Application U/S 95 Cannot Be Rejected On Grounds Of Pendency Of One Time Settlement Proposal: 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 pendency of One Time Settlement Proposal (OTS) which is yet to be accepted, cannot be a ground to refuse initiation of insolvency process against the personal guarantors. Brief Facts These two appeals have been filed...

IBC Weekly Round-Up [18th November To 24th November 2024]

Nominal Index Siti Networks Ltd. vs. Rajiv Suri (INTERIM APPLICATION (LODG.) NO. 31055 OF 2024 IN APPEAL NO. 597 OF 2016 IN SUIT NO. 2295 OF 2002), 2024 LiveLaw (Bom) 600 M/s Vedic Projects Pvt. Ltd. Versus Shri Sutanu Sinha, Company Appeal (AT) (Insolvency) No.1927 of 2024 K.H. Khan & Anr. Vs. Art Constructions Pvt. Ltd. & Ors.,Company Appeal (AT) (Insolvency) No. 1116...

Performance Pay Does Not Qualify As Operational Debt For Which Proceedings U/S 9 Of IBC Cannot Be Initiated: NCLAT

The NCLAT Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) has held that a variable claim like performance pay which is not certain and has to be determined based on the performance of the employee will not be an operational debt as it is not the payment due therefore proceedings under section 9 of the IBC cannot be initiated for such...

Revisiting Resolution Plan After Commencement Of Liquidation Process Is Against Principle Of Procedural Finality: NCLAT Chennai

The National Company Law Appellate Chennai comprising of Justice Sharad Kumar Sharma, (Member Judicial) and Jatindranath Swain (Member Technical) dismissed two appeals filed by the Corporate Debtor seeking to challenge the order of NCLT, Bangalore by which it was directed to be put into the liquidation process and second to challenge the order of the same tribunal which dismissed the...

NCLT Is Not Right Forum To Decide Whether Closure Of Factory Under Industrial Dispute Act Was As Per Law: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson), Barun Mitra (Technical Member) and Arun Baroka (Technical Member) has held that the Adjudicating Authority is not the right forum to decide whether closure of the factory was in accordance with law. Such an issue should have been raised before the relevant authority under the Industrial Disputes Act and not...

Property In Possession Of Corporate Debtor Sold When Petition U/S 7 Of IBC Was In Consideration Cannot Be Excluded From Assets: NCLAT

The NCLAT Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) has held that property that is sold which was in possession of the corporate debtor immediately before the judgment in a petition under section 7 of the IBC was reserved cannot be excluded from the purview of the assets of the corporate debtor. Brief Facts The...

Official Liquidator Cannot Institute S. 61 Proceedings To Challenge Directions Issued To IBBI: NCLAT Chennai

The National Company Law Appellate Chennai comprising of Justice Sharad Kumar Sharma (Member Judicial) and Jatindranath Swain (Member Technical) dismissed an appeal filed by the Liquidator of the Corporate Debtor M/s RLS Alloys Pvt. Ltd stating that the appeal is a pre-mature appeal and that the Liquidator cannot institute a Section 61 proceedings to challenge the directions given to...

Filing Petition U/S 10 Of IBC Subsequent To Action Taken Under SARFAESI Act Cannot Be Termed Malicious Or Fraudulent: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has held that merely because proceeding under Section 13, sub-section (2) and (4) of the SARFAESI Act has been initiated by the creditor prior to filing of Section 10 application, cannot be a ground to hold that Section 10 application is filed with malicious and fraudulent intent to be...

Allotment Of Commercial Space By Corporate Debtor Through Unregistered Allotment Letter Remains Their Asset, Can't Be Excluded From Resolution Plan: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member) has held that allotment of commercial spaces by the corporate debtor through unregistered documents like allotment letter, lease deed etc.cannot divest the CD of their ownership. They would continue to remain the assets of the CD therefore they cannot be excluded from the Resolution...

Since Shareholders Of Corporate Debtor Do Not Fall Within Definition Of “Aggrieved Party”, Appeal Filed U/S 61 Of IBC Not Maintainable: NCLAT

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member),Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) affirmed that a shareholder of the company is not the “aggrieved party” as per the provisions of the Code therefore appeal filed by him under section 61 of the Code would not be maintainable.Brief FactsThis appeal has been filed by...

CoC Has Authority To Modify Resolution Plan To Comply With Directions Of Supreme Court: NCLAT

The NCLAT has affirmed that the CoC is empowered to modify the resolution plan in order to comply with the directions issued by the Supreme Court. In this case,while resolution plan was pending before the Adjudicating Authority, the Supreme Court passed its decision in State Tax Officer in which it was held that the debts owed to a secured creditor, which would include the State under...

NCLAT Judge Records In Order His Brother's Message For Favour, Recuses From Matter

A judicial member of the National Company Law Appellate Tribunal has recused from hearing a matter after his brother messaged him requesting favourable orders in the case.Interestingly, in the recusal order, the judge extracted the entire message verbatim.The extraordinary event took place before the bench presided by Justice Sharad Kumar Sharma at the NCLAT Chennai Bench. Justice Sharma...