EPFO Dues From Pre-CIRP Period Cannot Be Claimed Based On Assessment Made During Moratorium: 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 EPFO dues of the pre-CIRP period cannot be claimed based on assessments made during the imposition of the moratorium. The appeal was filed by the RPFC-II, challenging the NCLT, Ahmedabad order, rejecting the application for setting aside the communication of the resolution professional, and rejecting the claim. The corporate debtor...

NCLT Cannot Allow Alternate Prayers After Rejecting Main Prayer Without Cogent Reasons: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Yogesh Khanna (Member-Judicial) and Ajai Das Mehrotra (Member-Technical), has held that the adjudicating authority cannot reject the main prayer without cogent reasons and allow the alternative prayers. The appeal was filed against the order of the NCLT, Mumbai Bench. The appellant argued that the adjudicating authority has erred in directing the meeting of the unsecured creditors of...

Adjudicating Authority Cannot Invoke S.60(5) IBC When Ingredients U/S 66 Are Not Made Out: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra), has held that the adjudicating authority cannot invoke section 60(5) of the IBC when ingredients of section 66 are not made out. Background of the Case The adjudicating authority by its order dated 22.01.2025, while acknowledging that the requirements of section 66 of the IBC were not satisfied, allowed the application by exercising its...

Suspended Director Cannot Halt Liquidation By Submitting Third-Party Settlement Offer After Expiry Of CIRP: NCLAT New Delhi

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that a suspended director cannot halt liquidation by submitting a third-party settlement offer after expiry of CIRP. The appellant contended that it had given the higher offer and has also filed the application seeking direction to consider its offer. It was submitted that considering the higher offer is in accordance with the objectives of the CIRP. ...

Distribution Among Financial Creditors Should Be Based On Pro Rata Basis As Per Vote Share: NCLAT New Delhi

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the distribution among financial creditors should be based on security interest or on a pro rata basis as per voting shares. The appeal was filed against the decision of the NCLT, Jaipur, wherein the Adjudicating Authority, by its impugned order, has rejected the I.A. 637/JPR/2023 filed by the appellant. The appellant is a secured financial...

NCLT's Reference To IBBI Order After Reserving Judgment Does Not Violate Natural Justice If RP Does Not Contest Order: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Rakesh Kumar Jain (Member-Judicial) and Naresh Salecha (Member-Technical), has observed that NCLT's reference to the IBBI order passed post reserving the judgment does not violate natural justice if the order is not contested by the resolution professional. The CIRP of the corporate debtor commenced with the appointment of an IRP, who was later confirmed as the RP. Subsequently,...

Application U/S 9 IBC Can't Be Rejected Over Issuance Of Demand Notice In Wrong Form When Invoices Contained In Notice Are Unchallenged: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that an application under Section 9 of the IBC cannot be rejected on a hyper-technical plea that, since the claim was based on invoices, the demand notice should have been issued in Form 4 of Rule 5 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, not in Form 3, especially...

Successful Auction Purchaser Liable To Pay 'True-Up' Charges After Sale Of Corporate Debtor As Going Concern: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain, Justice Mohammad Faiz Alam Khan and Mr. Naresh Salecha (Technical Member) has held that once the Corporate Debtor is taken over by a Successful Auction Purchaser on a going-concern basis and a sale certificate is issued by the Liquidator, the purchaser cannot avoid its responsibility to pay true-up charges payable under law.The present appeal has been filed under section 61 of the Insolvency and...

Right To Sue U/S 9 Of IBC Begins When MSME Arbitral Award Becomes Final: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the right to sue under section 9 of the IBC begins when the MSME award becomes final and operative. The MSME Council passed an arbitral award in favor of the appellant in the year 2011. The award was challenged before the city civil court and got dismissed. Then, the appeal was preferred before the Hon'ble...

Restoration Of Plea U/S 7 Of IBC Not Permissible After Payment Of Principal & Interest By Corporate Debtor Upon NCLT's Order: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that Once the principal amount mentioned in Part IV of the application under Section 7 of the IBC along with interest is paid in pursuance of an order of the NCLT, the financial creditor cannot seek restoration of the application merely on the ground that interest on the entire principal amount was not paid, which crossed 1 crore; therefore, the NCLT...

Plea U/S 9 IBC Can't Be Admitted Once Affidavit Confirming Settlement Between Corporate Debtor & Operational Creditor Is Filed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that once the Corporate Debtor entered into a settlement with the Operational Creditor to discharge its liability, for which an affidavit confirming the settlement was also filed, the Adjudicating Authority cannot, overlooking these facts, admit an application under Section 9 of the IBC. The present appeal has been filed against an order by which...

Rejection Of Legal Consultant's Claims By RP Over Absence Of Invoices In Corporate Debtor's Records Can't Be Set Aside: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Rakesh Kumar Jain, Justice Mohd Faiz Alam Khan and Mr. Naresh Salecha (Technical Member), has held that the rejection of the legal consultancy service provider's claim by the Resolution Professional, based on the absence of invoices for services in the Corporate Debtor's records, cannot be interfered with. Although the service provider was allotted flats/inventories in lieu of services, it is unclear whether...