Mere Forensic Audit Report Observations Cannot Extinguish Corporate Debtor's Ownership Rights: NCLT Ahmedabad

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has recently ruled that a forensic audit report alone cannot deprive a corporate debtor of ownership over money standing in its bank account. It also cannot confer any adjudicated right on a bank to disregard the Insolvency and Bankruptcy Code. A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma observed, “Mere observations contained in a forensic audit report do not, by themselves, extinguish ownership...

NCLT Chandigarh Allows CIRP Withdrawal After Debtor Settles With Sole Financial Creditor, Operational Creditor

The Chandigarh bench of the National Company Law Tribunal (NCLT) has allowed the withdrawal of the Corporate Insolvency Resolution Process (CIRP) against a corporate debtor after its suspended management settled the claims of the sole financial creditor and the operational creditor. Following the settlements, the statutory requirements for withdrawal of the CIRP stood fulfilled. A bench of Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal observed: “The Operational...

Mere OTS Proposals, Settlement Talks Cannot Postpone Valid Insolvency Application: NCLT Ahmedabad

The Ahmedabad bench of the National Company Law Tribunal (NCLT), while dismissing applications filed by a cotton spinning company seeking time to pursue a one-time settlement (OTS), held that OTS proposals, ongoing settlement discussions and identification of prospective purchasers cannot defeat or postpone adjudication of a valid insolvency application. The applications had also sought permission to facilitate inspection of the company's assets by prospective purchasers. The tribunal...

NCLT Bengaluru Approves ₹17.25 Crore Resolution Plan For Dunlop Polymers

The Bengaluru bench of the National Company Law Tribunal (NCLT) has approved a ₹17.25 crore resolution plan for Dunlop Polymers Pvt. Ltd. The order brings an end to a corporate insolvency resolution process in which 1,673 days were excluded from the CIRP period. The tribunal, comprising Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada, approved the resolution plan submitted by Saikam Sivachaitanya after finding that it complied with the requirements of the...

No Artificial Sub-Classification Among Secured Creditors Under IBC Waterfall Mechanism: NCLT Allahabad

The Allahabad Bench of the National Company Law Tribunal (NCLT) on 11 June held that the waterfall mechanism under the Insolvency and Bankruptcy Code, 2016 does not permit artificial sub-classification among secured creditors while distributing proceeds after approval of a resolution plan. Judicial Member Praveen Gupta and Technical Member Ashish Verma partly allowed an application filed by IFCI Ltd. in the Corporate Insolvency Resolution Process (CIRP) of Hind Agro Industries Ltd. The Bench...

Going-Concern Liquidation Buyer Not Entitled To Automatic Waivers Under IBC: NCLT Mumbai

The Mumbai Bench of the National Company Law Tribunal (NCLT) on 12 June held that a successful auction purchaser acquiring a corporate debtor as a going concern during liquidation is not automatically entitled to waivers, concessions, or reliefs sought through an application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Judicial Member Lakshmi Gurung and Technical Member Charanjeet Singh Gulati further observed that liabilities expressly attached to assets in the sale...

NCLT Delhi Admits Allegis Plea Against Olive Telecom, Holds Arbitral Award Crystallises Operational Debt

The New Delhi Bench of the National Company Law Tribunal (NCLT) on 11 June admitted the Section 9 application filed by Allegis Services (India) Pvt. Ltd against Olive Telecommunication Pvt. Ltd, commenced Corporate Insolvency Resolution Process (CIRP), declared moratorium under Section 14, and appointed Harmeet Kaur as Interim Resolution Professional (IRP).Judicial Member Bachu Venkat Balram Das and Technical Member Ravindra Chaturvedi held that an arbitral award arising from an operational...

NCLT Kochi Rejects ADIMS Resolution Plan Over Dependence On Uncertain Lease, Terminates CIRP

On 25 June, the Kochi Bench of the National Company Law Tribunal (NCLT) declined to approve the resolution plan submitted for Attukal Devi Institute of Medical Sciences Limited (ADIMS), holding that plans founded on speculative contingencies and unresolved third-party disputes cannot be sustained solely on the basis of Committee of Creditors' (CoC) approval. Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy dismissed the Resolution Professional's application under Section...

NCLT Delhi Admits Prudent ARC CIRP Plea Against Super Property, Says No Bar From Transferred Winding-Up

The New Delhi Bench of the National Company Law Tribunal (NCLT) on 16 June admitted an insolvency petition filed by Prudent ARC Ltd against Super Property Maintenance Pvt Ltd, holding that transferred winding-up proceedings, where no irreversible steps have been taken, do not bar initiation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. The Bench of President Justice Anupinder Singh Grewal and Technical Member Ravindra observed: “Further,...

IBC Overriding Effect Not Available For Restructuring Outside Approved Resolution Plan: NCLT Hyderabad

The Hyderabad Bench of the National Company Law Tribunal (NCLT) on 12 June held that post-approval restructuring measures cannot claim the overriding effect of the Insolvency and Bankruptcy Code, 2016 unless they form part of the approved resolution plan. Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri dismissed an application filed by successful resolution applicant Krishna Kumar Haridas seeking directions to permit post-resolution capital restructuring of Fenoplast Ltd,...

NCLT Delhi Initiates CIRP Against Nirvikar Films LLP, Includes Undisputed Interest In Debt Calculation

The New Delhi Bench of the National Company Law Tribunal (NCLT) on 12 June held that interest stipulated in invoices and credit notes forms part of operational debt when the Corporate Debtor does not dispute it, and can be included while computing the statutory threshold under the Insolvency and Bankruptcy Code, 2016. President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi admitted the Section 9 petition filed by Zenith Media Scope Pvt. Ltd. and ordered commencement...

NCLT Ahmedabad Rejects Plea On Preferential, Fraudulent Transactions Due To Failure Of Service

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 12 June held that applications under Sections 43 and 66 of the Insolvency and Bankruptcy Code, 2016 cannot be adjudicated in the absence of valid service on respondents, as such adjudication would violate principles of natural justice. Judicial Member Shammi Khan and Technical Member Sanjeev Sharma dismissed an application filed by Omkarchand R. Maloo, Liquidator of Intelligent Textile Engineers Pvt. Ltd., seeking directions on...