Weekly Digest Of IBC Cases: 29th July To 4th August 2024

High Court Stakeholders Can't Impose Penalties, Claim Dues From Corporate Debtor After Approval Of Resolution Plan: Delhi High Court Case Title: OCL Iron and Steel Limited vs Union of India Citation: 2024 LiveLaw (Del) 862 Case No.: W.P.(C) 8316/2024 & CM APPLS. 34076/2024, 38159/2024 The Delhi High Court single bench of Justice Sanjeev Narula held once a resolution...

Senior Advocate's Application For CIRP Over Non Payment Of Legal Fees: NCLT Delhi Rejects Application

The National Company Law Tribunal New Delhi bench of Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has rejected an application for the initiation of the Corporate Insolvency Resolution Process (CIRP) by a Senior Advocate for non-payment of Rs. 6.26 Crore legal fees. The bench noted that there exists a pre-existing dispute regarding...

Order Under S. 73 GST Can't Be Passed Against Company In Corporate Insolvency Resolution Process: Allahabad High Court

The Allahabad High Court has held that order Section 73 of the Goods and Service Tax Act, 2017 cannot be passed a company which is under the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. Section 73 of the Goods and Service Tax Act, 2017 empowers a proper officer to initiate proceedings if he is satisfied that any tax has not been...

NCLT Mumbai Bench Rejects Claim Of Insufficiency Of Stamp Duty, Proceedings Under IBC Not To Enforce Guarantee

The National Company Law Tribunal Mumbai bench of Justice V. G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has rejected contention regarding the insufficiency of stamp duty on the guarantee agreement. The bench held that the proceedings under the Insolvency and Bankruptcy Code (IBC) are intended to address insolvency issues rather than to enforce...

IBC Provisions Prevail Over Kolkata Municipal Corporation Act: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Anu Jagmohan Singh (Technical Member) and Kishore Vemulapalli (Judicial Member) has held that the provisions of the Kolkata Municipal Corporation Act do not take precedence over those of the IBC. The bench held that claims by the KMC, being in the nature of crown debt, should be classified as government dues and accordingly...

Judge Recusals On Frivolous Grounds Enable Litigant Manipulation And Bench Selection: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Justice (Retd.) Sh. Virendrasingh Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has held that judges recusing themselves based on frivolous and baseless allegations would enable litigants to manipulate proceedings to select their preferred benches. The bench held that recusal cannot be dictated by litigants; it...

Insufficiently Stamped Agreement Between Parties , Not A Ground To Dismiss CIRP Applications :NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Prabhat Kumar (Technical Member) and Justice V.G Bisht (Judicial Member) has held that deficiencies in document stamping, as per the Stamp Act, cannot be used as a reason to dismiss an application under Section 7 of the Insolvency and Bankruptcy Code. Brief Facts: Q West Infrastructure Private Limited (Applicant/ Financial...

Exchange Of Debit Notes And Pending MSME Reference Indicate Plausible Pre-Existing Dispute: NCLT New Delhi

The National Company Law Tribunal, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has held that the exchange of debit notes and the pending MSME reference indicate a plausible pre-existing dispute. Therefore, the bench held that if the Corporate Debtor raises a plausible contention about a pre-existing dispute, which is not just...

Liquidation Is Last Resort, Broader Public Interest In Resolving Corporate Insolvency Should Be Taken Into Account: NCLT Kolkata

The National Company Law Tribunal Kolkata bench of Bidisha Banerjee (Judicial Member) and Balraj Joshi (Technical Member) has held that the liquidation of a corporate debtor should be a measure of last resort. It held that the Insolvency and Bankruptcy Code (IBC) acknowledges a broader public interest in resolving corporate insolvencies with its primary objective extending beyond...

Interest Not Mentioned In Invoices Or Civil Court Decree, Can't Add To Reach Threshold Limit: NCLT

The National Company Law Tribunal New Delhi bench of Bachu Venkat Balaram Das (Judicial Member) and Atul Chaturvedi (Technical Member) has held that claim for interest is not arising out of supplies of goods or services and do not form part of the Operational Debt in terms of Section 5(21) of the Insolvency and Bankruptcy Code, 2016. Therefore, the bench held that the interest awarded...

NCLT Kolkata Imposes ₹1 Lakh Penalty On Indian Bank For Misguided Insolvency Petition Against Personal Guarantor Already Undergoing Insolvency Proceedings

The National Company Law Tribunal Kolkata bench of Bidisha Banerjee (Judicial Member) and D. Arvind (Technical Member) has imposed a ₹1 lakh penalty on Indian Bank for filing insolvency proceedings against a Personal Guarantor who was already undergoing insolvency proceedings initiated by the same bank. Brief Facts: The Indian Bank (Financial Creditor) initiated...

Third Parties And Multiple Representations Excluded From Hearing In Section 7 Or 9 IBC Petitions: NCLT Kochi

The National Company Law Tribunal Kochi bench of Ravichandran Ramasamy (Technical Member) and T Krishna Valli (Judicial Member) has held that at the admission stage of a petition under Section 7 or 9 of IBC, only the Corporate Debtor and the Financial Creditor are considered necessary parties for hearing. Third parties, including intervenors, do not have the right to be heard...