Reverse CIRP Can't Be Claimed As Right: NCLAT Upholds Insolvency Against Supertech Realtors

The National Company Law Appellate Tribunal (NCLAT) New Delhi upheld an admission order under section of the Insolvency and Bankruptcy Code, 2016 (IBC) against Supertech Realtors Pvt. Ltd. and dismissed an appeal filed by Ram Kishore Arora, its suspended director. A bench comprising Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) observed that once debt and default are established, the adjudicating authority is bound to admit the application and cannot compel the lenders to...

ED Cannot Retain Attached Assets After Approval of Resolution Plan : NCLAT

The National Company Law Appellate Tribunal on Tuesday held that any attachment of assets by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) ceases to have effect once a resolution plan is approved under the Insolvency and Bankruptcy Code (IBC).A coram of Chairperson Justice Ashok Bhushan, along with Technical Member Barun Mitra observed that the section 32A of the Code extinguishing all prior criminal liabilities of the Corporate Debtor will come into force...

Bank Cannot Retain One Company's Fixed Deposit For Group Company's Loan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that a bank cannot retain a fixed deposit belonging to one company to recover dues from another, even if they are part of the same group.The case involved Reliance Communication Infrastructure Limited (RCIL), which had placed a fixed deposit of Rs. 27.60 crore with the Industrial and Commercial Bank of China (ICBC). The bank refused to release the funds during RCIL's insolvency, claiming a lien over the FD to recover...

KMC Is Secured Creditor U/S 232 Of Kolkata Municipal Corporation Act: NCLAT New Delhi

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the Kolkata Municipal Corporation is a secured creditor by virtue of section 232 of the Kolkata Municipal Corporation Act, 1980. Background of the Case An asset of the corporate debtor was assessed for property tax by the Kolkata Municipal Corporation. However, part of the payment was due, which led to the issuance of the warrant of distress....

Salman Khan Withdraws ₹7.24 Crore Insolvency Plea Against Jerai Fitness After Settlement

Actor Salman Khan has withdrawn his ₹7.24 crore insolvency petition against Jerai Fitness Limited after both parties reached a settlement.On Wednesday, the National Company Law Appellate Tribunal (NCLAT) recorded the consent terms and allowed the withdrawal. The bench comprised Chairperson Justice Ashok Bhushan and Technical Member Arun Baroka.The dispute related to unpaid dues under a 2018 trade licence agreement, under which Jerai Fitness was granted rights to use the “BEING STRONG” trademark...

Time Spent In DRT Recovery Proceedings Cannot Be Excluded U/S 14 Of Limitation Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT) held that the benefit of section 14 of the Limitation Act cannot be extended to the creditor who had initiated recovery proceedings before the Debt Recovery Tribunal (DRT) under the Recovery of Debt and Bankruptcy Act, 1993. The Tribunal held that the benefit under section 14 of the Act can be given only when the forum before which the proceedings were initiated lacked jurisdiction or suffered from a defect of similar nature. A bench...

No Concept Of “Symbolic Possession” Under IBC, IRP Is Entitled To Take Actual Control Of Corporate Debtor's Assets: NCLAT

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Sharad Kumar Sharma (Judicial Member) and Jatindranath Swain (Technical Member) has dismissed an appeal filed by two promoters of M/s Orion Water Treatment Private Limited holding that there is no concept of symbolic possession under the Insolvency and Bankruptcy Code, 2016 (IBC) once Corporate Insolvency Resolution Process (CIRP) is initiated under section 10 of the IBC. The Tribunal further held that the ...

Only Existing Members Of Company Can Seek Relief Against Oppression & Mismanagement: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently ruled that only existing members of a company are entitled to seek relief for oppression and mismanagement under Section 244 of the Companies Act, 2013, even in so-called "exceptional circumstances."The tribunal set aside an order of the National Company Law Tribunal (NCLT), Chennai which had allowed two former members of the Madras Race Club to pursue such a claim.A coram of Justice Sharad Kumar Sharma and Technical...

ESI Amounts Are 'Trust Property', Not Part Of Corporate Debtor's Liquidation Estate: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial), Justice Mohammad Faiz Alam Khan (Member-Judicial), and Naresh Salecha (Member-Technical), has held that the ESI amounts are the “trust property” and not part of the corporate debtor's liquidation estate. The appeal was filed by the Regional Director, ESI Corporation, against the decision of the adjudicating authority. The adjudicating authority by the...

Assignment Of Tax Dues By GST Dept Doesn't Violate Article 265 Or GST Act If CIRP Has Been Initiated: NCLAT New Delhi

The NCLAT, Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial) and Mr. Naresh Salecha (Member-Technical), has held that the assignment of tax dues by the GST Department doesn't violate Article 265 or the GST Act if CIRP has been initiated. The corporate debtor was admitted into CIRP, and Ms. Dilip Mehta was appointed as the interim resolution professional, later confirmed as the resolution professional in furtherance to a section 10 application. The...

NCLAT Upholds Unilateral Set-Off In Commercial Transactions Based On Nominee Director's Signature On Financial Statements

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has upheld the unilateral set-off by the corporate debtor against a financial creditor, even when the term sheet excluded such set-off. The appellant filed a petition under section 7 of the IBC, seeking initiation of CIRP against the corporate debtor. It was the case of the appellant before the adjudicating authority that out of the...

Audit Report Is Not Conclusive Proof To Declare Commercial Transaction Fraudulent U/S 66(2) Of IBC: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Mohd. Faiz Alam Khan (Member-Judicial) and Arun Baroka (Member-Technical), has held that a transactional audit report alone cannot be conclusive proof of fraudulent trading under section 66 of the IBC, 2016. The CIRP of the corporate debtor was initiated, failing which the liquidation order was passed. The suspended director of the corporate debtor had some shares in two companies whose...