NCLT
Income Tax Department Cannot Be Considered As A Secured Creditor In Liquidation Proceedings: NCLT Chennai
The National Company Law Tribunal, Chennai, comprising Shri Jyoti Kumar Tripathi (Member-Judicial) and Shri Ravichandran Ramasamy (Member-Technical), disposed of the application filed by the Canara Bank of India under Section 60(5) of the IBC r/w Rule 11 of the NCLT Rules 2016 against the Income Tax Department, seeking a refund of Rs 1.12 Cr. into the liquidation estate of the Corporate Debtor. The NCLT ruled that the income tax dues are the sovereign dues and cannot be declared as...
Investors Can't Be Considered As Allottees In Absence Of “Agreement To Sell” Or “Allotment Letter”: NCLT Delhi
The National Company Law Tribunal (“NCLT”), Mumbai bench of Shri Sanjiv Dutt (Technical Member) and Shri K.R. Saji Kumar (Judicial Member) dismissed an interlocutory application filed by investors of a corporate Debtors, seeking impleadment as allottees in the real estate project. The Tribunal held that in the absence of an “agreement to sell” or an “allotment letter” investors can't be considered as allottees under the Insolvency and Bankruptcy Code, 2016 (“the code”). Background...
Operational Creditor Not Entitled To Interest Under MSME Act When Contract Prohibits It : NCLT Delhi
The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), rejected a section 9 Petition filed by the operational creditor under the Insolvency & Bankruptcy Code, 2016 (the code). The Tribunal held that when the terms of contract prohibits the charging of interest, the Operational Creditor cannot claim such interest on the amount due even if entitled under the Micro, Small and Medium...
Insolvency Proceedings Can't Be Initiated Against Corporate Debtor For Non-Payment Of Debt When Creditor Owes Larger Amount To Debtor: NCLT Delhi
The National Company Law Tribunal (NCLT), Mumbai bench of Justice V. G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) dismissed a section 7 petition on the ground that Financial Creditor cannot seek insolvency of a debtor alleging default in payment of a financial debt when such creditor owes more than the amount claimed to be in default to such debtor. Background Facts: Future Consumer Limited (“Financial Creditor”) is engaged in the business of branding,...
Payment Made Against Specific Invoice Can't Be Adjusted Against Back-Dated Invoices: NCLT Delhi
The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), rejected a section 9 Petition filed by the operational creditor under the Insolvency & Bankruptcy Code, 2016 (the code), holding that when a payment is made by the Corporate Debtor against a specific invoice raised by the Operational Creditor, it can't be adjusted against back-dated invoices. Background Facts: Uniwoth...
Ex-Promoter Of Bhushan Power Moves NCLT To Enforce Supreme Court's Liquidation Order
Sanjay Singal, the former promoter of Bhushan Power and Steel Ltd (BPSL), has approached the National Company Law Tribunal (NCLT), Delhi, urging it to enforce the Supreme Court's recent order which directed liquidation of BPSL. On May 2, the Supreme Court set aside JSW Steel's ₹19,700 crore resolution plan, holding that it failed to comply with Sections 30(2) and 31(2) of the Insolvency and Bankruptcy Code (IBC). The Supreme Court had ordered liquidation under Section 33 of the IBC. ...
Secured Creditors Relinquishing Security Interest Cannot Claim Priority During Distribution Of Sale Proceeds Of Secured Assets: NCLT Cuttack
The National Company Law Tribunal (NCLT), Cuttack comprising of Justice Deep Chandra Joshi (Member (Judicial) and Banwari Lal Meena (Member (Technical) dismissed an application filed by the liquidator seeking directions for distribution of the balance sale consideration and for extending the time for distribution of sale proceeds under Section 53 of the IBC Code. Background A liquidation application was filed before the Hon'ble NCLT, Mumbai and accordingly the Tribunal admitted the...
Resolution Professional Can't Exclude Voting Share Of Members Who Abstain From Voting When Calculating Requisite Majority: NCLT Mumbai
The National Company Tribunal (NCLT), Mumbai Bench comprising of Ms. Lakshmi Gurung (Member (Judicial) and Shri Anil Raj Chellan (Member (Technical) disposed a Section 60(5) application filed by the Applicant against the approval of the Resolution Plan, stating that the same lacked the desired voting percentage to be approved as a resolution plan. Background The following case has filed by the Applicant, who is the Shareholder and Suspended Director of the Corporate Debtor, under...
Existence Of Proceedings Under MSMED Act Or S.138 NI Act Doesn't Amount To Pre-Existing Dispute U/S 9 Of IBC: NCLT Mumbai
The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Prabhat Kumar (Member- Technical) and Justice V. G. Bisht, has allowed an application filed by an operational creditor under section 9 of the IBC seeking initiation of the CIRP against the Corporate Debtor. The Adjudicating Authority observed that the proceedings under the Micro, Small, and Medium Enterprises Development (MSMED) Act or section 138 of the Negotiable Instruments Act don't constitute a pre-existing...
Loan Taken From "Special Window For Affordable & Mid-Income Housing Fund" To Be Recognised As 'Interim Finance' U/S 5(15) Of IBC: NCLT, Delhi
The National Company Law Tribunal (“Tribunal”), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), allowed the claim of the applicant as Interim Finance holding that Loan provided by SWAMIH Fund (Special Window for Affordable and Mid-Income Housing) qualifies to be recognised as 'Interim Finance' under Section 5(15) of the Insolvency & Bankruptcy Code (“the Code”). SWAMIH is a government-backed initiative in India,...
Guarantor's Liability Cannot Exceed Contractual Cap By Adding Interest On Principal Amount For Delayed Payment: NCLT Mumbai
The National Company Law Tribunal (NCLT) Mumbai bench of Justice Sh. Sushil Mahadeorao Kochey (Judicial Member) and Sh. Charanjeet Singh Gulati (Technical Member) has held that the guarantor's liability cannot exceed the limit specified in the contract of guarantee. When the corporate debtor defaults, the guarantor is bound only to the extent of the capped amount that is Rs. 25 crore in the present case, as consciously agreed upon by the parties. This cap cannot be exceeded by adding ...
Claims For Interest Based On RERA Order Do Not Translate Into Financial Debt Under IBC: NCLT Delhi
The National Company Law Tribunal, New Delhi (NCLT) comprising of Shri Manni Sankariah Shanmuga Sundaram, Member (Judicial) and Dr. Sanjeev Ranjan, Member (Technical) dismissed a Section 60(5) application filed by the Mr. Yogesh Kumar Gupta against Mr. Devendra Umrao, the Resolution professional (RP) of M/s Opulent Infradevelopers Pvt Ltd. Background An application was filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of NCLT Rules, 2016 by Mr....