IBC Cases Weekly Round-Up: 28 August To 3 September, 2022

NCLAT Status Of Debtor, Attained Finality, Can't Be Altered Based On A Subsequent Judgment: NCLAT Delhi Case Title: Raghavendra G. Kundangar & Ors. v Shashi Agarwal & Anr. Case No.: Company Appeal (AT) (Ins.) No. 886 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), applied the Doctrine of Prospective Overruling while observing that when status of a debtor attains finality, the same cannot be altered on the basis of a subsequent judgment in different proceedings. NCLT had admitted the Corporate Debtor into insolvency under Section 7 of IBC for defaulting in payments in respect of supply of materials. Subsequently, the Supreme Court in Anuj Jain v Axis Bank Limited had held that debt arising out of supply of materials is operational debt and not financial. The NCLAT Bench declined to intervene in NCLT's order by applying Doctrine of Prospective Overruling. The NCLAT Bench further held that NCLT is exclusively invested with inherent jurisdiction to decide the petition filed either under Section 7, 9 or any of the provisions of IBC. Non Issuance Of Completion Certificate Amounts To Pre Existing Dispute: NCLAT New Delhi Case Title: Navkar Urbanstructure Ltd v. Niyojit Infratech Pvt. Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 800 of 2022 The National Company Law Appellate Tribunal bench comprising of Justice Ashok Bhushan, Justice M Satyanarayana Murthy and Mr. Barun Mitra while dismissing an appeal field by the Operational Creditor against the rejected of Section 9 petition held that the non-issuance of the completion certificate amounts to a pre existing dispute between the parties. It was contended on behalf of the Operational Creditor that it has provided various services to the Respondent such as trenching, ducting, etc and an amount of INR 8.29 Crores is due and payable by the Respondent to the Appellant. The Bench further held that when the Completion Certificate regarding Work Order was never issued which clearly indicated that the there is a pre existing dispute between the parties. Resolution Plan Can't Be Remanded Back To COC Over Hyper-Technical Grounds: NCLAT Delhi Case Title: Piya Puri & Ors. v Mr. Debhashish Nanda & Ors. Case No.: Company Appeal (AT)(Insolvency) No. 906 of 2022 The National Company Law Appellate Tribunal ("NCLAT"), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson), Justice M. Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), has held that remanding a resolution plan back to Committee of Creditors on the grounds of the procedural deviations raised by a dissenting minority in class of creditors, would render the CIRP a never ending process and is against the time bound resolution objective of the IBC. The Bench declined to remand back the revise Resolution Plan to CoC over hyper-technical grounds raised by minority dissenting creditors. The homebuyers had challenged the Plan stating that Regulation 16-A(9) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 was not followed. The Bench observed that Regulation 16-A(9) states that the Authroized Representative "may" seek preliminary views of creditors on any item in the agenda to enable him to effectively participate in the CoC meeting. The requirement to seek preliminary views was not mandatory. Creditor Entitled To Claim From Successful Resolution If It's Suit Is Decreed: NCLAT Delhi Case Title: Goltens India Pvt. Ltd. v Sudip Bhattacharya Case No.: Company Appeal(AT) (Insolvency) No. 571 of 2022 The National Company Law Appellate Tribunal (NCLAT) bench comprising of Justice Ashok Bhushan (Chairperson), Justice N Satyanarayana Murthy (Judicial Member) and Mr. Barun Mitra (Technical Member), has upheld the Adjudicating Authority's order to earmark Rs. 1 towards a contingent claim arising out of a recovery suit filed before the High Court. The NCLAT Bench held that if the suit is decreed then the creditor shall be entitled to claim from the Successful Resolution Applicant. Refiling After Removal Of Defects Is Not A Fresh Filing: NCLAT New Delhi Case Title: VR Ashok Rao v TDT Copper Ltd. Case No.: Company Appeal (AT) (Insolvency) No. 780 of 2022 A five judge bench of the National Company Law Appellate Tribunal (NCLAT) comprising of Justice Ashok Bhushan, Justice Rakesh Kunar, Justice M Satyanarayana Murthy, Ms. Shresha Merla and Mr. Kanthi Narahari held that refiling of an appeal after curing the defects beyond the period of seven days will amount to a fresh filing and any delay even beyond the period prescribed under Section 61 of the Insolvency & Bankruptcy Code, 2016 (IBC, 2016) or Section 421 of the Companies Act, 2013 in refiling the appeal can be condoned on...

IBC Cases Weekly Round-Up: 28 August To 3 September, 2022

Pallavi Mishra

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