NCLT Bengaluru Holds Bank Cannot Retain Title Deeds After Full Payment of Resolution Plan Dues

The National Company Law Tribunal (NCLT) at Bengaluru has held that a bank that has received the full amount payable under an approved resolution plan cannot continue withholding a corporate debtor's title deeds and security documents. The tribunal held that the pendency of an appeal concerning an interest dispute is not, by itself, a valid reason to retain those documents. A bench of Judicial Member Sunil Kumar Aggarwal and Technical Member Radhakrishna Sreepada directed Kotak Mahindra Bank...

Insolvency Against Personal Guarantor Maintainable Without CIRP Against Borrower: NCLT Kolkata

The National Company Law Tribunal (NCLT) at Kolkata has reiterated that insolvency proceedings against a personal guarantor can be maintained even if no insolvency proceedings have been initiated against the principal borrower. The ruling came while admitting Indian Bank's insolvency application against Santosh Jhawar, personal guarantor to Burgundy Life Style Pvt Ltd. A bench of Judicial Member Bidisha Banerjee and Technical Member Rekha Kantilal Shah relied on the National Company Law...

CoC Cannot Claim Net Gain From Subsequent Land Acquisition After Approving Resolution Plan: NCLT Mumbai

The National Company Law tribunal (NCLT) at Mumbai has held that creditors cannot claim the benefit of a subsequent increase in the value of a corporate debtor's assets after approving a resolution plan. The tribunal ruled that the gain cannot be claimed merely because the increase was not contemplated when the plan was approved. A bench of Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan observed that once a resolution plan has been approved by the Committee of Creditors...

NCLT Ahmedabad Admits CIRP Against JSW Subsidiary, Holds Guarantor Liability Co-extensive With Borrower

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 17 June held that insolvency proceedings against a corporate guarantor cannot be made conditional on the realisation of assets of the principal borrower and reaffirmed that a guarantor's liability remains co-extensive with that of the principal debtor under Section 128 of the Indian Contract Act, 1872. Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy admitted the insolvency petition filed by...

Bare Production Of Guarantee Deed Without Commercial Nexus Cannot Establish Debt: NCLT Mumbai

The Mumbai Bench of the National Company Law Tribunal on 16 June held that a Section 95 insolvency petition under the Insolvency and Bankruptcy Code cannot be sustained on the basis of a mere guarantee deed without supporting evidence of commercial context, consideration, financial capacity and nexus establishing a legally enforceable debt. Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt dismissed an insolvency petition filed by Naman Syntex against Mansi Lalitkumar Manjrekar, the...

NCLT Mumbai Admits Paytm Parent's Insolvency Plea Against Gaming Company Fabzen Over ₹3.41 Crore Dues

The National Company Law Tribunal (NCLT) in Mumbai has admitted an insolvency plea filed by One97 Communications Ltd, which operates Paytm, against gaming company Fabzen Technologies Pvt Ltd over unpaid dues of more than ₹3.41 crore for digital advertising services. A bench of Judicial Member Nilesh Sharma and Technical Member Sameer Kakar held that One97 had established the existence of an operational debt and a payment default, while Fabzen had failed to show any pre-existing dispute. “In...

Settlement In Corporate Debtor's Liquidation Does Not Extinguish Personal Guarantee Obligations: NCLT Chennai

The National Company Law Tribunal (NCLT) at Chennai has reiterated that a settlement reached during the liquidation of a corporate debtor does not absolve a personal guarantor of liability under a separate contract of guarantee. A bench of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam admitted an insolvency petition filed by Aditya Birla Finance Limited against G. Thiyagarajan, who had furnished a personal guarantee for credit facilities extended to Velohar Infra...

Collusion Allegations Alone Cannot Establish Fraudulent Insolvency Proceedings: NCLT Chandigarh

The National Company Law Tribunal (NCLT) in Chandigarh has held that allegations of collusion, related-party dealings, and disputes among shareholders or directors are not enough to establish that insolvency proceedings were initiated fraudulently. A bench of Judicial Member Khetrabasi Biswal and Technical Member Kaushalendra Kumar Singh rejected an application filed by Dr Vijay Vohra, a promoter shareholder and director of A.P.J. Laboratories Ltd. He had sought action against Himalaya Food...

NCLT Chandigarh Allows Liquidator To Initiate Execution Proceedings For Enhanced Land Acquisition Compensation

The National Company Law Tribunal (NCLT) at Chandigarh has allowed the liquidator of a rice mill to initiate execution proceedings for recovery of enhanced compensation awarded for land acquired by the Punjab government. A bench of Judicial Member Khetrabasi Biswal and Technical Member Shishir Agarwal observed that the compensation awarded under the land acquisition proceedings formed part of the company's liquidation estate and could be recovered by the liquidator. “The enhanced compensation...

NCLT Delhi Holds Homebuyers' Payments Are Financial Debt, Admits ₹137 Cr Plea In Raheja's Revanta Project

The New Delhi National Company Law Tribunal (NCLT) on 8 June held that homebuyers' payments towards a real estate project constitute financial debt under Section 5(8)(f) of the Insolvency and Bankruptcy Code (IBC). President Justice Anupinder Singh Grewal and Technical Member Ravindra Chaturvedi admitted a Section 7 petition filed by 176 allottees of Raheja Developers' Revanta project seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the developer. The Bench...

NCLT Mumbai Admits Central Bank Of India's ₹44.68 Crore Insolvency Plea Against Deepak Education

On 17 June, the Mumbai Bench of the National Company Law Tribunal (NCLT) admitted a Section 7 petition filed by Central Bank of India against Deepak Education Ltd over a default of Rs. 44.68 crore, thereby initiating the Corporate Insolvency Resolution Process against the company. Judicial Member Ashish Kalia and Technical Member Sanjiv Dutt admitted the petition, noting that the bank had successfully established the existence of debt and default and that the corporate debtor itself had...

Tribunal Cannot Expand Asset Base After Approval of Resolution Plan Under Section 31: NCLT Guwahati

The Guwahati Bench of the National Company Law Tribunal (NCLT) on 12 June held that once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code, it cannot be used to rewrite, modify or expand the asset base contemplated under the plan. Judicial Member Rammurti Kushawaha and Technical Member Yogendra Kumar Singh made the observation while rejecting a plea by the successful resolution applicant of Virgo Cements Limited seeking inclusion of additional land and...