BMC's Statutory First Charge Survives Liquidation Sale, Auction Purchaser Liable For Dues: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai has held that a statutory first charge created in favour of the Brihanmumbai Municipal Corporation (BMC) over a property for outstanding property tax dues is not extinguished by a liquidation sale. The charge can be enforced against the auction purchaser.The tribunal clarified that participation in the liquidation process does not extinguish the statutory charge or prevent the Municipal Authority from enforcing it against the property.A coram of...

Can NCLT Exercise Jurisdiction Over Personal Guarantors Of Foreign Corporate Debtors? NCLT Chennai Explains

The National Company Law Tribunal (NCLT) at Chennai has held that it cannot exercise extra-territorial jurisdiction over a personal guarantor where the underlying corporate debtors are foreign entities with no registered office in India.“This Code being domestic legislation of limited territorial reach, confers no extra territorial jurisdiction upon the Adjudicating Authority to adjudicate obligations arising from entities situated beyond the sovereign and statutory framework of India. The...

Tribunal Cannot Rewrite Operational Creditor's Case: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has held that it cannot rewrite an operational creditor's insolvency case by separating invoices, determining different dates of default, and recalculating the debt when the creditor itself refused to amend its Section 9 application.A Bench comprising Judicial Member Nilesh Sharma and Technical Member Sameer Kakar made the observation while dismissing Alliance Advertising and Marketing Pvt Ltd's insolvency petition against Eduisfun Technologies...

Personal Guarantor Cannot Avoid Liability By Claiming No Personal Benefit From Loan: NCLT Indore

The Indore Bench of the National Company Law Tribunal (NCLT) on 9 September held that a personal guarantor cannot avoid liability under a guarantee merely by claiming that he derived no personal or pecuniary benefit from the loan facilities availed by the corporate debtor. A Bench comprising Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta admitted an insolvency application filed by The Cosmos Co-operative Bank Ltd. against Rajendra Singhal, personal guarantor of...

NCLT Ahmedabad Appoints Forensic Auditor To Verify ₹1.34 Crore Deposit In Gensol-Mufin Dispute

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 14 September appointed CA Anmol Bindra as an Independent Forensic Auditor to verify the adjustment of Rs. 1,34,14,800 furnished by Gensol Engineering Limited to Mufin Green Finance Limited. A Bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma held that the actual date and manner of adjustment of a security deposit must be factually verified before determining whether its appropriation during the insolvency...

NCLT Indore Admits Insolvency Plea Against Auri Grow India Over Default of ₹78.04 Cr. Principal Debt

The Indore Bench of the National Company Law Tribunal (NCLT) on 18 September admitted an insolvency petition filed by Naksh Steel Limited against Auri Grow India Limited, formerly known as Godha Cabcon & Insulation Limited, over a default of Rs. 78.01 crore in principal debt. A Bench comprising Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta held: “Its objections to interest are primarily legal objections advanced after receipt of the Demand Notice. These...

NCLT Kochi Dismisses Insolvency Plea Against Indiavision, Finds Financial Debt Not Established

On 24 September, the National Company Law Tribunal (NCLT) at Kochi dismissed an insolvency petition filed by M.K. Nazar against Indiavision Satellite Communications Limited, holding that the foundational requirements of a genuine and legally enforceable financial debt had not been satisfactorily established. A Bench comprising Judicial Member Vinay Goel and Technical Member Ravichandran Ramasamy held: “This Adjudicating Authority cannot initiate an insolvency process merely to satisfy a...

Fraudulent Intent Not Required To Establish Preferential Transaction Under IBC: NCLT Delhi

The National Company Law Tribunal (NCLT) at Delhi recently held that fraudulent intent need not be established to show that a transaction was preferential under Section 43 of the Insolvency and Bankruptcy Code (IBC).The bench comprising President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi ruled:“It is pertinent to note that under Section 43(2), there is no need to prove any fraudulent intent for a transaction to be held preferential. Section 43 operates by virtue of...

NCLT Mumbai Dismisses Insolvency Plea Against Shapoorji Pallonji

The National Company Law Tribunal (NCLT) at Mumbai has dismissed Uniton Infra Pvt. Ltd.'s ₹4.31 crore insolvency plea against Shapoorji Pallonji and Company Pvt Ltd, holding that the alleged operational debt was not due and payable under the parties' payment terms.A coram of Judicial Member Ashish Kalia and Technical Member Banwari Lal Meena said that payment was due only after Shapoorji received the corresponding Nellore Municipal Corporation payment. As Shapoorji denied receiving it and Uniton...

NCLT Guwahati Refuses To Direct PNB To Accept ₹22.50 Cr. OTS Proposal, Says Tribunal Can't Compel Bank

The National Company Law Tribunal (NCLT), Guwahati, on 10 September refused to direct Punjab National Bank (PNB) to accept a Rs. 22.50 crore One-Time Settlement (OTS) proposal made by Sandeep Kumar Bhagat in relation to three companies undergoing liquidation. A Bench of Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh observed: “Acceptance of an OTS is a matter of commercial consideration, having regard to the financial position, security, recoverability and...

Another Creditor Moves NCLT Delhi Against Bira Beer Maker Over ₹7.24 Crore Default

Another creditor has approached the Delhi bench of the National Company Law Tribunal (NCLT) seeking insolvency proceedings against B9 Beverages Limited, the maker of Bira beer, over an alleged default of ₹7.24 crore. The NCLT, while hearing the petition filed by Cheer Breweries Ltd, noted that 15 insolvency petitions against B9 Beverages were already pending before different benches of the Delhi bench. It directed the Registry to take steps to place all the matters before a single bench. The...

Secured Creditors Cannot Avoid Liquidation Costs Over Unfinalised Expenses: NCLT Chennai

The National Company Law Tribunal (NCLT) at Chennai has ruled that a secured creditor that chooses to realise its security under Section 52 of the Insolvency and Bankruptcy Code (IBC) cannot avoid its obligation to contribute towards liquidation costs merely because the expenses have not been finally determined.“Regulation 21A(2) requires a secured creditor who proceeds to realise its security interest to pay to the Liquidator the amount which it would have shared had it relinquished the...