Inconsistent Default Dates In SARFAESI And IBC Demand Notices To Guarantor Not Fatal To Insolvency Plea: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has recently observed that default under the Insolvency and Bankruptcy Code is a factual state of non-payment and minor variations in the dates of default in notices issued under SARFAESI and the Insolvency and Bankruptcy Code to a personal guarantor cannot defeat insolvency proceedings when the debt and failure to pay are otherwise clearly established. A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar was...

Inter-Creditor Agreement For Coordinated Action Does Not Bar Insolvency Plea By Single Lender: NCLT Hyderabad

The National Company Law Tribunal (NCLT) at Hyderabad has recently observed that an Inter-Creditor Agreement meant to ensure coordinated action among consortium lenders does not prevent an individual financial creditor from initiating insolvency proceedings, even as it declined to admit the petition on the facts of the present case.A coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri observed: “In view of the overriding effect of the IBC, the Inter-Creditor Agreement that...

CIRP Can Be Initiated Only On Default, Not On Apprehension Of Inability To Pay: NCLT Ahmedabad

A corporate insolvency resolution process can be initiated only upon the occurrence of default and not on a mere apprehension of inability to pay debts, the National Company Law Tribunal, Ahmedabad Bench, has held while rejecting a voluntary insolvency application filed by a textile company under Section 10 of the Insolvency and Bankruptcy Code. The matter was heard by a coram comprising Judicial Member Chitra Hankare and Technical Member Dr. Velamur G. Venkata Chalapathy. Rejecting the plea,...

NCLT Mumbai Admits Personal Insolvency Plea Against Frost International's Guarantor Over ₹671.56 Crore Default

The National Company Law Tribunal (NCLT) at Mumbai has admitted personal insolvency resolution proceedings against Poonam Anoop Wadhera, the personal guarantor of Frost International Limited, in connection with a default of Rs 671.56 crore A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar admitted the petition filed by Canara Bank Limited under Section 95 of the Insolvency and Bankruptcy Code. “Considering the above facts and circumstances and upon perusal...

Inconsistencies Between E-Auction Notice And Process Memo Vitiate Liquidation Sale: NCLT Amaravati

The National Company Law Tribunal (NCLT) at Amaravati has prima facie held that inconsistencies between an e-auction sale notice and the auction process memorandum create serious ambiguity regarding the assets offered for sale and render the liquidation auction process legally unsustainable under the Insolvency and Bankruptcy Code. “This Adjudicating Authority is of the considered view that the inconsistency between the E-Auction Sale Notices and the Auction Process Memorandum creates serious...

Delay In Statutory Demand Notice No Ground to Reject Insolvency Plea If Within Limitation: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has held that a delay in issuing a statutory demand notice does not invalidate personal insolvency proceedings under the Insolvency and Bankruptcy Code so long as the insolvency plea is filed within time. The tribunal clarified that the limitation runs from the date of default and not from the date on which the demand notice is issued. The ruling was delivered by a coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat...

NCLT Mumbai Orders ONGC To Release Rs 22.14 Crore Withheld From Dolphin Offshore Over GST Garnishee Notice

The National Company Law Tribunal (NCLT) at Mumbai has recently directed Oil and Natural Gas Corporation Limited (ONGC) to release payments due for work executed under its contracts with Dolphin Offshore Enterprises (India) Ltd., which had been withheld pursuant to a GST department garnishee notice. It held that pre-CIRP claims of the GST department stood extinguished upon approval of the resolution plan. The direction includes the release of Rs. 22.14 crore determined under one of the...

NCLT Kochi Dismisses GST Department's Plea to Include Belated ₹6.06 Crore Claim In SDF Industries Insolvency

The National Company Law Tribunal (NCLT) at Kochi has dismissed the tax department's plea to include a Rs 6.06 crore belated GST claim in the insolvency process of SDF Industries Limited, holding that claims cannot be entertained after approval of the resolution plan by the Committee of Creditors. A coram of Judicial Member Vinay Goel held that permitting the tax department to raise its claim at such a stage would reopen settled stages of the corporate insolvency resolution process and...

Bank's Appropriation Of Corporate Debtor's Fixed Deposit During CIRP Violates Moratorium: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has recently held that the unilateral liquidation and appropriation of a corporate debtor's fixed deposit by a bank during insolvency proceedings amounts to an impermissible recovery action barred by the moratorium. “Section 14 of the Code imposes a complete bar on any action to recover, foreclose, or enforce any security interest against the assets of the Corporate Debtor once the CIRP has commenced and the moratorium under Section 14 has...

Jet Airways Liquidation: NCLT Directs Distribution Of Sale Proceeds Despite Pending Workmen Claims

The National Company Law Tribunal (NCLT) at Mumbai has directed the liquidator of Jet Airways (India) Ltd to proceed with the distribution of liquidation proceeds under the Insolvency and Bankruptcy Code, holding that indefinite deferment of distribution defeats the objective of timely value realisation. “Indefinite deferment of distribution, particularly in a liquidation that has already witnessed significant delay, runs contrary to the object of timely value realisation and distribution...

NCLT Ahmedabad Issues Contempt Notices Against Sai Infinium Over Unwarranted Allegations In CIRP Recall Plea

The National Company Law Tribunal (NCLT) at Ahmedabad has directed issuance of contempt notices to Sai Infinium Limited and its representatives after holding that a recall plea contained “contemptuous” allegations against the Bench. The tribunal also rejected the recall plea.. A coram of Judicial Member Chitra Hankare and Technical Member Dr. Velamur G. Venkata Chalapathy made the observation while dismissing an application filed by the corporate debtor seeking recall of an ex...

Attachment During Insolvency Unenforceable, But NCLT Kochi Cannot Lift Consumer Forum Order

The National Company Law Tribunal (NCLT) at Kochi has recently held that an attachment ordered by the Kerala State Consumer Disputes Redressal Commission during an insolvency moratorium is legally unenforceable but said it lacks jurisdiction to itself remove or set aside the attachment. A bench led by Judicial Member Vinay Goel said the attachment could not survive the moratorium or the approval of the resolution plan of the corporate debtor, under which the claim had already been dealt with. ...