Chit Fund Firms Are Financial Service Providers; Insolvency Plea Not Maintainable: NCLT Hyderabad

The National Company Law Tribunal (NCLT) at Hyderabad has held that chit fund companies are financial service providers under the Insolvency and Bankruptcy Code and cannot be treated as corporate debtors for insolvency proceedings. It dismissed a plea filed by Siply Services Private Limited against IBG Echits India Private Limited. A bench of Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri said, “ it is evident that a company carrying on the business of chit funds is engaged...

Limiting CIRP Negotiations To Higher-Ranked Bidders Not Arbitrary If As Per RFRP: NCLT Indore

The National Company Law Tribunal (NCLT) Indore Bench has held that restricting negotiations in a corporate insolvency resolution process to higher-ranked bidders is valid where it flows from the bidding framework and serves the objective of value maximisation. A coram of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta in the CIRP of Soya Industries observed that “the Corporate Insolvency Resolution Process (CIRP) was conducted strictly in accordance with the...

NCLT Bengaluru Refuses To Examine FEMA Issues In Aakash–Byju's Rights Issue Dispute, Says Outside IBC Jurisdiction

The Bengaluru bench of the National Company Law Tribunal (NCLT) has refused to examine questions relating to foreign exchange law compliance in a dispute arising from the Aakash Educational Services–Byju's rights issue. It held that such issues fall outside its jurisdiction under the Insolvency and Bankruptcy Code.The order was passed on Tuesday by a bench of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada. It came on an application filed by Aakash Educational...

NCLT Amaravati Bench Admits Insolvency Plea Against Kallam Textiles Over ₹210 Crore Default

The National Company Law Tribunal's Amravati Bench has admitted Union Bank of India's insolvency plea against Kallam Textiles Ltd. over a default exceeding Rs 210 crore. The Bench of Judicial Member Kishore Vemulapalli and Technical Member Umesh Kumar Shukla said there was no reason to refuse admission once debt and default were clearly established. It rejected the company's claim that the proceedings were being used merely for recovery. Kallam Textiles, incorporated in 1992, had been availing...

Moratorium Under Section 14 IBC Does Not Protect Personal Guarantors: NCLT Chandigarh

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 18 March held that the moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 does not extend to personal guarantors of a corporate debtor and therefore allows creditors to continue proceedings against them even during the pendency of the corporate insolvency resolution process (CIRP). A Bench comprising Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal admitted insolvency petitions filed...

Liability For Fraudulent Trading Under IBC Cannot Be Determined Mechanically: NCLT Amaravati

The National Company Law Tribunal (NCLT), Amaravati, has held that liability for fraudulent trading under Section 66 of the Insolvency and Bankruptcy Code cannot be determined through a mechanical or formula-based approach and must instead rest on a detailed examination of financial records and transactions.A Bench of Judicial Member Kishore Vemulapalli and Technical Member Umesh Kumar Shukla observed that fixing liability based merely on contractual percentages or competing claims without...

NCLT Ahmedabad Rejects Time-Barred Voluntary Insolvency Plea By Personal Guarantor, Flags Attempt To Stall Recovery

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has dismissed a voluntary insolvency application by a personal guarantor (Section 94 of the Insolvency and Bankruptcy Code, 2016), holding that the plea was barred by limitation and filed with the intent to stall recovery proceedings under the SARFAESI Act. The bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed: “The timing of the present application, coupled with the fact that the Personal Guarantor...

NCLT Chandigarh Rejects Omkara ARC's Claim In Vikas WSP CIRP, Holds Creditors Cannot Override IBC Timelines

The Chandigarh Bench of the National Company Law Tribunal (NCLT) on 10 March dismissed an application filed by Omkara Assets Reconstruction Pvt. Ltd. seeking admission of its claim as a secured financial creditor in the corporate insolvency resolution process (CIRP) of Vikas WSP Ltd. A Bench comprising Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh held that the claim, filed 1,267 days after the prescribed deadline and after the Committee of Creditors (CoC)...

PMLA Attachment Does Not Suspend Liquidator's Duty To Preserve Corporate Debtor's Assets: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has recently observed that a liquidator's obligation to preserve and protect assets forming part of the liquidation estate continues despite attachment under the Prevention of Money Laundering Act (PMLA), so long as such assets are not confiscated.A bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Sanjiv Dutt was dealing with an application filed by Kohinoor City Office Towers Industrial Estate & Premises Co-operative...

Sole Financial Creditor Can't 'Jump In and Out' Of CIRP; No Claim Withdrawal After CoC Entry: NCLT Mumbai

Holding that a sole secured financial creditor cannot ''jump in and jump out" of the corporate insolvency resolution process (CIRP), the National Company Law Tribunal (NCLT) at Mumbai emphasised that such conduct would undermine the scheme and objectives of the Insolvency and Bankruptcy Code (IBC).A bench of Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan was hearing an application filed by SREI Equipment Finance Ltd. seeking withdrawal of its claim and exit from the...

NCLT Bengaluru Gives Ola Electric 4 Weeks For Objections In ₹9.84 Crore Insolvency Case With Anevolve

On Monday, 6 April, the Bengaluru Bench of the National Company Law Tribunal (NCLT) heard an insolvency petition filed by Anevolve Mando Emobility Pvt Ltd against Ola Electric Technologies Pvt Ltd under Section 9 of the Insolvency and Bankruptcy Code, over an alleged operational debt of Rs. 9.84 crore arising from the supply of motors.Before a Bench comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada, Anevolve stated that it had issued a demand notice under...

NCLT Allahabad Confirms Flat Possession To Renaissance Realty, Orders ₹1 Crore To JAL Insolvency Estate

The Allahabad Bench of the National Company Law Tribunal (NCLT), while deciding an application filed by Renaissance Realty, acknowledged that the applicant had already received possession of a flat in the Jaypee Greens Kalypso Court project. A Bench of Judicial Member Praveen Gupta and Technical Member Ashish Verma also ordered that Rs. 1 crore recovered under RERA proceedings be returned to the insolvency estate of JAL. It observed: “In the circumstances of the present case, since the...