IBC Claim Requires Crystallised Right To "Payment," Not Mere Right To "Performance": NCLT Kolkata

The Kolkata Bench of the National Company Law Tribunal (NCLT) on 3 July held that a contractual right to performance cannot be treated as a “right to payment” under Section 3(6) of the Insolvency and Bankruptcy Code, 2016, unless the claim has crystallised into a payable amount. Technical Member Rekha Kantilal Shah and Judicial Member Bidisha Banerjee dismissed the appeal filed by NPGC Ltd against the liquidator's rejection of its Rs. 71.33 crore claim against D.C. Industrial Plant Services Pvt...

COVID Extension Does Not Waive Interest On Delayed Liquidation Payments: NCLT Mumbai

On 6 July, the Mumbai Bench of the National Company Law Tribunal (NCLT) held that a liquidator's extension of the timeline for payment of auction consideration due to COVID 19 disruptions under Regulation 47A of the Liquidation Process Regulations does not waive the successful bidder's liability to pay contractual interest for delayed payment. Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer dismissed an application filed by Rudra Construction Co. seeking waiver of...

IBC Threshold Must Be Tested Against MahaRERA Records At Time Of Filing Petition: NCLT Mumbai

On 6 July, the Mumbai Bench of the National Company Law Tribunal (NCLT) held that the number of allottees reflected on the MahaRERA website on the date of filing an application under Section 7 of the Insolvency and Bankruptcy Code (IBC) is the relevant benchmark for determining whether the statutory threshold for initiating insolvency proceedings is satisfied. Technical Member Anil Raj Chellan and Judicial Member K.R. Saji Kumar partly allowed an application filed by K.D. Lite Developers Pvt....

NCLT Mumbai Admits Bank Of Maharashtra's CIRP Plea Against DNR India Autotech Over ₹17.98 Crore Default

The Mumbai Bench of the National Company Law Tribunal (NCLT) has recently admitted Bank of Maharashtra's insolvency plea against DNR India Autotech Pvt Ltd. The Corporate Insolvency Resolution Process has been initiated over an alleged default of ₹17.98 crore arising from a corporate guarantee executed by the company for credit facilities extended to Tirumalla Agro Industries Pvt Ltd.A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar admitted the petition after holding...

NCLT Mumbai Orders Restoration of Pledged Shares, Holds Their Invocation During CIRP Moratorium Illegal

The National Company Law Tribunal (NCLT) at Mumbai has recently held that a financial creditor's invocation of pledged shares after the commencement of the Corporate Insolvency Resolution Process (CIRP) violated the moratorium under the Insolvency and Bankruptcy Code (IBC). It ruled that the creditor's contractual right to invoke the pledge could not override the statutory moratorium. A bench of Judicial Member Lakshmi Gurung and Technical Member Charanjeet Singh Gulati made the observations...

Interest-Bearing Inter-Corporate Loan Can Qualify As Financial Debt Under IBC: NCLT Kolkata

The National Company Law Tribunal (NCLT), Kolkata Bench, has held that an inter-corporate loan carrying interest qualifies as a "financial debt" under Section 5(8) of the Insolvency and Bankruptcy Code, 2016, provided it satisfies the twin requirements of time value of money and commercial effect of borrowing. The bench of Judicial Member Bidisha Banerjee and Technical Member Cmde Siddharth Mishra observed that Section 5(8) of the IBC neither expressly nor impliedly excludes inter-corporate...

NCLT Mumbai Holds Dev Land Transaction Fraudulent In Satra Properties Insolvency, Orders ₹24.45 Crore Repayment

The Mumbai Bench of the National Company Law Tribunal (NCLT), hearing proceedings arising from the corporate insolvency resolution process (CIRP) of Satra Properties (India) Ltd., has held that the forfeiture of ₹29.35 crore advanced by the company to Dev Land & Housing Pvt. Ltd. was a fraudulent transaction. It directed Dev Land & Housing and former director Praful Satra to jointly or severally contribute ₹24.45 crore to the assets of Satra Properties (India) Ltd. The tribunal...

NCLT Mumbai Admits IIFL Home Finance Insolvency Plea Against J-Seventy One Properties Over ₹2.42 Crore Default

The Mumbai Bench of the National Company Law Tribunal (NCLT) has admitted an insolvency plea filed by IIFL Home Finance Ltd. against J-Seventy One Properties and Pictures Pvt. Ltd. after finding that the company owed a financial debt of about ₹2.42 crore and had remained in default. Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that the financial debt and the continuing default were established through documentary evidence. "In view of the above, the Applicant has...

Settlement Breach Before CIRP Admission Cannot Sustain Section 9 Insolvency Proceedings: NCLT New Delhi

The New Delhi National Company Law Tribunal (NCLT) has held that once parties enter into a settlement agreement before admission of a Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016, any subsequent default arising from such settlement does not give rise to an “operational debt” and cannot sustain insolvency proceedings.A Bench comprising Judicial Member Mahendra Khandelwal and Technical Member Anu Jagmohan Singh noted that such disputed...

Patient Privacy Can't Bar RP's Access To Hospital Management System: NCLT Indore

The National Company Law Tribunal (NCLT) in Indore has ruled that suspended directors of a hospital undergoing insolvency proceedings cannot deny a resolution professional access to its Hospital Management System by citing patient-data privacy. It held that such access is necessary for the resolution professional to discharge statutory duties during the corporate insolvency resolution process. A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta passed the...

Monitoring Committee Cannot Override Fee Caps In Approved Resolution Plan: NCLT Bengaluru

The Bengaluru Bench of the National Company Law Tribunal (NCLT) on 22 June held that a Monitoring Committee cannot override or modify fee caps prescribed under an approved resolution plan through internal arrangements or mutual consent. Judicial Member Radhakrishna Sreepada and Technical Member Sunil Kumar Aggarwal partly allowed an application filed by Padmanabhan Nair against Successful Resolution Applicant (SRA) Pulkit Agarwal arising out of the implementation of the resolution plan of Trell...

Settlement Restructuring Payment Timelines Does Not Change Nature Of Operational Debt: NCLT Chennai

The National Company Law Tribunal (NCLT) at Chennai has held that a settlement agreement that merely restructures repayment or acknowledges an existing liability does not extinguish or alter the original character of the debt. A tribunal comprising Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam observed that simply renegotiating a payment timeline does not create a completely new and independent debt. “Under Indian law, a settlement agreement that merely restructures...