NCLT Mumbai Approves Greensward Enterprise' ₹181.20 Crore Resolution Plan For Frost International Ltd

The National Company Law Tribunal's Mumbai Bench has approved Greensward Enterprise Pvt Ltd's resolution plan for Frost International Ltd, with a total value of Rs 181.20 crore, including interest on deferred payments. The company has been undergoing insolvency proceedings since February 2023. The plan secured 69.26% approval from the Committee of Creditors (CoC). A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar approved the plan while allowing an...

NCLT Kochi Holds Suspended Management Has No Locus After Liquidation, Rejects Auction Challenge

On 1 June, the Kochi Bench of the National Company Law Tribunal (NCLT), held that suspended directors cannot institute or pursue proceedings in the name of a corporate debtor after commencement of liquidation and that authorities cannot reopen a concluded liquidation auction in the absence of fraud, collusion or material irregularity. Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy imposed costs of Rs.1 lakh on the signatory to the application and directed its deposit...

NCLT Mumbai Rejects Think Hard India Plea Against Guarantor For Non-Invocation Of Guarantee

On 5 June, the Mumbai Bench of the National Company Law Tribunal (NCLT) dismissed an insolvency application that Think Hard India Pvt Ltd filed against Narendra Rajani, the personal guarantor of Seya Industries Ltd, holding that no liability had arisen against the guarantor because the creditor had not validly invoked the personal guarantee. Judicial Member Ashish Kalia and Technical Member Charanjeet Singh Gulati dismissed the petition under Section 95 of the Insolvency and Bankruptcy Code,...

Housing Society Cannot Recover Admitted Insolvency Dues From Auction Buyers: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has held that a housing society which has lodged and secured admission of its claim in a corporate debtor's insolvency proceedings cannot seek to recover the same dues directly from purchasers of the debtor's property sold during liquidation. A Bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar passed the ruling while allowing an application filed by auction purchasers Anil Patel, Kiran Patel and Madhav Patel...

NCLT Mumbai Rejects Personal Guarantor's Insolvency Plea, Says It Was Filed To Scuttle Auction Sale

The National Company Law Tribunal (NCLT) in Mumbai has rejected a personal insolvency plea filed by a personal guarantor to Heera Group companies. It observed that the application was moved after the auction of a mortgaged property and was intended to scuttle the concluded auction process initiated by Union Bank of India. A Bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar dismissed the plea filed by Vandana Ravindra Chaudhari. She had furnished personal...

NCLT Ahmedabad Admits Insolvency Plea Against Osia Hyper Retail's Personal Guarantor

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has admitted an application filed by Unity Small Finance Bank Limited and initiated insolvency resolution proceedings against Kavita Dhirendra Chopra, the personal guarantor of Osia Hyper Retail Limited. The application was filed in relation to an alleged default of Rs. 10,03,58,635. A bench of Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy observed,“The Personal Guarantee Agreement mentions that...

Tenant's Continued Occupation Cannot Defeat CIRP; NCLT Mumbai Orders Handover Of Corporate Debtor's Property

The National Company Law Tribunal (NCLT) in Mumbai has recently held that a tenant's continued occupation of a corporate debtor's property after expiry of its arrangement cannot defeat the objectives of the corporate insolvency resolution process (CIRP) or obstruct implementation of an approved resolution plan. The tribunal directed Countertops and Cabinets (India) Pvt Ltd to hand over possession of a Jaipur property owned by Krystal Stone Exports Ltd within 15 days. A Bench of Judicial Member...

Pending SARFAESI Proceedings No Ground To Reject Personal Guarantor's Insolvency Application: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has admitted an insolvency resolution application filed by a personal guarantor. It held that the pendency of recovery proceedings under the SARFAESI Act, by itself, cannot render such an application non-maintainable. A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed: “In view of the overriding effect accorded to the Insolvency and Bankruptcy Code, 2016 under Section 238, pendency of recovery...

Insolvency Plea Must Be Based On Fresh Default After Loan Account Regularisation: NCLT Mumbai

The Mumbai bench of the National Company Law Tribunal (NCLT) has held that a financial creditor cannot base an insolvency petition on a historical default that ceased to exist after the loan account was regularised, and must instead rely on a fresh default specifically pleaded in the application. Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed: “If the Corporate Debtor commits another default after the account has been regularised, a fresh Default occurs,...

NCLT Hyderabad Flags Nearly Ten-Fold Increase In Admitted Claim In CIRP, Orders Fresh Verification

The National Company Law Tribunal (NCLT) at Hyderabad has directed a fresh verification of a financial creditor's claim in the corporate insolvency resolution process of Sri Nagakrishna Chemicals Ltd. after noting a nearly ten-fold increase in the admitted claim amount. The tribunal noted that the amount reflected in the creditor's application was about ₹7.95 crore, while the amount admitted during the CIRP stood at ₹73.98 crore. A Bench of Judicial Member Rajeev Bhardwaj and Technical Member...

Redirecting RP To MCA Website Does Not Constitute Cooperation Under IBC: NCLT Indore

Merely directing a Resolution Professional (RP) to obtain information from public portals such as the MCA website and responding with "refer MCA website" or "not applicable" does not amount to cooperation during the insolvency resolution process, the National Company Law Tribunal (NCLT) at Indore has reiterated while directing the suspended management of Xyron Technologies Limited to furnish records sought by the RP. A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man...

Demand Notice Is Not Guarantee Invocation: NCLT Guwahati Rejects UCO Bank's CIRP Plea Against Personal Guarantor

The National Company Law Tribunal (NCLT) at Guwahati has rejected UCO Bank's insolvency application seeking initiation of proceedings against Mallika Barooah in relation to dues claimed from Berial Engineers Private Limited. The tribunal held that the bank failed to establish invocation of the guarantee and that the application was barred by limitation. A bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh passed the order while dealing with the bank's...