Weekly Digest Of IBC Cases: 03rd June 2024 To 09th June 2024

HIGH COURTS Official Liquidator Must Adhere To Ethical Principles And Fairness To Discharge Their Duties Under IBC: Delhi High Court Case Title: Sundaresh Bhat vs Insolvency And Bankruptcy Board of India Case No.: W.P.(C) 14389/2022 The Delhi High Court bench of Justice Subramonium Prasad held that official liquidators must adhere to ethical principles and...

NCLT Delhi Bench Appoints Resolution Professional In Self-Initiated Insolvency Application Under Section 94(1) IBC

The National Company Law Tribunal Court-V, New Delhi bench of Mahendra Khandelwal (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) has appointed a Resolution Professional in an application filed under Section 94(1) of the Insolvency and Bankruptcy Code, 2016. The Personal Guarantor approached the bench for insolvency proceedings to be initiated...

Refundable Security Deposit Carrying Interest In Development Agreement Constitutes Financial Debt U/S 5(8) Of IBC: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi comprising Shri Justice Ashok Bhushan (Judicial Member) and Shri Barun Mitra and Shri Arun Baroka (Technical Members), has held that Refundable Security Deposit carrying interest in development agreement constitutes under Section 5(8) of IBC since the development agreement has the effect of a...

NCLAT Dismisses Appeal Raised By Byju's Investors Against Alleged Violation Of NCLT Directives

The National Company Law Appellate Tribunal ('NCLAT'), Chennai bench comprising Justice Sharad Kumar Sharma and Jatindranath Swain (Technical Member) dismissed the appeals brought by four investors since the Adjudicating Authority has not made any final decision on any significant rights against the investors and instead has merely requested them to file an affidavit to support their...

Allotment Of Shares At Lesser Price, An Oppressive Act Against Existing Members : NCLT Mumbai

The National Company Law Tribunal Mumbai Bench-I bench of Justice V.G. Bisht (Retd.)and Prabhat Kumar held that allotment of the shares at a concessional price is an oppressive act qua existing members to whom no such allotment has been made. The bench held that the allotment of the share value at a face value, which is less than its book value is not in accordance with the provision...

Preferential Transaction Under Section 43 Of IBC, Fraudulent Intent Need Not To Be Proved : NCLT Mumbai

The National Company Law Tribunal Mumbai Bench-I of Justice Shri V.G. Bisht and Prabhat Kumar has held that there is no need for any fraudulent intent for a preferential transaction under Section 43 of the Insolvency and Bankruptcy Code, 2016. The bench held that: “…….Corporate Debtor has paid the amount towards the antecedent debt during the look-back period to the...

Once Company Board Finds That Proposed Scheme Is Not Against Public Policy, NCLT Can't Sit In Appeal: NCLAT

The National Company Law Appellate Tribunal, Principal Bench of Justice Yogesh Khanna and Ajai Das Mehrotra held that if the Company Court finds no violation of any law and the proposed scheme is not objectionable or against public policy, then the NCLT lacks jurisdiction to question the commercial judgment of those who approved it. Brief Facts: The matter pertained to a scheme...

NCLT Mumbai Admits Personal Insolvency Application Against Videocon's Promoter Rajkumar Dhoot

The National Company Law Tribunal ('NCLT') Mumbai, comprising Justice V.G. Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member) has admitted personal insolvency application against Mr. Rajkumar Nandlal Dhoot, Promoter and Co-owner, of Videocon Industries Limited ('VIL'). The application was filed under Section 95 of the Insolvency and Bankruptcy Code, 2016 ('IBC') by...

IBBI Issues Guidelines For Appointment Of Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) issued guidelines for the process for appointing insolvency professionals (IPs) to roles such as interim resolution professionals (IRPs), liquidators, and bankruptcy trustees. Key among the provisions is the establishment of a panel of IPs, slated to be operational from July 1, 2024, through December 31, 2024. This panel,...

NCLT Allahabad Bench Initiates Insolvency Proceedings Against Jaiprakash Associates Limited, Accepts ICICI Bank's Petition

The Allahabad bench of the National Company Law Tribunal (NCLT) has directed the initiation of insolvency proceedings against Jaiprakash Associates Limited (JAL), a prominent firm within the Jaypee Group. This decision follows insolvency petitions filed by ICICI Bank in 2018 and State Bank of India (SBI) in 2022, aiming to recover debts amounting to...

Financial Creditor Can Initiate Simultaneous Or Independent Proceedings Against Principle Borrower And Personal Guarantor: NCLT Mumbai

The National Company Law Tribunal, Mumbai Bench-VI bench of K. R. Saji Kumar(Judicial Member) and Sanjiv Dutt (Technical Member) has held that the principal debtor and the surety are jointly and severally liable to the creditor which has the right to recover its dues from either or both of them simultaneously. The bench noted that there is no embargo under the Insolvency and...

NCLAT Delhi: Claims Of Tax Assessment Orders Passed During Moratorium Under IBC Can Be Considered As Unsecured Operational Debt

The National Company Law Appellate Tribunal ('NCLAT') Delhi, comprising Mr. Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member), and Mr. Indevar Pandey (Technical Member) held that the claims of Tax Assessment Orders passed during the moratorium under Sections 14 & 33(5) of Insolvency and Bankruptcy Code, 2016 ('IBC') can be considered...