Successful Bidder Can't Claim Exemptions From Statutory Compliance Merely On Grounds Of Being Successful Bidder Of Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) has held that a successful bidder is not entitled to claim exemptions from statutory compliances merely on the ground that the Appellant was a successful bidder of the corporate debtor. The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by National Company Law Tribunal (NCLT) seeking...

Findings Of NCLAT While Remanding Case Can't Operate As Res Judicata When No Conclusive Opinion Is Expressed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that the findings of the Appellate Tribunal in earlier proceedings cannot operate as res judicata when no conclusive opinion was expressed, and the NCLT's order was set aside only for non-consideration of relevant materials and submissions. The present appeals have been filed against an order passed by National Company Law Tribunal (NCLT) by which...

Revival Of Company Petition Permissible On Default Of Settlement Terms Despite Absence Of Liberty In NCLT's Withdrawal Order: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Mohd Faiz Alam Khan and Mr. Indevar Pandey (Technical Member) has held that a petition withdrawn pursuant to a settlement agreement between the parties can be revived if the corporate debtor fails to make payment as per the settlement terms, where the agreement clearly provides for such revival in case of default. The absence of express liberty granted by the NCLT in the withdrawal order is immaterial. The...

Refund Of Security Amount Can't Be Considered As Acknowledgment Of Debt U/S 19 Of Limitation Act: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that refund of security amount which was given by Operational Creditor for carrying out the work contract cannot be considered as an acknowledgement of debt under section 19 of the Limitation Act. The present appeal has been filed under section 61 of the Insolvency and Bankruptcy Code, 2016 (IBC) against an order passed by National Company Law...

Borrower Can't Plead Non-Service At Previous Address When Change Of New Address Is Not Communicated To Creditor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice N. Seshasayee (Judicial Member) and Arun Baroka (Technical Member) has held that it is the bounden duty of the borrower to inform the creditor of any change in address. If demand notices and other important communications are sent to the previous address, the borrower cannot plead non-service when delivery of essential documents is established from the record.” The present appeal has been filed under section...

Adjudicating Authority Must Consider Application U/S 65 Of IBC On Merits When Allegations Of Malicious Initiation Of CIRP Are Raised: 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 an application under Section 65 of the IBC is filed and allegations of malicious or fraudulent initiation of the CIRP are raised, the Adjudicating Authority is bound to consider it on merits and cannot reject it solely on the ground of lack of locus. The present appeal has been filed against an order passed by the National Company Law ...

Liquidation Is Only Recourse When Sole Financial Creditor Is A Related Party: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Mr. N. Seshasayee (Member-Judicial), Mr. Arun Baroka (Member-Technical), and Mr. Indevar Pandey (Member-Technical), has held that the liquidation is the only recourse when the sole financial creditor is a related party. Background of the Case The corporate debtor, M/s/ STROS Esquire Elevators & Hoists Pvt. Ltd., was incorporated as a joint venture vehicle by virtue of an...

NCLAT Judge Recuses From Case Saying He Was Approached By 'Higher Judiciary Member' To Favour A Party

The judicial member of National Company Law Appellate Tribunal, Chennai Bench, Justice Sharad Kumar Sharma, recused from hearing an insolvency matter, after observing that he was approached by "one of the most revered members of the higher judiciary" seeking an order favouring a particular party. The August 13 order passed by a bench of judicial member Justice Sharad Kumar Sharma and technical member Jatindranath Swain states:"We are anguished to observe, that one of us, Member...

Employees Can't Be Paid Gratuity Dues In Addition To Payouts Allocated To Them In Resolution Plan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that the employees of the corporate debtor cannot be paid gratuity dues in addition to the proposed payouts allocated to them in the Resolution Plan when it is clearly provided in the Resolution Plan. The present appeal has been filed by the Appellants on behalf of employees of the corporate debtor against an order by which the Resolution Plan was...

Once Assignment Of Debt Is Declared Illegal, Assignee Loses Its Rights To File Application U/S 7 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member) has held that when the assignment of debt from the bank to the applicant is found to be illegal and unauthorized, the very basis of filing an application under Section 7 of the IBC is knocked out, and such an applicant cannot be allowed to file the application on the basis of financial creditor's status. These two appeals have been filed against an order...

Mere Rescheduling Of Payment Through New Agreement Does Not Change Repayment Obligations Under Original Agreement: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Ashok Bhushan and Mr. Barun Mitra (Technical Member), has held that mere rescheduling of the payment date through an agreement does not alter the repayment obligations under the original Common Loan Agreement, nor does it result in novation. Therefore, an application under Section 7 of the IBC can be filed based on the original agreement. The present appeal has been filed under section 61 of the Insolvency...

Resolution Professional's Failure To Individually Inform Homebuyers About Insolvency Proceedings Goes Against Principles Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT), New Delhi Bench of Justice Rakesh Kumar Jain, Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the failure of the Resolution Professional to individually inform the homebuyers about the insolvency proceedings as mandated under Regulation 6A of the CIRP Regulations, 2016, so they could file their claims on time, goes against the spirit of the IBC and vitiates the entire proceedings especially ...