NCLT Ahmedabad Admits Immacule Lifesciences' Insolvency Plea Against FTF Pharma Over ₹2.18 Cr. Debt

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 9 September admitted an insolvency petition filed by Immacule Lifesciences Pvt. Ltd. against FTF Pharma Pvt. Ltd. under the Insolvency and Bankruptcy Code, 2016 (IBC). Judicial Member Chitra Hankare and Technical Member Dr. V.G. Venkata Chalapathy admitted the petition after finding that the outstanding debt exceeded Rs. 1 crore and that FTF Pharma's reliance on bankruptcy proceedings involving another entity did not establish a...

IBC Can Apply To Personal Guarantors Residing Abroad, Nationality No Bar: NCLT Chennai

The National Company Law Tribunal (NCLT), Chennai, on 7 September held that the Insolvency and Bankruptcy Code (IBC) can be invoked against a personal guarantor residing abroad, as the Code does not restrict its applicability based on the guarantor's nationality or citizenship. A Bench of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam admitted a Section 95 IBC petition filed by M. Gagan Bothra against Senthil Kumar, personal guarantor of PRC International Hotels...

NCLT Ahmedabad Rejects Benzo Chem's Insolvency Plea Against Aether Industries Over Pre-Existing Dispute

On 8 September, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) dismissed an insolvency petition filed by Benzo Chem Industries Pvt. Ltd. against Aether Industries Ltd. after finding a pre-existing dispute over the quality of chemicals supplied before the demand notice was issued. A Bench comprising Judicial Member Chitra Hankare and Technical Member Dr. Velamur G Venkata Chalapathy observed: “...it appears that the Corporate Debtor had raised the issue regarding defective...

Mere Inclusion Of Company's Name In Loan Documents Not Enough To Trigger Insolvency: NCLT Delhi

The Delhi bench of the National Company Law Tribunal (NCLT) has ruled that merely including a company's name in loan and sanction documents is not enough to establish that the company itself is the real obligor for the purpose of initiating insolvency proceedings.“The insolvency jurisdiction under Section 7 cannot be permitted to be invoked merely because the name of a company appears in the sanction letter, absent clear evidence that the company itself is the real obligor in respect of the...

IBC Prevails Over RERA Where Resolution Plan Conflicts With Individual Refund Rights: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai, on 9 September held that a resolution plan cannot be required to incorporate individual homebuyers' refund rights under Section 18 of the Real Estate (Regulation and Development) Act, 2016, where doing so conflicts with the collective insolvency resolution process. A Bench comprising Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan dismissed an application by homebuyers Vivek Talwar, Aditi Talwar, Vishal Joshi and Anjana...

Professional Entitled To Fees Based On Work, Payment Can't Rely On Court-Fee Refund: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench on 11 September held that professionals engaged by a corporate debtor are entitled to fees commensurate with the work performed, and that payment of professional fees cannot be made conditional upon the refund of court fees. A Bench comprising Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer directed the Liquidator of Abhay Nutrition Pvt Ltd. to pay Advocate Roshan Raghunath Totla's fees in accordance with the...

NCLT Delhi Dismisses CIRP Plea Against WAPCOS Over Pre-existing Disputes

The Delhi bench of the National Company Law Tribunal has dismissed an insolvency plea against Mini-Ratna Government of India undertaking WAPCOS Limited. The bench found that WAPCOS had raised concerns over the quality and completeness of survey work well before the payment demand was issued.The bench of Judicial Member Manni Sankariah Shanmuga Sundaram and Technical Member Reena Sinha Puri observed,“The material placed on record therefore shows that the Corporate Debtor had raised issues...

Auction Purchaser Not Liable For Corporate Debtor's Pre-CIRP Dues: NCLT Allahabad

The Allahabad bench of the National Company Law Tribunal (NCLT) has ruled that pre-CIRP dues of a company cannot be recovered from an auction purchaser merely because the purchaser acquired its leasehold property through liquidation on an “as is where is” basis.The bench comprising Judicial Member Praveen Gupta and Technical Member Ashish Verma observed, “In view of the above, the mere “as is where is” condition or the subsequent transfer of the leasehold interest cannot convert the pre-CIRP...

NCLT Hyderabad Replaces Liquidator For Failing To Take Enforcement Steps Beyond Emails And Notices

The National Company Law Tribunal (NCLT), Hyderabad Bench, has recently refused to grant a fourth extension to a Liquidator after finding that his efforts to enforce orders against the suspended directors had substantially remained confined to emails and notices. The bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri observed, “Issuance of correspondence, by itself, cannot be regarded as execution or enforcement of an order passed by this Adjudicating Authority.” ...

NCLT Hyderabad Says It Cannot Order Release Of ED-Attached Assets, Directs Liquidator To PMLA Tribunal

The National Company Law Tribunal (NCLT), Hyderabad Bench, has held that it is not the appropriate forum to direct the release of assets attached by the Enforcement Directorate (ED) in the liquidation of MBS Impex Private Limited. The tribunal left the Liquidator to pursue the remedy available before the PMLA Appellate Tribunal, where his appeal seeking release of the assets was already pending.“Therefore, we are of the considered opinion that this Tribunal is not the appropriate forum for...

Transaction Audit Report Alone Insufficient To Prove Undervalued Transaction: NCLT Hyderabad

The Hyderabad Bench of the National Company Law Tribunal (NCLT) has found that a Transaction Audit Report, without the underlying records, was insufficient to establish that an Audi vehicle, an asset part of a CIRP, was sold at an undervalue. The tribunal also found that the vehicle's book value could not, by itself, establish its fair market value.A bench comprising Judicial Member Rajeev Bhardwaj and Technical Member Sanjay Puri made the observation while dismissing the liquidator's...

NCLT Ahmedabad Bars Income Tax Department From Adjusting Refund Against Pre-CIRP Dues During Moratorium

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has ruled that the Income Tax Department cannot adjust an income-tax refund determined after commencement of the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor's pre-CIRP tax dues during the moratorium.The bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma held that once the refund was determined after CIRP began, it became an asset of the Corporate Debtor and could not be...