Moratorium Under Section 14 IBC Does Not Protect Personal Guarantors: NCLT Chandigarh

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 18 March held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not extend to personal guarantors of a corporate debtor and therefore allows creditors to continue proceedings against them even during the pendency of the corporate insolvency resolution process (CIRP). A Bench comprising Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal admitted insolvency petitions filed...

Liability For Fraudulent Trading Under IBC Cannot Be Determined Mechanically: NCLT Amaravati

The National Company Law Tribunal (NCLT), Amaravati, has held that liability for fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code cannot be determined through a mechanical or formula-based approach and must instead rest on a detailed examination of financial records and transactions.A Bench of Judicial Member Kishore Vemulapalli and Technical Member Umesh Kumar Shukla observed that fixing liability based merely on contractual percentages or competing claims without...

NCLT Ahmedabad Rejects Time-Barred Voluntary Insolvency Plea By Personal Guarantor, Flags Attempt To Stall Recovery

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has dismissed a voluntary insolvency application by a personal guarantor (Section 94 of the Insolvency and Bankruptcy Code, 2016), holding that the plea was barred by limitation and filed with the intent to stall recovery proceedings under the SARFAESI Act. The bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed: “The timing of the present application, coupled with the fact that the Personal Guarantor...

NCLT Chandigarh Rejects Omkara ARC's Claim In Vikas WSP CIRP, Holds Creditors Cannot Override IBC Timelines

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 10 March dismissed an application filed by Omkara Assets Reconstruction Pvt. Ltd. seeking admission of its claim as a secured financial creditor in the corporate insolvency resolution process (CIRP) of Vikas WSP Ltd. A Bench comprising Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh held that the claim, filed 1,267 days after the prescribed deadline and after the Committee of Creditors (CoC)...

PMLA Attachment Does Not Suspend Liquidator's Duty To Preserve Corporate Debtor's Assets: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has recently observed that a liquidator's obligation to preserve and protect assets forming part of the liquidation estate continues despite attachment under the Prevention of Money Laundering Act (PMLA), so long as such assets are not confiscated.A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Sanjiv Dutt was dealing with an application filed by Kohinoor City Office Towers Industrial Estate & Premises Co-operative...

Sole Financial Creditor Can't 'Jump In and Out' Of CIRP; No Claim Withdrawal After CoC Entry: NCLT Mumbai

Holding that a sole secured financial creditor cannot ''jump in and jump out" of the corporate insolvency resolution process (CIRP), the National Company Law Tribunal (NCLT) at Mumbai emphasised that such conduct would undermine the scheme and objectives of the Insolvency and Bankruptcy Code (IBC).A bench of Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan was hearing an application filed by SREI Equipment Finance Ltd. seeking withdrawal of its claim and exit from the...

NCLT Bengaluru Gives Ola Electric 4 Weeks For Objections In ₹9.84 Crore Insolvency Case With Anevolve

On Monday, 6 April, the Bengaluru Bench of the National Company Law Tribunal (NCLT) heard an insolvency petition filed by Anevolve Mando Emobility Pvt Ltd against Ola Electric Technologies Pvt Ltd under Section 9 of the Insolvency and Bankruptcy Code, over an alleged operational debt of Rs. 9.84 crore arising from the supply of motors.Before a Bench comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada, Anevolve stated that it had issued a demand notice under...

NCLT Allahabad Confirms Flat Possession To Renaissance Realty, Orders ₹1 Crore To JAL Insolvency Estate

The Allahabad Bench of the National Company Law Tribunal (NCLT), while deciding an application filed by Renaissance Realty, acknowledged that the applicant had already received possession of a flat in the Jaypee Greens Kalypso Court project. A Bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma also ordered that Rs. 1 crore recovered under RERA proceedings be returned to the insolvency estate of JAL. It observed: “In the circumstances of the present case, since the...

Operational Creditors Cannot Seek Resolution Plan Disclosure At Pre-Approval Stage: NCLT Ahmedabad In JAL CIRP

The Allahabad Bench of the National Company Law Tribunal (NCLT) has recently held that operational creditors cannot seek disclosure of a resolution plan or liquidation value at the pre-approval stage under the Insolvency and Bankruptcy Code while rejecting a plea arising out of the insolvency of JaiPrakash Associates Limited.Notably, The resolution plan for the company was approved on March 17 in separate proceedings and is under challenge before the National Company Law Appellate Tribunal.A...

NCLT Ahmedabad Keeps MAHAGENCO's Termination Of Gensol's ₹292.5 Crore EPC Contract Inoperative During CIRP

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) has held that Maharashtra State Power Generation Company Limited's (MAHAGENCO) termination of Gensol Engineering Limited's Rs 292.5 crore EPC contract will remain inoperative during the company's insolvency process. The order by a bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma came on an application filed by Resolution Professional Keshav Khaneja, who sought to restrain MAHAGENCO from giving effect to the...

Purchaser Cannot Avoid Liabilities Voluntarily Accepted At Auction: NCLT Hyderabad

The Hyderabad Bench of the National Company Law Tribunal (NCLT) on 11 March, held that a purchaser of assets in a liquidation auction cannot resile from liabilities voluntarily accepted at the time of purchase, including outstanding electricity dues. A Bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri dismissed the application filed by Sri Lakshminarasimha Oil Mills Pvt Ltd, and refused to direct the Northern Power Distribution Company of Telangana to grant a...

Abstention Not Consent: NCLT Ahmedabad Rejects Archon Engicon Guarantors' Resolution Plan For Failing 75% Vote

The National Company Law Tribunal (NCLT) at Ahmedabad has recently held that abstention by creditors cannot be treated as consent while voting on a repayment plan under the Insolvency and Bankruptcy Code, 2016, and rejected a proposal submitted by personal guarantors for failing to meet the mandatory voting threshold. A coram of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma found that the plan received only 21.35% votes in favour, while 20.14% voted against, 42.60% of the...