Fixed Deposit Receipts Form Part Of Corporate Debtor's Financial Assets, RP Can Seek Their Defreezing & Take Custody: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Manni Sankariah Shanmuga Sundaram (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that Fixed Deposit Receipts (FDRs) form part of the Corporate Debtor's financial assets; therefore, the Resolution Professional can approach the concerned bank to seek their defreezing and realise them. The present application has been filed under section 60(5) of the Insolvency and Bankrutpcy Code,...

Resolution Professional Can't Cherry-Pick Entries From Financial Records Of Corporate Debtor While Verifying Claims Of Creditors: NCLT New Delhi

The National Company Law Tribunal (NCLT), New Delhi Bench of Shri Manni Sankariah Shanmuga Sundaram (Hon'ble Member Judicial) and Shri Atul Chaturvedi (Hon'ble Member Technical) has held that the Resolution Professional is obligated to verify the claims of creditors after considering all entries in the financial records of the corporate debtor. The RP cannot cherry-pick entries and reject others that favour the creditors, as such an approach violates the principles of fairness and...

Corporate Debtor May Be Permitted To Complete Project Under IRP's Supervision If A Structured Plan Is Proposed: NCLT Indore

The National Company Law Tribunal (NCLT), Indore Bench of Sh. Shammi Khan (Judicial Member) and Sh. Sanjeev Sharma (Technical Member) has held that while admitting a petition under Section 7 of the IBC filed by homebuyers based on the default committed by the corporate debtor, the corporate debtor can be directed to complete the project under the reverse Corporate Insolvency Resolution Process (CIRP) model, under the supervision of the Interim Resolution Professional, if a structured and...

Interest Claims Under MSMED Act Can't Be Added To Principal Amount: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench of Justice V. G. Bisht (Retd.) (Judicial Member) and Sh. Prabhat Kumar (Technical Member) has held that since the NCLT under the IBC is not competent to adjudicate interest claims under the MSMED Act, such interest claims cannot be added to the principal amount to meet the threshold limit for filing an insolvency petition. The present application has been filed under section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC)...

Property Alloted In Lieu Of Consultancy Fees Constitutes Financial Debt: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, Court-V, comprising Sh. Sushil Mahadeorao Kochey (Member- Judicial) and Sh. Charanjeet Singh Gulati (Member- Technical), has held that a property allotted in lieu of consultancy fees can be considered as a financial debt. The application was filed requesting to issue a direction to the Resolution Professional to admit the claim filed by the applicant in the class of financial creditor. The applicant claimed that it provided income-tax...

Debt Arising From Structured Supply Chain Finance Facility Does Not Constitute 'Financial Debt' U/S 5(8) Of IBC: NCLT New Delhi

The National Company Law Tribunal, New Delhi Bench, Court-IV, comprising Shri Manni Sankariah Shanmuga Sundaram (Member-Judicial) and Shri Atul Chaturvedi (Member-Technical), has held that the debt arising out of a structured supply chain finance facility doesn't come under the ambit of financial debt u/s 5(8) of the IBC, 2016. The application was filed by Prudent Arc Limited to initiate CIRP of the corporate debtor for default of Rs. 3.17 Cr. The financial debt was assigned to the ...

Petition U/S 9 Of IBC Is Inadmissible Without Payment Received By Corporate Debtor In Subcontracted Work Done By Operational Creditor: NCLT Hyderabad

The National Company Law Tribunal (NCLT) Hyderabad bench of Sri Rajeev Bhardwaj (Hon'ble Judicial Member) and Sri Sanjay Puri (Hon'ble Member Technical) has held that in absence of any payment received by the Corporate Debtor in a subcontracted work executed by the Operational Creditor, application under section 9 of the IBC cannot be entertained. Filing such an application would be an attempt to use the IBC as a forum to recover the debt which is against the objectives of the IBC. The...

Adjudicating Authority Can Pass Order U/S 114 Of IBC Based On Resolution Professional's Report If No Repayment Plan Is Submitted: NCLT New Delhi

The National Company Law Tribunal (NCLT) New Delhi bench of Sh. Ashok Kumar Bhardwaj (Hon'ble Member (Judicial) and Sh. Man Mohan Gupta (Hon'ble Member Technical) has held that a meeting of the Committee of Creditors is not required to be summoned under Regulation 17A of the Personal Guarantors Regulations when no repayment is submitted by the Personal Guarantor. The Adjudicating Authority can pass an order based on the report submitted by the Resolution Professional under section 112 or...

NCLT Ahmedabad Admits Blu Smart Mobility Ltd Into CIRP Over Default Of ₹1.28 Crore

The National Company Law Tribunal (NCLT), Ahmedabad bench, comprising Justice Shammi Khan (Judicial Member) and Mr. Sanjeev Kumar Sharma (Technical Member), has initiated the Corporate Insolvency Resolution Process (CIRP) against Blu-Smart Mobility Ltd. (Corporate Debtor) upon an admitted default of Rs.1,28,02,195. Brief Facts Catalyst Trusteeship Limited (Applicant/ Financial Creditor) filed the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) against...

Operational Debt Can't Be Converted Into Financial Debt By Execution Of Subsequent Agreement Between Parties: NCLT New Delhi

The National Company Law Tribunal (NCLT) New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Shri Atul Chaturvedi (Technical Member) has held that an Operational Debt cannot be converted into a Financial by the execution of subsequent agreement between the parties. If this is permitted, it would open the floodgates for potential misuse of the provisions of the IBC. The present application has been filed under section 7 of the Insolvency and Bankruptcy Code,...

Development Rights Crystallised Before Termination Of Collaboration Agreement Form Part Of Corporate Debtor's Assets: NCLT New Delhi

The National Company Law Tribunal (NCLT) New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Shri Atul Chaturvedi (Technical Member) has held that developments rights crystallised before the termination of collaboration agreement can be included in the assets of the corporate debtor even though such termination of the agreement was later upheld by the Arbitral Tribunal. These rights were exercised by the Corporate Debtor to develop the real estate project which...

Bank Can Classify Corporate Debtor's Account As Fraud During CIRP, Such Classification Is Not Hit By S.14 Of IBC: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Sh. Prabhat Kumar (Technical Member) and Justice Virendrasingh Bisht (Retd.) (Judicial Member) has held that a bank is empowered to classify the account of the Corporate Debtor as fraud even during the currency of the CIRP and such classification is not hit by section 14 of the IBC. The present application has been filed under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) seeking to set aside the letter issued by...