Advance Given For Profit-Sharing In Real Estate Project Cannot Be Treated As 'Financial Debt': NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi upheld the decision passed by the National Company Law Tribunal (NCLT) by which it had rejected an application under section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) filed by M/s Meck Pharmaceuticals and Chemicals Pvt. Ltd. against M/s Accurate Infrabuild Pvt. Ltd. A Bench comprising Justice Ashok...

NCLT Erred In Deciding On Merits After Reserving Matter On Maintainability: NCLAT Orders Reconsideration Of Pleas

The National Company Law Appellate Tribunal (NCLAT) New Delhi set aside an order passed by the National Company Law Tribunal (NCLT) New Delhi which had dismissed applications filed by Rishi Gupta and Ashok Kumar Gupta seeking exclusion of certain financial creditors from the Committee of Creditors (CoC) on the ground that they were related parties to the corporate debtor. A...

Public Auction Not Compulsory For Sale Of Encumbered Assets If Charge Holders Consent: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench set aside an order passed by the National Company Law Tribunal (NCLT) New Delhi by which it had directed independent bidding for the sale of non-core assets of Arshiya Limited during its Corporate Insolvency Resolution Process (CIRP). The Tribunal held that public auction is not compulsory for the sale of encumbered...

Sale Of Secured Assets Completed Before Filing Of Insolvency Application Can't Be Invalidated By Moratorium: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench held that assets lawfully sold in an auction prior to filing of an insolvency application under section 94 of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be included in the debtors' estate or protected by moratorium under section 96 of the IBC. A Bench comprising Justice Ashok Bhushan (Chairperson) and...

Resignation as Director Doesn't Relieve Guarantor of Personal Guarantee Obligations: NCLAT

The National Company Law Appellate Tribunal at Delhi recently observed that a resignation from directorship does not absolve a person from obligations arising under a personal guarantee agreement. The tribunal held that a personal guarantee, once executed as a continuing obligation, remains binding even after the guarantor steps down from the company's board. A bench comprising...

Termination Of Contract During CIRP For Performance Default Not Covered By Moratorium: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that termination of a contract based on long performance defaults does not violate section 14 of the Insolvency and Bankruptcy Code, 2016 (IBC). A Bench comprising Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) dismissed the appeal filed by Mr. Pradeep Upadhyay, Liquidator of M/s...

One-Time Settlement Proposal Made After Expiry Of Limitation Does Not Extend Period U/S 18 Of Limitation Act: NCLT Indore

The National Company Law Tribunal (NCLT), Indore Bench, has held that the one-time settlement (OTS) proposal submitted after the expiry of the limitation period doesn't extend the limitation period under section 18 of the Limitation Act, 1963. The bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta observed that if a party makes an acknowledgment...

NCLT Mumbai Clears Reliance Retail's Consumer Brands Restructuring Plan

The National Company Law Tribunal (NCLT) at Mumbai has approved Reliance Retail's plan to reorganize its consumer products business. The move will shift the group's fast-moving consumer goods and brands division into a new arm called Reliance Consumer Products Limited, giving the business its own management and focus. In an order passed on November 6, a coram of Judicial Member Sushil...

Personal Guarantors Cannot Misuse Insolvency Process To Defeat Creditor Recovery: NCLT Chennai

The National Company Law Tribunal (NCLT), Chennai, has recently ruled that personal guarantors cannot misuse the insolvency process to delay or obstruct legitimate recovery actions by creditors. In an order passed on October 10 by a coram of Judicial Member Jyoti Kumar Tripathi and Technical Member Ravichandran Ramasamy, the tribunal noted that the Interim Resolution Professional (IRP)...

'Callous': NCLAT Pulls Up NCLT For Ignoring MCA Communication On Removal Of Promoter's Disqualification

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench set aside an order passed by the National Company Law Tribunal (NCLT) by which it had declared promoters of JC World Hospitality Pvt. Ltd. ineligible under section 29A of the Insolvency and Bankruptcy Code, 2016 (IBC) and quashed their resolution plan. The Bench comprising Justice Ashok Bhushan and Mr. Barun...

Liability Of Personal Guarantor Arises Only Upon Demand Made In Accordance With Guarantee Deed: NCLT Hyderabad

The National Company Law Tribunal (NCLT), Hyderabad Bench-II, has recently ruled that the liability of the personal guarantor to the corporate debtor arises only upon a valid demand being made in strict accordance with the terms of the guarantee deed. The bench of Rajeev Bhardwaj (Member-Judicial) and Yogendra Kumar Singh (Member-Technical) observed that, “Rule 3(1)(e) of...

Leasehold Rights Vest With Corporate Debtor Upon Amalgamation: NCLAT Upholds Inclusion Of WBHIDCO Land In Concast Steels' Liquidation Estate

The National Company Law Appellate Tribunal (NCLAT), New Delhi, has upheld the inclusion of leasehold land allotted by West Bengal Housing Infrastructure Development Corporation Ltd. (WBHIDCO) to Concast Ispat Ltd. (CIL) in the liquidation estate of Concast Steel and Power Ltd. (CSPL), thereby dismissing WBHIDCO's appeal and affirming that the transfer of the leased land was made with...