IBC Weekly Round Up [12th May-18th May 2025]

High Court Calcutta High Court Upholds Order Dismissing Plea Challenging Shift Of NCLT Premises To New Town Case: NCLT Advocates Bar Association & Ors. -Vs- Union of India & Ors Case No: MAT 469 of 2025 The Calcutta High Court has upheld a single bench order declining a plea challenging the move to shift the NCLT Kolkata premises located near the High Court, to a new building in the city's New Town area, as proposed by the Ministry of Corporate Affairs. A division bench of Justices Rajarshi Bharadwaj and Apurba Sinha Ray held: "The question, however, is not whether the shift in location is beneficial or detrimental per se, but whether this Court can, in the exercise of its writ jurisdiction, intervene in such matters of administrative discretion. The answer to that must be in the negative." Winding Up Petitions Under Companies Act Not At Irreversible Stage, Should Be Transferred To NCLT For Revival Under IBC: Himachal Pradesh HC Case Title: Elecon Engineering Company Limited Versus M/s Inox Wind Limited & Anr. Case Number: 2025:HHC:11215 The Himachal Pradesh High Court bench of Justices Tarlok Singh Chauhan and Sushil Kukreja has held that unless the corporate debtor's demise is inevitable or the winding-up proceedings under the Companies Act have reached an irreversible stage making revival impossible, every effort must be made to revive the company. Accordingly, all such winding-up petitions should be transferred to the National Company Law Tribunal (NCLT) for resolution under the Insolvency and Bankruptcy Code, 2016 (Code) under 434(1)(c) of the Companies Act. 'Facilitates Resolution Process': Madras HC Upholds Circular Allowing Creditor To Recommend Resolution Professional In Application U/S 95 Of IBC Case Title: Ashwani Kumar Bhatia Versus The Union of India and Ors. Case Number: W.P.Nos.14792 and 36480 of 2024 The Madras High Court bench of Justice D.Bharatha Chakravarthy has held that the circular issued by Insolvency and Bankruptcy Board of India (IBBI) on 21.12.2023 under section 196 of the Insolvency and Bankruptcy Code, 2016 (Code), allowing the creditor to recommend the name of a Resolution Professional in an application filed under Section 95 of the Code cannot be deemed ultra vires the provisions of the Code, particularly Section 97, which states that in creditor-initiated insolvency proceedings, the insolvency professional is to be nominated by the IBBI. This circular enhances the efficiency of the entire process. Penalty Orders U/S 270A Of Income Tax Act Cannot Be Issued After Approval Of Resolution Plan U/S 31 Of IBC: Gujarat HC Case Title: Technovaa Plastic Industries Pvt. Ltd. Versus Assistant Commissioner Of Income Tax, Circle, Gandhinagar & Ors. Case Number: R/SPECIAL CIVIL APPLICATION NO. 21289 of 2022 The Gujarat High Court bench of Justices Bhargav D. Karia and D.N.Ray has held that Penalty orders under Sections 270A, 271(1)(c), and 271AAC(1) of the Income Tax Act, 1961 (Income Tax Act) cannot be issued after the approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016 (Code). Once the Resolution Plan is approved by the Adjudicating Authority, all claims, including statutory dues, stand extinguished, and no further proceedings in respect of such dues can be initiated. NCLAT Majority's Consideration Of Debt Restructuring With Corporate Debtor Does Not Bar Individual Member From Filing Petition U/S 7 Of IBC: NCLAT Case Title: Apresh Garg Versus Indian Bank (erstwhile Allahabad Bank) & Ors. Case Number: Company Appeal (AT) (Insolvency) No. 396 of 2024 & I.A. No. 1822, 1977, 6619 of 2024 The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that the fact that a majority of consortium lenders are considering debt restructuring with the Corporate Debtor does not preclude an individual member from independently initiating insolvency proceedings under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) as per the facility agreement. State Entitled To Secured Creditor Status Under IBC Due To Statutory Charge Created U/S 48 Of GVAT Act: NCLAT Case Title: State Tax Officer Versus Premraj Ramratan Laddha & Ors. Case Number: Comp. App. (AT) (Ins) No. 720 of 2021 & I.A. No. 3172 of 2024 The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that after completion of the assessment of the Corporate Debtor under Gujarat Value Added Tax (GVAT) Act before Corporate Insolvency Resolution Process (CIRP), a charge in view section 48 of the GVAT Act is created by operation of law on the property of the Corporate Debtor in favour of the State Tax Officer therefore the dues of the State is...

IBC Weekly Round Up [12th May-18th May 2025]

Mohd Malik Chauhan

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