Insolvency Proceedings Can't Be Initiated By Operational Creditor When Complaints Regarding Defects Remain Unresolved: NCLT Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), held that an Operational Creditor can't initiate insolvency proceedings against the Corporate Debtor for non-payment, when complaints regarding defects in products remain unresolved. Background Facts: Schneider Electric...

Order Of DRT Setting Aside NPA Classification Does Not Negate Existence Of Financial Debt Or Occurrence Of Default: NCLT Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), held that an order of Debt Recovery Tribunal (DRT) setting aside NPA classification does not negate existence of financial debt or occurrence of default, which are the two primary factors for admitting a Section 7 petition under...

Income Tax Department Cannot Be Considered As A Secured Creditor In Liquidation Proceedings: NCLT Chennai

The National Company Law Tribunal, Chennai, comprising Shri Jyoti Kumar Tripathi (Member-Judicial) and Shri Ravichandran Ramasamy (Member-Technical), disposed of the application filed by the Canara Bank of India under Section 60(5) of the IBC r/w Rule 11 of the NCLT Rules 2016 against the Income Tax Department, seeking a refund of Rs 1.12 Cr. into the liquidation estate of...

Calcutta High Court Upholds Order Dismissing Plea Challenging Shift Of NCLT Premises To New Town

The Calcutta High Court has upheld a single bench order declining a plea challenging the move to shift the NCLT Kolkata premises located near the High Court, to a new building in the city's New Town area, as proposed by the Ministry of Corporate Affairs.A division bench of Justices Rajarshi Bharadwaj and Apurba Sinha Ray held: "The question, however, is not whether the shift in location...

Investors Can't Be Considered As Allottees In Absence Of “Agreement To Sell” Or “Allotment Letter”: NCLT Delhi

The National Company Law Tribunal (“NCLT”), Mumbai bench of Shri Sanjiv Dutt (Technical Member) and Shri K.R. Saji Kumar (Judicial Member) dismissed an interlocutory application filed by investors of a corporate Debtors, seeking impleadment as allottees in the real estate project. The Tribunal held that in the absence of an “agreement to sell” or an “allotment letter”...

Winding Up Petitions Under Companies Act Not At Irreversible Stage, Should Be Transferred To NCLT For Revival Under IBC: Himachal Pradesh HC

The Himachal Pradesh High Court bench of Justices Tarlok Singh Chauhan and Sushil Kukreja has held that unless the corporate debtor's demise is inevitable or the winding-up proceedings under the Companies Act have reached an irreversible stage making revival impossible, every effort must be made to revive the company. Accordingly, all such winding-up petitions should be transferred...

Operational Creditor Not Entitled To Interest Under MSME Act When Contract Prohibits It : NCLT Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), rejected a section 9 Petition filed by the operational creditor under the Insolvency & Bankruptcy Code, 2016 (the code). The Tribunal held that when the terms of contract prohibits the charging of interest, the...

'Facilitates Resolution Process': Madras HC Upholds Circular Allowing Creditor To Recommend Resolution Professional In Application U/S 95 Of IBC

The Madras High Court bench of Justice D.Bharatha Chakravarthy has held that the circular issued by Insolvency and Bankruptcy Board of India (IBBI) on 21.12.2023 under section 196 of the Insolvency and Bankruptcy Code, 2016 (Code), allowing the creditor to recommend the name of a Resolution Professional in an application filed under Section 95 of the Code cannot be deemed ultra vires...

Penalty Orders U/S 270A Of Income Tax Act Cannot Be Issued After Approval Of Resolution Plan U/S 31 Of IBC: Gujarat HC

The Gujarat High Court bench of Justices Bhargav D. Karia and D.N.Ray has held that Penalty orders under Sections 270A, 271(1)(c), and 271AAC(1) of the Income Tax Act, 1961 (Income Tax Act) cannot be issued after the approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016 (Code). Once the Resolution Plan is approved by the Adjudicating...

Insolvency Proceedings Can't Be Initiated Against Corporate Debtor For Non-Payment Of Debt When Creditor Owes Larger Amount To Debtor: NCLT Delhi

The National Company Law Tribunal (NCLT), Mumbai bench of Justice V. G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) dismissed a section 7 petition on the ground that Financial Creditor cannot seek insolvency of a debtor alleging default in payment of a financial debt when such creditor owes more than the amount claimed to be in default to such...

Payment Made Against Specific Invoice Can't Be Adjusted Against Back-Dated Invoices: NCLT Delhi

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), rejected a section 9 Petition filed by the operational creditor under the Insolvency & Bankruptcy Code, 2016 (the code), holding that when a payment is made by the Corporate Debtor against a specific invoice raised by...

Mere Filing Of Closure Application By Liquidator Does Not Bar Tribunal's Inherent Powers To Modify Orders: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), allowed an appeal by modifying an order passed by the Adjudicating Authority (NCLT, Chennai). The NCLAT held that the mere fact that the liquidator has filed an application for closure of the liquidation proceedings does...