NCLT Chandigarh Orders Promoters Responsible For Insolvency To Vacate Majestic Hotels' Property

On 17 March, the Chandigarh Bench of the National Company Law Tribunal (NCLT), in the insolvency proceedings of Majestic Hotels Ltd. (corporate debtor), directed the promoters and related parties to vacate portions of the company's flagship property, Hotel Majestic Park Plaza in Ludhiana. A Bench comprising Judicial Member K. Biswal and Technical Member K.K. Singh observed: “The intent as per the provisions of the IBC is that if the Corporate Debtor has failed to meet its obligations in...

IBC Cannot Be Misused To Impede Recovery Process Under SARFAESI: NCLT Delhi

The National Company Law Tribunal, Delhi, has recently dismissed an application filed under Section 94 of the Insolvency and Bankruptcy Code, which allows a personal guarantor to initiate insolvency proceedings against himself, holding that the provision cannot be used to stall recovery proceedings already underway under the SARFAESI Act, 2002, and before the Debt Recovery Tribunal. The Tribunal said the plea was a tactical attempt to take advantage of the interim moratorium under the IBC. The...

NCLT Hyderabad Admits Insolvency Plea Against Personal Guarantor, Says Stamp Duty Defect On Guarantee No Bar

The National Company Law Tribunal (NCLT) at Hyderabad has recently reiterated that an objection based on insufficient stamp duty on a guarantee deed cannot defeat proceedings under Section 95 of the Insolvency and Bankruptcy Code, admitting a personal insolvency petition filed by Bank of Maharashtra against Nukala Savithri, personal guarantor to SVSVS Projects Private Limited. A coram of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri heard the petition filed for initiation of...

NCLT Indore Rejects Suspended Management Plea To Join GEI Power Resolution Plan Approval Proceedings

The Indore Bench of the National Company Law Tribunal (NCLT) has rejected a plea by the suspended management of GEI Power Ltd. seeking to take part in the proceedings where the Tribunal is considering approval of the company's resolution plan, holding that former management cannot intervene at this stage after the lenders have already approved the plan. Refusing the request, the tribunal said that allowing such participation would go against the limited role of the court at the plan approval...

Liquidation Can Be Recalled Using Inherent Powers Where Debt Is Settled: NCLT Hyderabad

The Hyderabad Bench of the National Company Law Tribunal (NCLT) on 6 March, held that even though the Insolvency and Bankruptcy Code (IBC), 2016, does not expressly provide for withdrawal of liquidation proceedings, the Tribunal can exercise its inherent powers in appropriate cases to secure the ends of justice. The Bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri recalled the liquidation process against Ravi Cranes & Movers Ltd., preventing the liquidation...

Mere Pendency Of Arbitration Does Not Constitute Realizable Asset Or Extinguish Liability: NCLT Chandigarh

The National Company Law Tribunal (NCLT) at Chandigarh recently held that mere pendency of arbitration cannot be a ground to defer insolvency proceedings once debt and default are established. A bench of Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh while admitting a Tollways company to CIRP observed, “Mere pendency of arbitration does not constitute a realizable asset or extinguish an admitted financial liability. In contrast, the Financial Creditor has...

Mere Non-Reflection Of Funds In Books Not Proof Of Fraud Under IBC: NCLT Kochi

The National Company Law Tribunal (NCLT) at Kochi has dismissed an application filed by the liquidator of Vysali Pharmaceuticals Ltd against its suspended Managing Director, holding that mere non-reflection of amounts in the books of accounts cannot by itself establish fraudulent diversion of funds under Section 66 of the Insolvency and Bankruptcy Code.A coram of Judicial Member Vinay Goel observed that allegations of fraud must be supported by cogent and credible evidence and cannot be...

NCLT Jaipur Says Only CoC Can Approve CIRP Costs, Dismisses Plea By RP Of Aesthetic Stone Arts As Not Maintainable

The National Company Law Tribunal (NCLT) at Jaipur has dismissed an application filed by the erstwhile Resolution Professional of Aesthetic Stone Arts India Pvt. Ltd. seeking ratification of Corporate Insolvency Resolution Process (CIRP) costs, holding that determination of such costs lies exclusively within the domain of the Committee of Creditors (CoC).A coram of Judicial Member Reeta Kohli and Technical Member Kavita Bhatnagar also held that no interlocutory application is maintainable...

NCLT Mumbai Admits Personal Insolvency Plea Against Frost International's Guarantor Over Rs 285 Crore Default

The National Company Law Tribunal's Mumbai bench has admitted an insolvency application filed by Indian Bank (erstwhile Allahabad Bank) against Anoop Kumar Wadhera, personal guarantor to Frost International Ltd, in a case involving a default of approximately Rs 285.77 crore. A coram of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar, while admitting the petition and initiating an insolvency resolution process against Wadhera, observed: “Considering the above facts...

NCLT Mumbai Partly Allows Anil Ambani Access To Pre-CIRP Records Of Reliance Communications To Defend ED-CBI Proceedings

The National Company Law Tribunal (NCLT) at Mumbai has partly allowed an application by former Reliance Communications Ltd director Anil Dhirajlal Ambani seeking access to insolvency records of the company, including documents furnished to the Enforcement Directorate and the Central Bureau of Investigation, holding that a suspended director cannot be denied pre-CIRP records required to defend himself in proceedings based on those materials.Ambani told the tribunal that proceedings have been...

S.7 IBC | Only Financial Creditor And Corporate Debtor Have Vested Right To Be Heard At Pre-Admission Stage: NCLT Bengaluru

The National Company Law Tribunal (NCLT) at Bengaluru has held that no third party has a right to intervene at the pre-admission stage of a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, reiterating that the Tribunal's scope at that stage is limited to examining the existence of financial debt and default. A coram of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada was dealing with an interlocutory application seeking permission to intervene...

NCLT Bengaluru Admits Insolvency Against BNH Infra Projects On ₹11.3 Crore Loan Default In Canara Bank's Plea

The Bengaluru Bench of the National Company Law Tribunal (NCLT) on March 16 admitted insolvency proceedings against BNH Infra Projects India Pvt. Ltd. over a loan default of about Rs 11.3 crore, after Canara Bank claimed total outstanding dues of over Rs 64 crore. A coram comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada noted that the respondent was proceeded ex parte due to failure to appear and comply with the tribunal's directions, observing that...