petition: NCLAT Delhi

On 6 February, the National Company Law Appellate Tribunal (NCLAT) at Delhi held that defects in authorisation, stamping, and Information Utility records cannot invalidate a Section 7 insolvency petition when the debt and default are acknowledged by the corporate debtor. A Bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey dismissed the appeal of Vinodkumar Nihalchand Parmar, which challenged an NCLT Mumbai Bench order admitting the...

Limitation For IBC Appeal Runs From Pronouncement Date, Not Knowledge: NCLAT Dismisses CIRP Appeal

The National Company Law Appellate Tribunal (NCLAT) at Delhi has dismissed an appeal challenging the admission of Corporate Insolvency Resolution Process (CIRP) against a private company as time-barred. It held that the limitation under Section 61(2) of the Insolvency and Bankruptcy Code runs from the date of pronouncement of the order, not from the date of knowledge. A bench of Judicial Member Justice Ashok Bhushan and Technical Member Barun Mitra observed: “For counting the statutory period...

NCLAT Sets Aside Insolvency Process Against HNGIL Guarantor, Says Compromise Didn't Waive Guarantee Invocation

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently set aside the NCLT Kolkata's order admitting DBS Bank's Section 95 application against Mukul Somany, a personal guarantor of Hindustan National Glass & Industries Ltd, holding that the bank had not invoked the guarantee before initiating insolvency proceedings. The appellate tribunal reiterated that where a guarantee deed requires a demand by the lender, invocation of the guarantee is a mandatory pre-condition before...

CoC Members Entitled Only To Fair And Liquidation Value, Not Full Valuation Reports: NCLAT Chennai

The National Company Law Appellate Tribunal at Chennai has recently observed that a resolution professional is not required to share full valuation reports with lenders (CoC) during insolvency proceedings. The tribunal referred to Regulation 35(2) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which provides that after receipt of resolution plans, the resolution professional shall provide the fair value and the liquidation value to members of the Committee...

Operational Creditor Cannot Vote on Its Own Resolution Plan; Such Approval A “Material Irregularity” Under IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that a resolution applicant who is not a financial creditor cannot vote on and approve its own resolution plan, declaring such approval void ab initio as it violates Section 30(5) of the Insolvency and Bankruptcy Code, 2016. The ruling was delivered by a bench comprising Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey. The tribunal observed, “In the present case the Resolution...

NCLAT Affirms NCLT New Delhi Order Rejecting Insolvency Plea Against Bajaj Appliances

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has recently dismissed an insolvency plea against Bajaj Appliances Ltd., holding that a pre-existing dispute barred initiation of proceedings under the Insolvency and Bankruptcy Code. A coram of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka upheld the National Company Law Tribunal, Delhi's October 18, 2023, order rejecting the application filed by T.J. Communication Pvt. Ltd. T.J. Communication claimed it...

Failure To Issue Notice Is “Larger Than An Ordinary Procedural Breach”: NCLAT Sets Aside Ex Parte NCLT Order

An ex parte order passed without issuing notice cannot be sustained, the National Company Law Appellate Tribunal (NCLAT) has held, setting aside a Mumbai NCLT order that had allowed a preferential transaction application in the liquidation of Euro Ceramics Ltd. A bench of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka said that omission to direct notice is larger than some procedural breach.“It is only when notice is directed on any application or petition, the tribunal...

NCLT Need Not Separately Examine RP's Opinion On PUFE Transactions While Avoidance Pleas Are Pending: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has held that the issue of formation and determination of opinion by a resolution professional in respect of preferential, undervalued, extortionate, and fraudulent (PUFE) transactions cannot be examined at the threshold level on a stand-alone basis while the avoidance applications are pending consideration before the adjudicating authority. A bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra...

NCLAT Says Timing Of Stamp Paper Purchase And Loan Agreement Execution Not Ground To Reject Insolvency Plea

Holding that the purchase of stamp paper and subsequent execution of a loan agreement cannot be any relevant consideration for rejecting a CIRP plea, the National Company Law Appellate Tribunal at Delhi has set aside the dismissal of an insolvency plea. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed, “The observation of the Adjudicating Authority that the stamp paper was purchased on 12.02.2025 and agreement was executed on 01.03.2025 can not be any...

NCLAT Holds Debt Not Time Barred In Rajeshwari Cotspin CIRP, Says Threshold Cannot Be Confined to Last Invoice

Holding that the claim was not time barred and that all the invoices had to be considered for determining the statutory threshold, the National Company Law Appellate Tribunal dismissed an appeal against the admission of insolvency proceedings against Rajeshwari Cotspin Ltd. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra observed, “Thus, threshold has to be determined on basis of the invoices taking all the invoices and cannot confine to only last invoice of Rs. 19...

NCLAT Finds IndusInd Bank, RTA Negligent In Issuing Duplicate Share Certificates, Upholds Restoration Of 5,000 Shares

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently upheld the restoration of 5,000 equity shares of IndusInd Bank to their original holder, holding that the bank and its Registrar and Transfer Agent acted negligently in issuing duplicate share certificates to a third party. A bench of Judicial Member Justice Yogesh Khanna and Technical Member Ajai Das Mehrotra observed, “We note that the Appellant was negligent and had not followed the due procedure in issue of duplicate...