Receiver Of Goods Who Has Made Advance Payments Is Also An Operational Creditor: NCLT Chandigarh

The National Company Law Tribunal (NCLT), Chandigarh bench of Shri Harnam Singh Thakur (Judicial Member) and Shri Ashish Verma (Technical Member), held that the receiver of goods who has made advance payments for the goods purchased is also an Operational Creditor. Background Facts: Kiranakart Technologies Pvt. Ltd. (“Operational Creditor”) is engaged in the business of trading of consumer goods on a B2B (Business to Business) basis and is also known by its brand name “Zepto.” On...

Insolvency Proceedings Can't Be Initiated By Operational Creditor When Complaints Regarding Defects Remain Unresolved: 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), held that an Operational Creditor can't initiate insolvency proceedings against the Corporate Debtor for non-payment, when complaints regarding defects in products remain unresolved. Background Facts: Schneider Electric India Pvt. Ltd. (“Operational Creditor”) is a prominent player in the Indian energy management market,...

Order Of DRT Setting Aside NPA Classification Does Not Negate Existence Of Financial Debt Or Occurrence Of Default: 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), held that an order of Debt Recovery Tribunal (DRT) setting aside NPA classification does not negate existence of financial debt or occurrence of default, which are the two primary factors for admitting a Section 7 petition under the Insolvency & Bankruptcy Code (“the code”) . Background Facts: The Applicant, M/S Encore ...

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...