MOU And Loan Agreement For Land Acquisition As Investment, Not Financial Debt Under IBC: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Justice V.G. Bisht (Judicial Member) and Prabhat Kumar (Technical Member) has held that the Memorandum of Understanding (MOU) and Loan Agreement intended for the acquisition and development of land constitute an investment rather than financial debt under the Insolvency and Bankruptcy Code (IBC). Brief Facts: RT...

Damages Under Section 14B Of EPF Act Are Government Dues, Subject To Section 53 Of IBC, Not Section 36(4)(a)(iii): NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Lakshmi Gurung (Judicial Member) and Charanjeet Singh Gulati (Technical Member) has held that damages under Section 14B of the EPF Act are classified as government dues. Consequently, these damages must be paid according to Section 53 of the Insolvency and Bankruptcy Code, 2016 and are not covered under Section 36(4)(a)(iii) of...

Interest Not Essential For Debt To Qualify As Financial Debt Under IBC: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Anil Raj Chellan (Technical Member) and Kuldip Kumar Kareer (Judicial Member) has held that the inclusion of interest is not essential for a debt to qualify as financial debt. The bench held that the definition of financial debt under Section 5(8) of the Insolvency and Bankruptcy Code, 2016, does not explicitly exclude...

Arbitration Clause Does Not Bar Operational Creditors From Filing Section 9 Applications Under IBC: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of K. R. Saji Kumar (Judicial Member) and Sanjiv Dutt (Technical Member) has held that an arbitration clause in an agreement does not prevent an operational creditor from filing an application under Section 9 of the Insolvency and Bankruptcy Code (IBC). The bench held that the presence of such a clause does not impose any restriction...

Resolution Professional Must Confirm Proper Service Of Demand Notice Before Admitting It To Adjudicating Authority: NCLT Amravati

The National Company Law Tribunal (NCLT), Armravati Special Bench of Dr Venkata Ramakrishna Badarinath Nandula (Judicial Member) held that proof of due service of the demand notice presented to the corporate debtor or its guarantor must first be verified by the resolution professional. The creditor cannot present the same directly to the...

No Liability On Successful Resolution Applicant Post Plan Approval If Not Identified In Corporate Debtor's Financial Records: NCLT Mumbai

The National Company Law Tribunal Mumbai bench of Prabhat Kumar (Technical Member) and Justice Virendrasingh Bisht (Judicial Member) has held that no liability can be imposed on the Successful Resolution Applicant after the approval of the plan by the Committee of Creditors if such liability is not identifiable from the financial records of the Corporate...

Claims Submitted After Resolution Plan Approval Including Related Moratorium Period Not Allowed Under IBC: NCLT Bengaluru

The National Company Law Tribunal Bengaluru bench of K. Biswal (Judicial Member) and Manoj Kumar Dubey (Technical Member) has held that claims submitted after the approval of the Resolution Plan, including those related to the moratorium period, are not allowed under the Insolvency and Bankruptcy Code (IBC). The bench held that permitting such belated claims at a later stage...

Discrepancy In Addresses Used For Serving Demand Notice, NCLT Amravati Dismisses SBI's Petition For Initiating IRP Process Against Personal Guarantor

The National Company Law Tribunal, Amaravati special bench of Dr Venkata Ramakrishna Badarinath Nandula (Judicial Member) dismissed a petition filed by the State Bank of India under Section 95(1) of the Insolvency and Bankruptcy Code, 2016. Discrepancies were found in the addresses used for the demand notice served to the personal guarantor and it was held that SBI failed to send the...

Weekly Digest Of IBC Cases: 22nd July 2024 To 28th July 2024

Supreme Court IBC | CIRP Of Holding Company Cannot Include Subsidiary's Assets: Supreme Court Case no. – Civil Appeal No. 4565 of 2021 Case Title – BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr. The Supreme Court on Monday (July 23) held that a holding company is not the owner of its subsidiary's assets and thus, subsidiary assets cannot...

Directing Corporate Debtor To Civil Courts Or Arbitration For Admitted Dues Undermines IBC Objectives: NCLT Mumbai

The National Company Law Tribunal, Mumbai bench of Kuldip Kumar Kareer (Judicial Member) and Anil Raj Chellan (Technical Member) had held that directing Corporate Debtor to seek resolution through civil courts or arbitration for even admitted dues would undermine the objectives of the Insolvency and Bankruptcy Code. Brief Facts: NTPC Limited (Respondent) issued two work orders...

No Provision To Waive Eligibility Requirements Under Section 43(3) Of the LLP Act For Investigation: NCLT New Delhi

The National Company Law Tribunal New Delhi bench of Dr. Sanjeev Ranjan (Technical Member) and Manni Sankariah Shanmuga Sundaram (Judicial Member) has held that there is no provision empowering it to relax / waive the eligibility requirements prescribed under Section 43(3) of LLP Act. Section 43(3) outlines the conditions under which the Central Government may appoint inspectors...

Stakeholders Can't Impose Penalties, Claim Dues From Corporate Debtor After Approval Of Resolution Plan: Delhi High Court

The Delhi High Court single bench of Justice Sanjeev Narula held once a resolution plan is accepted, the stakeholders cannot impose penalties or claim dues from the Corporate Debtor based on past liabilities. Brief Facts: OCL Iron and Steel Limited (“Petitioner”), established in 2006 as a 'coal-based direct reduced iron production' unit in Orissa, executed a Coal Mine...