Prohibition On Filing Applications Under Sections 7, 8, And 10 Remains Effective Even After Section 10A Period Has Expired: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that primary purpose of Section 10A of the IBC was to provide relief to corporate debtors who defaulted during the period specified in the section. It held that although the debt itself...

Limitation Period For Appeals Under IBC Starts From Date Of Order Pronouncement; Intervenors Can't Claim Ignorance To Justify Delay: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Indevar Pandey (Technical Member) has held that under the Insolvency and Bankruptcy Code (IBC), the limitation period for filing an appeal must be calculated from the date of pronouncement of the order. The bench held that a party involved in the...

Repeated Section 9 IBC Applications Indicate Misuse Of IBC To “Arm-Twist” Solvent Company For Extortion: NCLAT

The National Company Law Appellate Tribunal (NCLAT) bench comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member), and Arun Baroka (Technical Member) has held that the repeated filings of Section 9 applications and withdrawals indicate an attempt to misuse the provisions of the Insolvency and Bankruptcy Code (IBC) to “arm-twist” the Respondent, a solvent...

Operational Creditors Getting Zero Payouts, Hands Of Courts Are Tied, Observed NCLAT, Delhi

Recently the NCLAT, New Delhi in its judgement to the case of Rajat Metaal Polychem Pvt. Ltd. Vs. Mr. Neeraj Bhatia RP Vinayak Rathi Steels Rolling Mills Pvt. Ltd. and Anr. stated that during the Resolution Process, the operational creditors are denied any payment when the amount that is payable to them in the event of the Insolvency Process is nil. The courts are not able to assist...

Past Tax Claims Against Corporate Debtor Stands Extinguished Consequent To Approval Of Resolution Plan Under IBC: Bombay HC

Since upon the completion of Corporate Insolvency Resolution Process (CIRP), the Assessee has changed hands and commenced under a new ownership and management, the Bombay High Court held that tax proceedings pertain to period prior to the CIRP, and consequent to the approval of the resolution plan, the tax proceedings stand extinguished. The Division Bench of Justice G. S....

NCLAT Declares Sale Agreement Not A Financial Debt, Dismisses Insolvency Petition

The NCLAT Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Member, Technical), and Arun Baroka (Member, Technical), has held that a sale consideration in the sale agreement did not constitute a “financial debt” under Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (IBC). Brief Facts: Gujarat State Financial...

Filing Section 9 Applications For Money Recovery Instead Of Insolvency Resolution Is Abuse Of Process: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that filing a Section 9 application for the sole purpose of recovering money, rather than resolving insolvency, constitutes an abuse of the IBC's provisions and is strongly...

Insolvency Proceedings Initiated Against A Personal Guarantor Under IBC Abate Upon The Death Of The Guarantor: NCLT, New Delhi

The National Company Law Tribunal (NCLT), New Delhi, Bench VI, comprising Shri Mahendra Khandelwal (Member, Judicial) and Shri Rahul Bhatnagar (Member, Technical), has held that insolvency proceedings initiated against a personal guarantor under the IBC abate upon the death of the guarantor and that legal representatives cannot be substituted in such cases. Brief Facts: M/s...

Invoices Deemed Bogus By Income Tax Department Cannot Justify Insolvency Proceedings Against Corporate Debtor: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that invoices deemed bogus by the Income Tax Department in assessment orders cannot be relied upon to initiate insolvency proceedings against a Corporate Debtor. Brief Facts: N.V. Aluminium Cast...

Power Of Recall Limited To Procedural Errors, Not Rehearing For Judgment Review: NCLAT Principal Bench

The National Company Law Appellate Tribunal Principal Bench, New Delhi of Justice Yogesh Khanna (Judicial Member) and Ajai Das Mehrotra (Technical Member) has held that the power of recall does not grant the NCLAT the authority to rehear a case in order to identify any apparent error in the judgment, as that falls within the scope of a review. The bench held that the power of recall...

Stakeholders Consultation Committee's Advice Not Binding On Liquidator: Supreme Court

Recently, the Supreme Court clarified that the advice offered by the Stakeholders Consultation Committee (SCC) constituted in liquidation proceedings is not binding on the Liquidator. In this case, the appellant claimed that the Liquidator failed to constitute an SCC before initiating a liquidation process. However, the respondent refuted this argument stating that constituting an SCC was not...

IBC| Timeline To Pay Balance Sale Consideration By Auction Purchaser In Liquidation Proceedings Mandatory : Supreme Court

The Supreme Court recently interpreted Rule 12 of Schedule 1 under Regulation 33 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 as mandatory in character. Rule 12 relates to how assets of the Company (Corporate debtor) are to be sold by the Liquidator. Rule 12 reads: "On the close of the auction, the highest bidder shall be invited to provide balance...