Petition U/S 7 Of IBC Against Corporate Guarantor Cannot Be Admitted Unless Valid Delivery Of Guarantee Invocation Notice Is Established: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Hon'ble Reeta Kohli (Judicial Member) and Hon'ble Madhu Sinha (Technical Member) has held that an insolvency application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) against the corporate guarantor of the corporate debtor cannot be admitted unless the delivery of the demand-cum-guarantee invocation notice is properly established. Only when the delivery is proven can the default on the part of the corporate...

Any Default Falling Within Section 10-A Period Of IBC Must Be Excluded When Calculating Total Outstanding Debt: NCLT Hyderabad

The National Company Law Tribunal (NCLT), Hyderabad Bench comprising of Sri Rajeev Bhardwaj, Member (Judicial) and Sri Sanjay Puri, Member (Technical) dismissed Section 9 petition filed by the Operational Creditor (Noveltech Feeds Private Limited) stating that the default amount falls within the Section 10-A period and there is presence of non-compliance of Rule 5 which is fatal to the initiation of insolvency proceedings. Brief Facts The case involves Noveltech Feeds Private...

Demand Notice Issued U/S 13(2) Of SARFAESI Act Without Obligating Guarantor To Make Payment Is Not An Invocation Of Guarantee: NCLT Mumbai

The National Company Law Tribunal (NCLT) Mumbai bench of Shri K. R. Saji Kumar (Judicial Member) and Sanjiv Dutt (Technical Member) has held that Both the demand notice issued under Rule 7(1) of the Personal Guarantors Rules, 2019, and the notice under Section 13(2) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) cannot be considered as an invocation of the guarantee. It further held that therefore, an...

NCLT Kolkata Remits Repayment Plan U/S 114(3) Of IBC To Committee Of Creditors Due To Non Consideration Of Detective Report

The National Company Law Tribunal (NCLT) Kolkata bench of Smt. Bidisha Banerjee (Judicial Member) and Smt. Madhu Sinha (Technical Member ) has remitted the repayment plan remitted to the Committee of Creditors (CoC) for reconsideration on the ground that no discussion took place on the detective report, which disclosed that the personal guarantor had sold certain properties and acquired a new one. Despite this, the creditors approved the repayment plan without deliberating on the report. ...

NCLT Mumbai Dismisses Syska LED Lights' Plea For Withdrawal Of Insolvency Application U/S 12A Of IBC

The National Company Law Tribunal (NCLT), Mumbai bench comprising K.R. Saji Kumar (Judicial Member) and Anil Raj Chellan (Technical Member) has dismissed the withdrawal application filed under Section 12A of the Insolvency and Bankruptcy Code (IBC/Code) in the insolvency proceedings of Syska LED Lights Pvt. Ltd (Corporate Debtor). The Tribunal held that once a Corporate Insolvency Resolution Process (CIRP) is admitted, it becomes a 'collective proceeding' in rem. The Tribunal observed...

NCLT Hyderabad Lays Out Structured Buy-Out Mechanism To Resolve Deadlock Between Shareholders In Escentia Group Case

The National Company Law Tribunal (NCLT) Hyderabad bench of Dr. Venkata Ramakrishna Badarinath Nandula (Judicial Member) and Charan Singh (Technical Member) in a company petition seeking relief under sections 241 and 242 of the Companies Act, 2013 (Companies Act) held that the actions of the Deccan Group amounted to grave acts of oppression and was not mere instances of internal shareholder disputes. The Tribunal further laid out a structured buy-out mechanism to resolve the deadlock...

Outgoing Liquidator Entitled To Minimum Fee Of Rs. 2 Lakh As Per IBBI Regulations: NCLT Kochi

The National Company Law Tribunal (NCLT), Kochi bench comprising Shri. Vinay Goyal (Judicial Member) and Smt. Madhu Sinha (Technical Member) has held that if the liquidator is replaced, he is entitled to a minimum fee of Rs. 2 lakh as per Schedule II of of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 for the tenure he has worked. Brief Facts: On 25.01.2023, the NCLT admitted the application under Section 7 of the Insolvency and Bankruptcy Code,...

Corporate Revival Under IBC Should Not Come At Cost Of Public Welfare Projects: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai comprising of Ms. Reeta Kohli, Hon'ble Member (Judicial) and Ms. Madhu Sinha, Hon'ble Member (Technical) dismissed an application filed by Aegis Resolution Services Private Limited acting as the Resolution Professional (RP) for Radius and Deserve Land Developers Private Limited. The application was filed against the Slum Rehabilitation Authority (SRA), Mumbai Metropolitan Region Development Authority for seeking declaration of ownership and...

Information To The NeSL/Information Utility Is Not Mandatory For Ascertainment Of Default: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench of Ms. Reeta Kohli, Member (Judicial) and Ms. Madhu Sinha, Member (Technical) admitted the Section 7 application filed by Asset Care and Reconstruction Enterprise Ltd on seeking to initiate Corporate Insolvency Resolution Process against Rajesh Buildspace Private Limited due to default in payment of interest. Brief Facts The present application filed before the National Company Law Tribunal, Mumbai Bench, by Assets Care &...

Order Admitting CIRP Cannot Be Recalled In Absence Of Fraud Or Misrepresentation: NCLT Mumbai

The National Company Law Tribunal, Mumbai comprising of Justice V.G. Bisht (Member (Judicial) and Prabhat Kumar (Member (Technical) partly allowed an interim application filed by Canara Bank in relation to the CIRP of Carnival Techno Park Pt. Ltd (CTPPL). The Tribunal rejected Canara Bank's plea to recall CIRP admission but allowed the forensic audit to investigate the legitimacy of RCFL claim and its classification as secured financial debt. Brief Facts The Application arises...

Nona Lifestyle Moves NCLT To Seek Initiation Of CIRP Against Zomato Over Alleged Non-Payment Of Dues

The National Company Law Tribunal (NCLT), New Delhi bench of Ashok Kumar Bharadwaj (Judicial Member) and Reena Sinha Puri (Technical Member) today heard a petition filed by Nona Lifestyle, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against Zomato for alleged non-payment of dues of Rs. 1,64,83,194. In 2023, Zomato had placed orders for rider t-shirts, trousers, and World Cup jerseys. Nona Lifestyle claimed to have manufactured and partially delivered the...

NCLT Doesn't Have Jurisdiction To Direct ED To Defreeze Corporate Debtor's Account Frozen Under PMLA: NCLT

The National Company Law Tribunal (NCLT), New Delhi bench comprising Justice Bachu Venkat Balaram Das (Judicial Member) and Atul Chaturvedi (Technical Member) has held that the NCLT, which is the Adjudicating Authority under the Insolvency and Bankruptcy Code, 2016 (IBC/ the Code) does not have the power to issue directions to the Directorate of Enforcement (ED) to defreeze the account of the Corporate Debtor when the account was frozen as per the directions of the Adjudicating Authority...