NCLAT Delhi: Section 95(1) Of IBC Permits Creditors To Initiate Insolvency Proceedings Against Personal Guarantors Via A Resolution Professional

The National Company Law Appellate Tribunal ('NCLAT') Delhi bench, comprising Mr. Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Technical Member) held that Section 95(1) of Insolvency and Bankruptcy, Code, 2016 ('IBC') allows creditors to initiate insolvency process against a Personal Guarantor through a Resolution Professional ('RP'). It held that such an...

Adjudicating Authority Rejects Application For Initiating Personal Insolvency Resolution Process Due To Forum Shopping: NCLT Delhi

The National Company Law Tribunal, Delhi Bench, comprising Shri Bachu Venkat Balram Das (Judicial Member) and Shri Atul Chaturvedi (Technical Member), while adjudicating an application under Section 95 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) has held that the applicant has approached all possible forums for remedies, constituting forum shopping. It was stated that...

Speculative Investor Is Not A Financial Creditor: NCLT Chandigarh

The National Company Law Tribunal, Chandigarh Bench, comprising Shri Harnam Singh Thakur (Judicial Member) and Shri L.N Gupta (Technical Member), while adjudicating an application under Section 7 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) has held that speculative investor cannot claim the status and benefits as a Financial Creditor by virtue of being an allottee under...

Weekly Digest Of IBC Cases: 10th June 2024 To 16th June 2024

HIGH COURTS Madras High Court: Adjudicating Authority Must Exercise Jurisdiction Akin To Revisional Jurisdiction To Assess The Correctness Of COC's Actions Case Title: National Sewing Thread Co. Ltd. vs Superintending Engineer, TANGEDCO and Anr. Case No.: W.P. No.29845 of 2022 and WMP.No.29233 of 2022 The Madras High Court bench of Justice N. Seshasayee held that...

Section 9 Application Is Not Maintainable In Absence Of Strict Proof Of Debt And Default: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench, comprising Shri K. R. Saji Kumar (Judicial Member) and Shri Sanjiv Dutt (Technical Member), while adjudicating an application under Section 9 of Insolvency and Bankruptcy Code, 2016 (“IBC, 2016”) has held that Section 9 Application is not maintainable in the absence of strict proof of debt and default. Background Facts Mittal...

NCLT Orders Byju's To Halt Second Rights Issue Amid Allegations Of Mismanagement

The National Company Law Tribunal (NCLT) has directed Byju's to maintain the status quo regarding its shareholding structure. This directive effectively halts the company's controversial second rights issue. The interim order was issued by a special bench consisting of Judicial Member M.S.S. Sundaram and Technical Member Manoj Kumar Dubey in response to a petition filed by a group...

Determination Of Share Title Is Within Civil Court's Domain, Not With NCLT/NCLAT: Telangana High Court

The Telangana High Court bench of Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka has held that the determination of the title of the shares is within the domain of the Civil Court and not the NCLT/NCLAT. The bench held that Section 430 of the Companies Act comes into play only after the title to the shares is decided. Section 430 of the Companies Act, 2013, restricts...

Breach Of Settlement Agreement Not 'Operational Debt' Under Section 5(21) Of IBC: NCLT Kolkata

TheNational Company Law Tribunal Kolkata bench of D. Arvind (Technical Member) and Bidisha Banerjee (Judicial Member) has held that the breach of settlement agreement between the operational creditor and corporate debtor does not fall within the ambit of “Operational Debt” as per Section 5 (21) of the IBC. Further, the bench held that NCLT was not the forum where parties could...

NCLT Chandigarh Bench Approves Air India-Vistara Merger

The National Company Law Tribunal (NCLT) Chandigarh bench of Harnam Singh Thakur (Judicial Member) and L. N. Gupta (Technical Member) has given its approval for the merger of Air India and Vistara. The merger, which was initially announced in November 2022, has received the green light from various stakeholders and regulatory bodies. With this merger, Air India Group is set to...

NCLT Chandigarh: Indemnity Obligation Can't Be Treated As Operational Debt For Lack Of Privity

The National Company Law Tribunal Chandigarh bench of Harnam Singh Thakur(Judicial Member) and LN Gupta (Technical Member) held that indemnity obligation pertaining to a guarantee is not applicable in cases involving operational debt. An indemnity obligation refers to a commitment by one party (the indemnifier) to compensate another party (the indemnitee) for losses or damages...

Madras High Court: The Successful Working Of IBC Rests On Diligence And Integrity Of IRP And RP

The Madras High Court stressed and defined the role and responsibilities of the Interim Resolution Professional ('IRP') and Resolution Professional ('RP') to act fairly and transparently to secure the interests of all the stakeholders, particularly operational creditors. The single Judge Bench of Justice N. Seshasayee held: “It is time the IRPs and the RPs realized that...

NCLT Orders Insolvency Proceedings Against Himalayan Mineral Waters Following Rs 50 Crore Default

The National Company Law Tribunal (NCLT) recently ordered the initiation of insolvency proceedings against Himalayan Mineral Waters, following a plea by Jammu and Kashmir Bank. The decision came after Himalayan Mineral Waters, acting as the corporate guarantor for Leel Electricals, failed to repay a debt amounting to Rs 50 crore. This debt was owed to Jammu and Kashmir Bank which arose...