NCLT
NCLT Bengaluru Denies Interim Relief To Riju Ravindran In His Plea Against Glas Trust's Aakash Right Issue Funding Plan
The National Company Law Tribunal (NCLT) at Bengaluru on Tuesday refused to grant any interim relief in former Byju's promoter Riju Ravindran's plea challenging the Committee of Creditors' approval of a Compulsorily Convertible Debenture structure proposed by Glas Trust to fund Think and Learn Private Limited's subscription to Aakash Educational Services Limited's rights issue. The tribunal refused to grant any interim relief after having deferred its ruling on Friday, the day the rights...
Insolvency Process Can Be Withdrawn Before Formation of CoC, NCLT Chennai Reaffirms
The National Company Law Tribunal at Chennai has recently reaffirmed that a corporate insolvency resolution process (CIRP) may be withdrawn after admission but before the Committee of Creditors (CoC) is formed, while allowing the withdrawal of insolvency proceedings against Vees Properties Limited. The tribunal relied on the Supreme Court's ruling in Glas Trust Company LLC v. BYJU Raveendran, which held that withdrawal may be permitted after admission but before constitution of the CoC,...
Delay Equals Refusal, NCLT Kochi Directs Company To Transfer Shares To Legal Heir
The National Company Law Tribunal at Kochi has recently held that the prolonged delay by Whispering Kera Ecological Homestay Pvt. Ltd. in acting on a request to transmit shares of a deceased shareholder amounted to a refusal to transfer, and has directed the company to complete the transfer in favour of the surviving legal heir. The tribunal allowed the appeal filed by the shareholder's sister after finding that the company had no valid reason to withhold the transmission request. A coram of...
Bank's Adjustments From Share and Dividend Accounts During CIRP Are Void, Refundable With Interest: NCLT Ahmedabad
The National Company Law Tribunal (NCLT) at Ahmedabad has recently held that Mehsana Urban Co-operative Bank, a lender was not entitled to deduct money from the share and dividend accounts of Swastik Ceracon Limited during its insolvency process, declaring the deductions void and directing the bank to return Rs. 56 lakh with 10 per cent interest. A coram of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma held that the bank's action amounted to an unlawful recovery during a...
Insolvency Cannot Be Initiated Against Guarantor Under Section 7 Without Invoking Guarantee First: NCLT Kochi
The National Company Law Tribunal (NCLT) at Kochi recently held that a financial creditor cannot directly initiate insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016, against a corporate guarantor without first invoking the guarantee in accordance with the contract and without proceeding against the principal borrower. The tribunal therefore refused to initiate insolvency proceedings against Inditrade Capital Limited and dismissed the application filed by Arthan...
Refusal Of Demand Notice By Guarantor Counts As Valid Service: NCLT Hyderabad
The National Company Law Tribunal (NCLT) at Hyderabad has recently held that refusal by a personal guarantor to accept delivery of a demand notice constitutes valid and deemed service under the Insolvency and Bankruptcy Code, 2016, and has admitted the petition filed by STCI Finance Ltd. to initiate personal insolvency proceedings against Ramnath Nandakumar, personal guarantor of Natems Sugar Pvt. Ltd. The coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri noted...
NCLT Clears First Motion Toward Consolidation Of Mirae Asset Sharekhan's NBFC Operations
The National Company Law Tribunal (NCLT) at Mumbai has recently approved the initial application filed by Mirae Asset Sharekhan Financial Services Limited, the lending business formerly associated with stock broking company Sharekhan, for its merger with Mirae Asset Financial Services (India) Private Limited, facilitating consolidation of the Mirae Asset Group's non banking finance operations in line with Reserve Bank of India directions. A coram of Judicial Member Sushil Mahadeorao Kochey and...
Transfer Of Asset After Commencement Of CIRP, Even With NOC From Lender, Illegal: NCLT Allahabad
The National Company Law Tribunal (NCLT) at Allahabad has recently held that any transfer of assets after the commencement of an insolvency process is illegal, even if supported by a No Objection Certificate from a secured creditor. The tribunal said such transfers cannot be considered procedural outcomes and amount to a breach of the moratorium. The tribunal was deciding an application filed by the resolution professional of Hind Agro Industries Limited seeking restoration of vehicles (Porsche...
NCLT Defers Order On Riju Ravindran's Plea Against Glas Trust's Aakash Rights Issue Funding Plan; Subscription Closes Today
The National Company Law Tribunal at Bengaluru on Friday deferred its order on former Byju's promoter Riju Ravindran's interim plea challenging the Committee of Creditors' approval of a Compulsorily Convertible Debenture structure proposed by Glas Trust to fund Think and Learn Private Limited's (Byju's) participation in Aakash Educational Services Limited's ongoing rights issue. A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada will now pronounce the...
NCLT Approves Piramal Fund's Move to Set Off Losses With Rs 200-Crore Securities Premium
The National Company Law Tribunal at Mumbai on Monday approved Piramal Fund Management Pvt. Ltd.'s plan to utilise Rs 200 crore (Rupees Two Hundred Crore Only) from its Securities Premium Account to wipe out accumulated losses, clearing the company's capital-reduction proposal under the Companies Act. A coram of Judicial Member KR Saji Kumar and Technical Member Anil Raj Chellan recorded that “neither any objector has come before this Tribunal to oppose the Scheme nor has any party controverted...
Security Deposit Is Not Operational Debt; Non-Refund Cannot Trigger CIRP: NCLT Delhi
The National Company Law Tribunal (NCLT) at Delhi has recently ruled that the non-refund of a contractual security deposit meant only as collateral cannot be treated as operational debt and cannot be used to initiate corporate insolvency proceedings. A coram of Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh said the security deposit paid in this case “as collateral security, held exclusively to ensure performance and execution of delivery obligations in the...
Date Of Default For Guarantors Is When Guarantee Is Invoked, Not When Loan Turns NPA: NCLT Mumbai
The National Company Law Tribunal at Mumbai has recently held that the date of default for a personal guarantor starts from the date on which the guarantee is invoked, and not from the date on which the borrower's loan account is declared a non performing asset, adding that a notice issued under the SARFAESI Act may be considered for determining this date. A coram of Judicial Member K R Saji Kumar and Technical Member Anil Raj Chellan made the finding while hearing a personal insolvency...