NCLT Mumbai Rejects Financial Creditor's Plea To Revise Vote On Reliance Broadcast Resolution Plan

The National Company Law Tribunal (NCLT) at Mumbai on Thursday rejected an application by Authum Investment and Infrastructure Limited (which acquired the claim from Reliance Commercial Finance Limited) to revise its vote from No to Yes on the approved resolution plan for Reliance Broadcast Network Limited.A coram of Judicial Member Mohan Prasad Tiwari and Technical Member Charanjeet Singh Gulati refused RCFL's plea on the ground that the voting cannot be altered once the process is...

Interim Finance Is Financial Debt Requiring 66% CoC Approval; NCLT Cannot Direct Contribution Without Such Approval: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, has recently held that the interim finance constitutes financial debt under the provisions of the IBC, 2016, and can only be raised with the approval of at least 66% of the Committee of Creditors (CoC). The tribunal held that “the term contribution is not defined in the code; hence, the contribution is nothing else but interim finance, which can be raised only with 66% voting by the CoC in compliance with the provisions of Section...

No Fresh Cause Of Action Comes Into Existence If Correct Date Of Default Is Allowed To Be Stated In Application: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Prabhat Kumar (Member-Technical) and Sushil Mahadeorao Kochey (Member-Judicial), has ruled that no fresh cause of action comes into existence if the correct date of default is allowed to be stated in the application. The application was filed by the Indian Bank, erstwhile Allahabad Bank, Applicant, under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 r/w Rule 11 of the NCLT Rules, 2016, seeking the leave to...

NCLT Mumbai Refuses To Initiate Investigation Into Former Management of 'Smaaash Entertainment'

The National Company Law Tribunal (NCLT) at Mumbai has recently refused to order an investigation into the erstwhile management of Smaaash Entertainment Private Limited, a gaming company known for its virtual reality-based entertainment centres. However, it has directed that a copy of its order be sent to government authorities to examine possible irregularities and non-compliances by the company's former management. Smaaash, which had undergone insolvency proceedings, was revived after a...

Admission Of Claim By RP Is No Defence To Preferential Transaction U/S 43 of IBC: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Shri K. R. Saji Kumar (Judicial Member) & Shri Anil Raj Chellan (Technical Member) held that just because the claim had been submitted and accepted by the Resolution Professional, it does not negate preferential transaction under section 43 of the IBC. It held that “submission of a claim by a person with the resolution professional or admission of its claim as unsecured financial creditor by the resolution professional is no...

NCLT Kochi Orders Liquidation Of Malayalam Vehicles India Pvt Ltd After CoC Fails To Receive Any Resolution Plan

The National Company Law Tribunal (NCLT), Kochi Bench, has ordered the liquidation of Malayalam Vehicles India Private Limited (a former Tata Motors passenger vehicle dealer) in furtherance to the resolution passed by the Committee of Creditors (CoC) to liquidate the corporate debtor. The bench comprising Judicial Member Vinay Goel and Technical Member Madhu Sinha observed that considering the decision taken by the COC of the Corporate Debtor, this Adjudicating Authority deems it fit...

Shareholder Advances Recorded As 'Repayable On Demand' Qualify As Financial Debt: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Sushil Mahadeorao Kochey (Judicial Member) and Prabhat Kumar (Technical Member) admitted a petition under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by Euro Corporate Services Pvt. Ltd. (formerly Distent Barter Pvt. Ltd.) against Royal Fantasy Constructions Pvt. Ltd (Corporate Debtor) holding that the loan advanced to the corporate debtor constituted a financial debt under section 5(8) of the IBC. It held...

Adjustment Of Security Deposit By Electricity Company During Moratorium Violates S.14 Of IBC: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Mohan Prasad Tiwari (Member-Judicial) and Charanjeet Singh Gulati (Member-Technical), has held that the adjustment of the security deposit by the electricity company against outstanding energy bills during the moratorium period violates the mandate of section 14 of the IBC, 2016. The CIRP of the corporate debtor was admitted, and subsequently the liquidation order was passed. The application was filed by the...

Time Spent In Voluntary Pre-Institution Mediation Cannot Be Excluded For Computing Limitation U/S 14 Of Limitation Act: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi Bench, Court-IV, comprising Manni Sankariah Shanmuga Sundaram (Member-Judicial) and Atul Chaturvedi (Member-Technical), has held that the time spent in voluntary pre-institution mediation proceedings cannot be excluded for computation of limitation under Section 14 of the Limitation Act. The operational creditor, Shiva Asphaltic Products Private Limited, supplied bitumen emulsion to the corporate debtor, Atlas Constructions Private ...

Default In Any Credit Account Leads To NPA Classification; Sufficient To Trigger CIRP U/S 7 IBC: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Sushil Mahadeorao Kochey (Judicial Member) and Prabhat Kumar (Technical Member) held that default in one of several facilities was sufficient to trigger Corporate Insolvency Resolution Process (CIRP) under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal further observed that where the debtor maintains multiple loan accounts, each account carries a separate debt obligation capable of attracting default...

Amendment Of Default Date In IBC Pleadings Is Permissible Before Final Adjudication: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Sushil Mahadeorao Kochey (Judicial Member) and Prabhat Kumar (Technical Member) admitted an insolvency petition against Vibrant Content Pvt. Ltd.(Corporate Debtor) filed by Central Bank of India holding that acknowledgment of debt in the balance sheet constitutes a valid acknowledgement under section 18 of the Limitation Act thereby extending the limitation. The Tribunal further held that “Since, a decision rendered by larger ...

Penalty Imposed By SEBI After Commencement Of Insolvency Cannot Be Admitted As Claim During CIRP: NCLT Mumbai

The NCLT, Mumbai Bench, comprising Anil Raj Chellan (Member-Technical) and K.R. Saji Kumar (Member-Judicial), has held that the penalty imposed by the SEBI post insolvency commencement cannot be admitted as a claim during CIRP. The CIRP of the corporate debtor (Medybiz Private Limited) was going on, and a moratorium was in effect. The last date of filing the claim was 22.08.2024; however, on 22.08.2024, SEBI imposed a penalty of Rs. 25 Cr. on the corporate debtor. The resolution...