Related Party Can't Be Allowed Backdoor Entry Into CoC On Account Of Its Operational Debt: NCLT Kolkata

The NCLT, Kolkata bench of Justice Ashok Kumar Bhardwaj has held that once a Financial Creditor had been classified as a “related party”, it could not be allowed to gain entry into Committee of Creditors (CoC) on account of its Operational Debt as it would amount to defeating the legislative intent of keeping related parties out and running of CoC by external creditors. Reliance...

Decision To Consolidate CIRP Can Be Taken By CoC And Not By Suspended Director Of Corporate Debtors: NCLT Hyderabad

The NCLT Hyderabad bench of Sri Rajeev Bhardwaj (Judicial Member) and Sri Sanjay Puri (Technical Member) has affirmed that the decision to consolidate, or not, rests with the CoCs, who are not only better equipped to make such determinations but also have a vested interest in the outcome, and whose commercial wisdom is paramount in insolvency matters and beyond...

IBC Weekly Round-Up [25th November To 1st December, 2024]

Nominal Index: Mr. Bhagawant Narayan Naik, Versus Ritesh R. Mahajan and Ors., Company Appeal (AT) (CH) (Ins.) No. 394/2024 (IA Nos. 1072 & 1074/2024 & 1073/2024) Rakesh J Shah & Ors. Vs. Sanjay Kumar Agarwal & Ors., Company Appeal (AT) (Insolvency) No. 1490 of 2024 Mapletree Leather Goods Private Limited v. Savan Godiawala, C/o Deloitte Touche Tohmatsu India...

Pre-CIRP Dues Cannot Be Recovered After Admission Of Corporate Debtor Into Insolvency: NCLAT

The NCLAT Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that pre-CIRP dues cannot be recovered once the corporate debtor is admitted into insolvency due to moratorium under section 14 of the code. Any amount due to the corporate debtor can be recovered by filing claims before the IRP/RP as the case may...

Application U/S 9 Of IBC Cannot Be Admitted For Invoices Covered By Prohibited Period U/S 10A Of Code: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has affirmed that application under section 9 of the code cannot be admitted for the invoices covered by prohibited period under section 10A of the code. Brief Facts This Appeal has been filed against order passed by the...

No Proceedings Against Corporate Debtor Can Be Initiated Or Continued Over Claim Which Is Not Part Of Resolution Plan: NCLT Mumbai

The NCLT Mumbai bench of Anil Raj Chellan (Technical Member) and Kuldip Kumar Kareer (Judicial Member) has affirmed that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31 of the Code, the claims as provided in the resolution plan shall stand frozen and will be binding on all stakeholders. Thereafter, no person will be entitled...

Insolvency & Bankruptcy Code Does Not Override Public Body's Statutory Authority To Regulate Its Properties: NCLAT

The National Company Law Appellate Tribunal, New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Naresh Salecha (Technical Member) and Mr Indevar Pandey (Member) held a liquidator cannot not create sub-leases over public land without adhering to the statutory requirements. It was further held that Section 238 of the Insolvency and Bankruptcy Code, 2016 cannot override a...

If Interest On Principal Amount Crosses Threshold Limit, Application U/S 7 Of IBC Can Be Admitted: NCLAT

The NCLAT Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has affirmed that if interest on the principle amount disbursed to the corporate debtor crosses the threshold limit as provided under section 4 of the IBC, application under section 7 of the code can be admitted as interest is considered to be a disbursal against time value of...

Liquidator Can Recover Amount Which Belongs To Corporate Debtor By Filing Application U/S 60(5)(c) Of IBC: NCLAT

The NCLAT New Delhi bench of Mr. Justice Ashok Bhushan (Chairperson), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that liquidator can recover the amount of the corporate debtor by filing an application under section 60(5)(c) of the code before the NCLT as it is a matter which arises solely from or which relates to the insolvency of...

Written Agreement Not Mandatory To Prove Financial Debt If It Can Be Proved From Other Materials On Record: NCLAT

The NCLAT New Delhi bench of Mr. Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has affirmed that it is not necessary for financial debt to be proved by a written agreement if it can be established from other materials on record then application under section 7 can be admitted.In this case, the section 7 application of the financial creditor was rejected on...

Fraudulent Initiation Of CIRP Can Be Set Aside By NCLAT While Hearing Appeal U/S 61: NCLAT New Delhi

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member),Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that fraudulent initiation of the CIRP can be set aside by the NCLT or as a corollary by NCLAT also as they have jurisdiction to decide whether any proceeding under the code has been initiated fraudulently or not. In this case,...

Application U/S 7 Of IBC Cannot Be Admitted In Absence Of Debt And Default: NCLAT New Delhi

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that application under section 7 of the IBC cannot be admitted in absence of any debt and consequent default on the part of the corporate debtor. In this case, the corporate debtor had discharged the liability arising under the agreement despite this an application...