NCLT's Residuary Jurisdiction Under IBC Cannot Be Used To Reopen NCLAT Findings: NCLT Ahmedabad

The National Company Law Tribunal (NCLT) at Ahmedabad has recently dismissed an application filed by Bhupendra Singh Rajput, holding that its jurisdiction under Section 60(5)(c) of the Insolvency and Bankruptcy Code cannot be used to reopen or circumvent findings of the National Company Law Appellate Tribunal (NCLAT). A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed, “The jurisdiction under Section 60(5)(c) is supervisory and residuary in nature and cannot be...

NCLT Kolkata Admits CIRP Against Saket Infra, Rules FRR Framework Cannot Bar Insolvency Proceedings

The National Company Law Tribunal at Kolkata on 17 February, held that the RBI's Framework for Revival and Rehabilitation (FRR) for MSMEs cannot override the Insolvency and Bankruptcy Code or prevent a financial creditor from initiating insolvency proceedings once default is established. A Bench comprising Judicial Member Bidisha Banerjee and Technical Member Siddharth Mishra observed that the plea of MSME protection was unsustainable in the absence of any contemporaneous MSME certificate...

Tribunal Not A 'Court' Under BNSS, Cannot Order Prosecution For False Evidence: NCLT Indore

The National Company Law Tribunal at Indore ruled that it does not have jurisdiction to initiate criminal prosecution under Sections 215 and 379 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), holding that such powers are vested only in courts and not in statutory tribunals. Section 215 bars cognisance of certain offences relating to false evidence in judicial proceedings except on a complaint by the concerned court, while Section 379 lays down the procedure for such courts to conduct an...

NCLT Bengaluru Issues Notice To HAL In ₹8.41 Crore Insolvency Plea By Ujaas Energy Over Arbitral Award

The National Company Law Tribunal at Bengaluru on Wednesday issued notice to Public Sector Undertaking Hindustan Aeronautics Limited in a petition filed by Ujaas Energy Limited, seeking initiation of insolvency proceedings under Section 9 of the Insolvency and Bankruptcy Code over an alleged default of Rs 8.41 crore arising out of an arbitral award.A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada passed the order.Ujaas Energy contended that the debt...

Financial Hardship No Ground To Reject Insolvency Plea Once Default Is Established: NCLT Jaipur

The National Company Law Tribunal (NCLT) at Jaipur has observed that financial hardship and liquidity constraints are not legally recognised grounds to reject an insolvency petition once default is established under Section 9 of the Insolvency and Bankruptcy Code, 2016. A coram of Judicial Member Reeta Kohli and Technical Member Kavita Bhatnagar admitted an application filed by Epicrop Organics Limited and initiated the Corporate Insolvency Resolution Process (CIRP) against Cropberry Foods...

NCLT Ahmedabad Denies Secured Creditor Priority To State Tax Dept. In Diamond Power Liquidation

The National Company Law Tribunal (NCLT) at Ahmedabad, has recently reiterated that priority in liquidation is governed strictly by Section 53 of the Insolvency and Bankruptcy Code (IBC), while dismissing a plea by the State Tax Officer to be treated as a secured creditor in the liquidation of Diamond Power Transformer Ltd. “The priority of claims during liquidation is governed strictly by Section 53 and no deviation is permissible based on general statutory charges created under other...

IBC Proceedings Cannot Become Evidentiary Trial: NCLT Kochi Refuses To Summon Corporate Debtor's Lessor

The National Company Law Tribunal at Kochi has recently observed that insolvency proceedings cannot be converted into a full-fledged evidentiary trial. It ruled that powers under Section 424 of the Companies Act, 2013 cannot be used to reopen the commercial evaluation undertaken by the Committee of Creditors. Dismissing an application filed by an unsuccessful resolution applicant in the insolvency process of Attukal Devi Institute of Medical Sciences Limited, Judicial Member Vinay Goel held...

NCLT Mumbai Admits CIRP Plea Against Baggit India Pvt Ltd Over ₹1.11 Crore Operational Debt

The National Company Law Tribunal (NCLT) at Mumbai had admitted an operational creditor's insolvency petition against Baggit India Private Limited, an Indian handbags and fashion accessories company over a debt of Rs 1,11,84,020.A coram of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the application filed by Sunrise Global Tradelinks was complete in all respects and that default stood established. “In our view the present Application is complete in all respect. The...

Insolvency Action Against Guarantor Inequitable When Arbitration Against Borrower Is Unsettled: NCLT Hyderabad

The Hyderabad Bench of the National Company Law Tribunal (NCLT) declined to admit a petition filed by the State Bank of India (SBI) seeking initiation of insolvency proceedings against Mallampati Madhu, the personal guarantor of TN (DK) Expressways Limited, holding that such action would be inequitable while a substantial arbitral award of Rs. 288.96 crores in its favour remains under challenge and unrealised. A Bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri...

TDS On Interest Alone Not Enough To Cross Insolvency Threshold: NCLT Chandigarh

The National Company Law Tribunal (NCLT) at Chandigarh has dismissed a Section 7 CIRP plea after holding that deduction of TDS on alleged interest cannot be treated as an acknowledgment of liability to cross the statutory threshold under Section 4 of the Insolvency and Bankruptcy Code, 2016. The Bench after relying on the NCLAT's ruling in P.M. Cold Storage Pvt. Ltd. Through Interim Resolution Professional v. Goouksheer Farm Fresh Pvt. Ltd (2022) observed,"Applying the above settled...

Corporate Debtor Liable For Electricity Dues Despite Lessee's Consumption; Privity of Contract Prevails: NCLT Chennai

Admitting a power generator's insolvency plea against its industrial consumer, the National Company Law Tribunal, Chennai, has held that a company cannot escape liability for electricity dues by claiming the power was consumed by its lessee. The tribunal ruled that liability under Section 9 of the Insolvency and Bankruptcy Code flows from privity of contract, not from actual usage of services. Rejecting AKMG Alloys Pvt Ltd's defence, the coram observed: “So long as the Corporate Debtor...

MSME Protections Must Be Invoked By Corporate Debtor, Not Personal Guarantors: NCLT Kochi

The National Company Law Tribunal, Kochi Bench, has held that benefits under the MSMED Act, 2006 and the RBI MSME restructuring framework must be specifically invoked by the corporate debtors. Personal guarantors have no independent right to claim such relief. A Bench comprising Judicial Member Vinay Goel admitted insolvency petitions filed by Tata Capital Limited against personal guarantors Jinu Varghese and Geeba Kolliyelil Jenny and declared a moratorium in their respect. He held: “This...