NCLAT Refuses Stay On Jaiprakash Associates' Insolvency Proceedings

The National Company Law Appellate Tribunal (NCLAT) has declined to grant a stay on the National Company Law Tribunal's (NCLT) order admitting Jaiprakash Associates Limited (JAL) into the insolvency resolution process. The Allahabad bench NCLT held that the restructuring proposals and the financial health of JAL were insufficient reasons to delay insolvency proceedings. In 2017,...

Acceptance Of Partial Payments Doesn't Negate Default Or Legitimacy Of Insolvency Proceedings: NCLAT

The National Company Law Appellate Tribunal, Principal Bench of Justice Ashok Bhushan(Chairperson), Barun Mitra (Technical Member), and Arun Baroka(Technical Member) held that the acceptance of partial payments does not negate the default or the legitimacy of the insolvency proceedings. Brief Facts: The Corporate Debtor, a company specializing in developing Special...

Madras High Court: Every Claim Of Operational Creditors Includes Right To Their Property Under Article 300A Of The Constitution

The Madras High Court comprising of Justice N. Seshasayee held that every claim by operational creditors involves a right to their property under Article 300A of the Constitution of India. Background Facts: National Sewing Thread Co. Ltd. (Petitioner), a public limited company registered under the MSME Act, 2006, was under the Corporate Insolvency Resolution Process under Section 7...

CoC Is Empowered To Liquidate Corporate Debtor Any Time After It's Constitution Or Before Resolution Plan Is Confirmed: NCLT Delhi

The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has held that CoC in the legislative scheme of the Insolvency and Bankruptcy Code, 2016 is empowered to take the decision to liquidate the Corporate Debtor, any time after its constitution and before confirmation of the...

Adjudicating Authority Can't Venture Into Appreciation Of Merit Of Pre-Existing Dispute, Not Empowered By Section 9 IBC: NCLAT

The National Company Law Appellate Tribunal Principal Bench of Justice Yogesh Khanna and Ajai Das Mehrotra held that the adjudicating authority cannot venture into the appreciation of the merit of pre-existing dispute and embark upon the adjudication of rival contentions of parties. The bench held that Section 9 of Insolvency and Bankruptcy Code doesn't empower the adjudicating...

NCLT New Delhi Initiates Insolvency Proceedings Against Revital Reality Private Limited For Financial Debt And Default

The National Company Law Tribunal Court V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr Sanjeev Ranjan (Technical Member) has initiated insolvency proceedings against Revital Reality Private Limited noting that it failed to deliver possession of the residential units within the stipulated time frame. The bench noted: “…it is clear that the applicants...

Madras High Court: Clean State Theory Not Applicable To Undisclosed Creditors Left Out Due To Negligences Of IRP Or RP

The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory shall not apply to undisclosed creditors to protect them from the deliberate non-disclosure or silence of the suspended board of directors or negligence of Interim Resolution Professional ('IRP') or Resolution Professional ('RP') towards disclosing their...

Madras High Court: MSME Corporate Debtor Can't Misuse Clean Slate Theory To Withhold Information When Its Management Had A Duty To Disclose

The Madras High Court bench of Justice N. Seshasayee held that an MSME Corporate Debtor cannot exploit the Clean Slate Theory by withholding information, especially when its management, which remained in control, had a duty to disclose such information. Background Facts: National Sewing Thread Co. Ltd. (Petitioner), a public limited company registered under the MSME Act, 2006,...

Madras High Court: Clean State Theory Only Protects Third-Party Successful Resolution Applicant And Not Suspended Board Of Corporate Debtor From Future Claims

The Madras High Court bench of Justice N. Seshasayee held that the Clean State Theory only protects the third party – Successful Resolution Applicant ('SRA') and not the suspended board of the Corporate Debtor from uncertainties of future claims. The High Court remarked: “It should not be forgotten that CST is a judicial coinage to protect the third...

Resolution Applicant Not Bound To Pay Past Dues When No Claim Is Made, Even If Electricity Dues Are Statutory In Character: Meghalaya High Court

The Meghalaya High Court has held that a State authority cannot compel a successful resolution applicant under Insolvency and Bankruptcy Code, 2016 (I&B Code) to pay past electricity dues, if the State authority has not made any claim in respect of its dues under approved resolution plan.The Petitioner-Company, Reliance Infratel was admitted to insolvency and a resolution plan was...

Madras High Court: Adjudicating Authority Must Exercise Jurisdiction Akin To Revisional Jurisdiction To Assess The Correctness Of COC's Actions

The Madras High Court bench of Justice N. Seshasayee held that though the Adjudicating Authority may not substitute the commercial wisdom of the Committee of Creditors ('CoC'), however, it must exercise jurisdiction akin to revisional jurisdiction to assess the correctness of the actions taken by the CoC. Background Facts: National Sewing Thread Co. Ltd. (Petitioner), a...

Madras High Court Urges Parliament To Assess Efficiency Of IBC And Consider Recovery Percentage From Successful Resolution Processes

The Madras High Court bench of Justice N. Seshasayee urged the Parliament to assess and evaluate the working efficiency of the Insolvency and Bankruptcy Code, 2016 ('IBC') and questioned whether the Parliament has considered the general recovery percentage achieved from a successful corporate debtor resolution process. Background Facts: National Sewing Thread Co. Ltd. (Petitioner),...