Investors Who Were Promised Assured Returns Qualify As Financial Creditors U/S 5(7) Of IBC: NCLT Indore

The National Company Law Tribunal (NCLT), Indore Bench, comprising Mr. Mohan P. Tiwari (Member-Judicial) and Mr. Sanjeev Sharma (Member-Technical), has held that the deposit schemes with assured returns amount to financial debt and the investors promised assured returns qualify as the financial creditor under section 5(7) of the IBC, 2016. Background of the...

Guarantors Cannot Plead Non-Service Of Demand Notice After Admitting Receipt Before Supreme Court: NCLAT Chennai

The NCLAT, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has set aside the order of the NCLT, Amravati, and restored the SBI's insolvency petition against the personal guarantors of M/s Seven Hills Health Care Pvt. Ltd. Background of the Case The financial creditor (State Bank of India) had provided...

Listing of Mediated Settlements Within 14 Days is Directory Not Mandatory : NCLAT

The National Company Law Appellate Tribunal (NCLAT) has recently clarified that the 14-day period under Rule 26(1) of the Companies (Mediation and Conciliation) Rules, 2016, for listing a mediated settlement before the Tribunal, is only advisory and not mandatory.A coram comprising Judicial Member Justice Yogesh Khanna and Technical Member Ajai Das Mehrotra made the clarification while hearing...

Belated Claims Of Homebuyers Can't Be Rejected When Reflected In Corporate Debtor's Records: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that claims of genuine allottees whose names are reflected in the corporate debtor's records cannot be rejected merely on the ground that the claims were filed belatedly. A bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that “when the amount paid by the unit holders on the basis of...

Non-Declaration Of Beneficial Ownership U/S 9 Companies Act Does Not Amount To Oppression & Mismanagement: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Yogesh Khanna (Member-Judicial) and Mr. Ajai Das Mehrotra (Member-Technical), has held that the non-declaration of the beneficial ownership under section 89 of the Companies Act, 2013, doesn't amount to oppression and mismanagement. The bench ruled that section 89 casts a duty upon the owner to...

NCLT Rejects Byju's' Plea to Halt Aakash's Proposed Rights Issue

The National Company Law Tribunal (NCLT) at Bengaluru, has recently refused to grant interim relief to insolvent ed-tech Byju's (Think and Learn Pvt Ltd) in its bid to stop Aakash Educational Services Ltd. (AESL) from proceeding with a proposed rights issue.The order, allows AESL to hold its Extraordinary General Meeting (EGM) on October 29 as scheduled.The order was passed by a coram...

Amount Paid As Advance Consideration Constitutes Operational Debt Under Section 5(21) Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that an amount paid as advance consideration constitutes an Operational Debt under section 5(21) of the IBC especially when the said amount is reflected in the audited balance sheet of the corporate debtor as advance without any qualifying note by the auditor. A bench comprising Justice Yogesh Khanna (Judicial Member)...

NCLT Cuttack Orders Initiation Of CIRP Against Bhilai Jaypee Cement Limited

The National Company Law Tribunal (NCLT), Cuttack Bench, Deep Chandra Joshi (Member-Judicial) and Banwari Lal Meena Banwari Lal Meena (Member-Technical) has initiated the CIRP against Bhilai Jaypee Cement Limited, a subsidiary of the debt-ridden group Jaiprakash Associates Limited, for a default of Rs 45 crore. The petition under section 9 of the IBC was filed by...

NCLT Cannot Recall Order Passed On Merits Under Rule 11 Of NCLT Rules 2016: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has held that an order passed on merits cannot be recalled by the NCLT under rule 11 of the NCLT Rules, 2016. Background The CIRP of the corporate debtor was initiated, and the appellant turned out to be the...

Suspended Directors' Duty To Sign Balance Sheets Continues During CIRP, Any Acknowledgment Extends Limitation Against Personal Guarantor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that since the liability of the guarantor is co-extensive with that of the borrower, any acknowledgment of liability by the corporate debtor extends the limitation period against the guarantor also. The Tribunal also held that signing balance sheets is a statutory duty of the directors of a company from which they...

Consumer Complaint Is Not Maintainable Against Corporate Debtor During Subsistence Of Moratorium: Bombay High Court

The Nagpur Bench of the Bombay High Court, comprising of Justice M.M. Nerkiar, has held that the consumer complaint before the District Consumer Dispute Redressal is not maintainable if the insolvency of the corporate debtor has been admitted during the continuance of the moratorium. The petition was filed against the order of the District Consumer Dispute Redressal. In the...

Can Multi-State Cooperative Societies Submit Resolution Plans Under IBC? Supreme Court To Consider

The Supreme Court recently directed that the Central Registrar of Multi-State Cooperative Societies be made a party to the appeal filed by a multi-state co-operative society against a National Company Law Appellate Tribunal (NCLAT) judgment that had held the society ineligible to submit a resolution plan for a company under the Insolvency and Bankruptcy Code, 2016.A bench of Justice JB...