Housing Society Cannot Recover Admitted Insolvency Dues From Auction Buyers: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has held that a housing society which has lodged and secured admission of its claim in a corporate debtor's insolvency proceedings cannot seek to recover the same dues directly from purchasers of the debtor's property sold during liquidation. A Bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar passed the ruling while allowing an application filed by auction purchasers Anil Patel, Kiran Patel and Madhav Patel...

NCLT Mumbai Rejects Personal Guarantor's Insolvency Plea, Says It Was Filed To Scuttle Auction Sale

The National Company Law Tribunal (NCLT) in Mumbai has rejected a personal insolvency plea filed by a personal guarantor to Heera Group companies. It observed that the application was moved after the auction of a mortgaged property and was intended to scuttle the concluded auction process initiated by Union Bank of India. A Bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar dismissed the plea filed by Vandana Ravindra Chaudhari. She had furnished personal...

NCLT Ahmedabad Admits Insolvency Plea Against Osia Hyper Retail's Personal Guarantor

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an application filed by Unity Small Finance Bank Limited and initiated insolvency resolution proceedings against Kavita Dhirendra Chopra, the personal guarantor of Osia Hyper Retail Limited. The application was filed in relation to an alleged default of Rs. 10,03,58,635. A bench of Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy observed,“The Personal Guarantee Agreement mentions that...

Tenant's Continued Occupation Cannot Defeat CIRP; NCLT Mumbai Orders Handover Of Corporate Debtor's Property

The National Company Law Tribunal (NCLT) in Mumbai has recently held that a tenant's continued occupation of a corporate debtor's property after expiry of its arrangement cannot defeat the objectives of the corporate insolvency resolution process (CIRP) or obstruct implementation of an approved resolution plan. The tribunal directed Countertops and Cabinets (India) Pvt Ltd to hand over possession of a Jaipur property owned by Krystal Stone Exports Ltd within 15 days. A Bench of Judicial Member...

Pending SARFAESI Proceedings No Ground To Reject Personal Guarantor's Insolvency Application: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has admitted an insolvency resolution application filed by a personal guarantor. It held that the pendency of recovery proceedings under the SARFAESI Act, by itself, cannot render such an application non-maintainable. A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed: “In view of the overriding effect accorded to the Insolvency and Bankruptcy Code, 2016 under Section 238, pendency of recovery...

Insolvency Plea Must Be Based On Fresh Default After Loan Account Regularisation: NCLT Mumbai

The Mumbai bench of the National Company Law Tribunal (NCLT) has held that a financial creditor cannot base an insolvency petition on a historical default that ceased to exist after the loan account was regularised, and must instead rely on a fresh default specifically pleaded in the application. Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed: “If the Corporate Debtor commits another default after the account has been regularised, a fresh Default occurs,...

NCLT Hyderabad Flags Nearly Ten-Fold Increase In Admitted Claim In CIRP, Orders Fresh Verification

The National Company Law Tribunal (NCLT) at Hyderabad has directed a fresh verification of a financial creditor's claim in the corporate insolvency resolution process of Sri Nagakrishna Chemicals Ltd. after noting a nearly ten-fold increase in the admitted claim amount. The tribunal noted that the amount reflected in the creditor's application was about ₹7.95 crore, while the amount admitted during the CIRP stood at ₹73.98 crore. A Bench of Judicial Member Rajeev Bhardwaj and Technical Member...

Redirecting RP To MCA Website Does Not Constitute Cooperation Under IBC: NCLT Indore

Merely directing a Resolution Professional (RP) to obtain information from public portals such as the MCA website and responding with "refer MCA website" or "not applicable" does not amount to cooperation during the insolvency resolution process, the National Company Law Tribunal (NCLT) at Indore has reiterated while directing the suspended management of Xyron Technologies Limited to furnish records sought by the RP. A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man...

Demand Notice Is Not Guarantee Invocation: NCLT Guwahati Rejects UCO Bank's CIRP Plea Against Personal Guarantor

The National Company Law Tribunal (NCLT) at Guwahati has rejected UCO Bank's insolvency application seeking initiation of proceedings against Mallika Barooah in relation to dues claimed from Berial Engineers Private Limited. The tribunal held that the bank failed to establish invocation of the guarantee and that the application was barred by limitation. A bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh passed the order while dealing with the bank's...

NCLT New Delhi Terminates CIRP Against Presidium & Mothers Pride Over 330-Day Delay, No Resolution Plan

On 1 June, the New Delhi Bench of the National Company Law Tribunal (NCLT) ended the insolvency proceedings against Presidium Educational Institution Pvt. Ltd. and Mothers Pride Education Personna Pvt. Ltd., after finding that the process had gone beyond the 330-day legal limit, suffered from irregularities, and did not result in any resolution plan. Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Atul Chaturvedi disposed of the CIRPs and recalled the admission orders and...

NCLT Delhi Rejects Jiostar's Insolvency Plea Against Legends League Cricket Promoter

The Delhi bench of the National Company Law Tribunal (NCLT) has recently dismissed an insolvency plea filed by Jiostar India Pvt. Ltd. against Absolute Legends Sports Pvt. Ltd., the company behind the Legends League Cricket Masters T20 tournament. The tribunal held that Jiostar failed to establish that its claim for unpaid commentary-production charges and reimbursement of Ministry of Information and Broadcasting (MIB) fees under agreements relating to the broadcast rights of the Legends League...

Financial Creditor Cannot Allege Fraud In One Forum And Enforce Same Transactions As Debt In Another: NCLT Guwahati

The National Company Law Tribunal (NCLT) at Guwahati has held that insolvency proceedings cannot be admitted mechanically where serious disputes concerning the genuineness and enforceability of the underlying debt are already pending consideration before another forum. A bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh observed, “Where the creditor itself alleges in separate proceedings that the transaction is fraudulent and constitutes wrongful trading,...