NCLAT Sets Aside Liquidator Appointment After NCLT Overlooked CoC's Recommendation

The National Company Law Appellate Tribunal (NCLAT) at Delhi has ruled that an adjudicating authority cannot appoint a liquidator without considering the Committee of Creditors' (CoC) unanimous recommendation. It set aside an NCLT order that independently appointed an insolvency professional from an IBBI panel instead of considering the CoC's choice.A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Members Arun Baroka and Indevar Pandey observed that Section 34(1) of the...

NCLAT Stays NCLT Order Upholding Rejection Of ARCIL's ₹3,482 Crore Claim Against JCT

The National Company Law Appellate Tribunal (NCLAT) has recently kept in abeyance a National Company Law Tribunal (NCLT) order that upheld the Resolution Professional's rejection of Asset Reconstruction Company (India) Ltd.'s (ARCIL) financial claim against textile manufacturer JCT Ltd. The appellate tribunal observed that the issue of limitation must be decided before the committee of creditors (CoC) votes on a resolution plan.A bench of officiating Chairperson Justice Yogesh Khanna and...

NCLAT Dismisses DoT Appeal Against Rolta India Resolution Plan, Cites Its Implementation

The National Company Law Appellate Tribunal (NCLAT) on Thursday dismissed the Department of Telecommunications' (DoT) appeal challenging the National Company Law Tribunal's (NCLT) approval of the ₹900 crore resolution plan for Rolta India Limited.It held that once a resolution plan has been approved and fully implemented, statutory creditors cannot seek to reopen claims they failed to pursue in time.A bench of Judicial Member Justice Yogesh Khanna and Technical Members Barun Mitra and Ajai Das...

Operational Creditor Cannot Use Conflicting Debt Documents To Extend Limitation: NCLAT New Delhi

The New Delhi National Company Law Appellate Tribunal (NCLAT) on 29 July held that an operational creditor cannot invoke insolvency proceedings by relying on inconsistent documents regarding the debt claimed and simultaneously seek to treat those documents as an acknowledgement of liability to extend the limitation period under Section 18 of the Limitation Act, 1963. A Bench comprising Judicial Member Justice N Seshasayee and Technical Member Arun Baroka dismissed the appeal filed by Sturdy...

Easement Right Disputes Affecting Liquidation Fall Within NCLT's Jurisdiction: NCLAT New Delhi

The New Delhi National Company Law Appellate Tribunal (NCLAT) on 29 July held that the National Company Law Tribunal (NCLT) can decide disputes over an easementary right of way under the Insolvency and Bankruptcy Code, 2016 (IBC) where the dispute has a direct connection with the corporate insolvency resolution process or liquidation and affects value maximisation of the corporate debtor's assets. A 2:1 Bench comprising Technical Members Arun Baroka and Indevar Pandey, constituting the...

NCLAT Stays IBBI Order Barring Insolvency Professional From Other CIRPs Despite Alleged Misconduct In One Case

The National Company Law Appellate Tribunal (NCLAT) in Delhi has recently stayed the operation of the Insolvency and Bankruptcy Board of India's (IBBI) order suspending an insolvency professional from continuing in his other ongoing assignments, while leaving the suspension undisturbed in the corporate insolvency resolution process (CIRP) from which he had been removed. The interim relief allows him to continue in his other assignments pending adjudication of his appeal. Judicial Member...

One Partner's Signature Is Sufficient For Firm's Insolvency Plea If Majority Of Partners Approve: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has recently clarified that where a majority of partners has decided to initiate insolvency proceedings, the petition need not be signed by all of them, as one partner may act on behalf of the firm under the Partnership Act. The tribunal, however, dismissed the appeal before it after holding that the insolvency application was barred by limitation.A bench of Judicial Member Justice N. Seshasayee and Technical Member Arun Baroka made the...

Dismissal Of DRT Recovery Case For Default Does Not Bar Insolvency Proceedings Against Personal Guarantor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) in Delhi has held that the dismissal of a debt recovery case for default does not wipe out the underlying debt or prevent insolvency proceedings against a personal guarantor. It dismissed an appeal filed by a personal guarantor challenging the National Company Law Tribunal's (NCLT) order admitting the Bank of Maharashtra's application. A bench of Judicial Member Justice N. Seshasayee and Technical Member Indevar Pandey observed: “Dismissal...

Gratuity Payable To Retiring Employee Cannot Be Equated With Salary, Not Part Of CIRP Costs: NCLAT

The National Company Law Appellate Tribunal (NCLAT) in Delhi has held that gratuity payable to an employee who retires during the corporate insolvency resolution process cannot be treated as part of the insolvency resolution process costs. It held that gratuity is a terminal benefit and not an expense incurred by the Resolution Professional (RP) in running the insolvency process.A bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey upheld an order...

Pending Compromise Scheme No Bar To Insolvency Proceedings: NCLAT

The National Company Law Appellate Tribunal (NCLAT) in Delhi has held that a proposed scheme of compromise under the Companies Act and ongoing one-time settlement (OTS) negotiations cannot prevent the admission of insolvency proceedings once financial debt and default are established.A bench of Judicial Member Justice N. Seshasayee and Technical Members Arun Baroka and Indevar Pandey held that the National Company Law Tribunal (NCLT) was justified in admitting insolvency proceedings against...

CoC-Approved Valuation Cannot Be Reopened At Instance Of Suspended Director: NCLAT New Delhi

The New Delhi Bench of the National Company Law Appellate Tribunal (NCLAT) on 14 July held that a suspended director cannot seek fresh valuation of a corporate debtor's assets after the Committee of Creditors (CoC) has approved the valuation reports and the resolution plan. Valuation decisions fall within the CoC's commercial wisdom. Judicial Member Justice Mohd Faiz Alam Khan and Technical Member Naresh Salecha dismissed appeals filed by Santosh R. Shetty, suspended director and promoter of...

NCLAT Dismisses Jaypee Greens Homeowners' Appeals Seeking Social Club Condition In JAL Resolution Plan

The National Company Law Appellate Tribunal (NCLAT) in Delhi has dismissed appeals filed by the Association of Independent House Owners of Jaypee Greens, refusing to interfere with an order declining to direct the inclusion of a mandatory condition in Jaiprakash Associates Ltd's resolution plan for the construction of a social club. The appellate tribunal noted that the resolution plan had already been approved. It also took note of the Successful Resolution Applicant's (SRA) undertaking to...