OCDs Not Converted Into Equity By Notice Alone: NCLT Admits CIRP Against Arcturus Developers

The National Company Law Tribunal (NCLT) at Delhi has admitted insolvency proceedings against Arcturus Developers Private Limited for a default of Rs 1,258.73 crore, holding that a mere conversion notice does not legally convert debt into equity unless mandatory statutory steps are completed. A bench of Judicial Member Ashok Kumar Bhardwaj and Technical Member Reena Sinha Puri held that Optionally Convertible Debentures (OCDs) continue to retain the character of “financial debt” in the...

Labour Court Award Cannot Give Priority To Workmen's Dues Beyond 24 Months Before Liquidation: NCLT Indore

The National Company Law Tribunal, Indore Bench, has held that a labor court award by itself cannot give priority to old workmen's dues in liquidation under the Insolvency and Bankruptcy Code. The tribunal said that priority for workmen's dues is limited to amounts arising in the twenty-four months preceding the liquidation commencement date as per waterfall mechanismA coram of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta said a prior labour adjudication cannot...

Resolution Professional's Duty Is Limited To Taking Control of Assets, Not Improving Their Value: NCLT Mumbai

The National Company Law Tribunal (NCLT), Mumbai Bench, has recently clarified that a resolution professional's duties under the Insolvency and Bankruptcy Code are limited to taking custody and control of a corporate debtor's assets and do not extend to improving their value. The tribunal said the duties under Section 18 “only include to take control and possession of the assets of the Corporate Debtor” and do not require any effort “to improve the quality of the assets.” The observation was...

Oral Deposit Still Repayable: NCLT Allahabad Directs NBFC To Refund Over ₹30 Lakh To Depositor

The National Company Law Tribunal (NCLT) at Allahabad has directed a non-banking financial company (NBFC) to refund nearly Rs 30 lakh with interest to a depositor with whom the company did not have any written deposit agreement. The tribunal held that the absence of a written agreement cannot be used as a defense to withhold repayment once receipt of funds is admitted and there is utilization. Allowing a petition filed by Nidhi Agarwal against Shivam Traders and Hire Purchase Private...

NCLAT Upholds Late Claim In Shivam Continental Insolvency As Debt Was Disclosed In Information Memorandum

The National Company Law Appellate Tribunal (NCLAT) at Delhi has refused to interfere with an order admitting a late claim in an insolvency case. The tribunal said the delay did not, by itself, warrant interference since the liability was already disclosed to bidders during the process. A bench of Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra noted that the Information Memorandum had flagged the dues. It had also cautioned resolution applicants to make their own...

“Sat Over Our Order”: NCLAT Seeks ISPT India IRP's Reply In Contempt Case

The National Company Law Appellate Tribunal (NCLAT) at Chennai has sought a reply from Anil Kumar Khicha, the Interim Resolution Professional (IRP) of ISPT India Pvt Ltd, in contempt proceedings after the tribunal earlier found that an email issued by him in the insolvency proceedings was contemptuous. A bench comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain is dealing with the contempt proceedings arising from the insolvency proceedings of ISPT...

NCLAT Upholds Adani Power's ₹4,000 Crore Resolution Plan For Vidarbha Industries

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently upheld Adani Power Limited's Rs 4,000 crore resolution plan for Vidarbha Industries Power Limited, rejecting challenges raised by Western Coalfields Limited, a fuel supplier and operational creditor, and an employee representative. A bench of Chairperson Ashok Bhushan and Technical Member Barun Mitra held that changes made by Adani Power to the acquisition structure after the plan was approved by the committee of...

IBC Weekly Digest: 12th January to 18th January

SUPREME COURTPromise To Arrange Funds In Case of Default Does Not Make Promoter A Guarantor: Supreme CourtCase Title: UV Asset Reconstruction Company Limited v. Electrosteel Castings Limited Citation: 2026 LLBiz SC 3 Case Number: Civil Appeal No. 9701 of 2024The Supreme Court of India has held that a promoter's promise to arrange funds to help a borrower meet financial covenants does not amount to a contract of guarantee under the Indian Contract Act and cannot be used to fasten...

NCLAT Quashes NCLT Condition Restricting Use of Rs 20 Crore In Carnival Films Resolution Plan

The National Company Law Appellate Tribunal (NCLAT) at New Delhi has set aside an NCLT Indore order that approved Carnival Films Private Limited's resolution plan but barred the use of nearly Rs. 20 crore lying in the company's bank account to pay creditors. A bench of Judicial Member Justice Mohd. Faiz Alam Khan and Technical Member Arun Baroka said the NCLT had overstepped its jurisdiction. It noted that the NCLT had first recorded that the plan complied with Section 30(2) of the...

NCLT Ahmedabad Admits Another Blu-Smart Entity To Insolvency Over Rs 142 Cr Default

The National Company Law Tribunal (NCLT) at Ahmedabad has admitted Blu-Smart Charge Private Limited into the Corporate Insolvency Resolution Process after a default of Rs 142.95 crore on debenture payments. A bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma admitted a petition filed by Catalyst Trusteeship Limited under Section 7 of the Insolvency and Bankruptcy Code. The bench said the material on record clearly showed the existence of a financial debt and a...

Negative Cash Balances, Salary Mismatches Alone Don't Prove Fraud: NCLT Ahmedabad

The National Company Law Tribunal (NCLT) at Ahmedabad has held that accounting lapses such as a small negative cash balance, salary mismatches, and routing of funds through non-consortium banks do not, by themselves, amount to fraudulent or wrongful trading under the Insolvency and Bankruptcy Code. A coram of Judicial Member Shammi Khan and Technical Member Sanjeev Kumar Sharma said that every irregularity in accounts cannot be treated as fraud. On the issue of a negative cash balance, the...

Party Taking Over Contract Cannot Deny Liability By Claiming No Privity: NCLT Mumbai

The National Company Law Tribunal (NCLT) at Mumbai has held that where a party steps into the shoes of the original contracting entity and expressly assumes contractual obligations, it cannot subsequently evade liability by pleading absence of privity of contract.It said that a party that has solemnly entered into a written arrangement acknowledging specific obligations cannot be permitted to approbate and reprobate by later denying those very obligations.A coram of Judicial Member Nilesh Sharma...