Procedural Direction To File An Affidavit On Ledger Accuracy Is Not Appealable U/S 61 Of IBC: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that the procedural direction requiring the appellant to file an affidavit confirming the accuracy of certain ledger transactions could not be appealed. The appeal was preferred u/s 61 of the IBC. Background of the Case The appellant, who happens to be the erstwhile director of Samaara Leathers Pvt. Ltd., has...

Ratification Of IRP Fees By CoC Can Be Implied From Meeting Minutes And Conduct: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has addressed the question of whether ratification of fees and expenses payable to an Interim Resolution Professional (IRP) must be express and recorded formally, or it can be implied from the conduct and minutes of the CoC. The bench held that the formal ratification is not mandatory if the CoC's conduct and meeting...

CIRP Cannot Be Sustained If Default Is Cured Before Admission Of Section 9 Application: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member – Technical), has ruled that the application u/s 9 of the IBC, 2016, cannot be sustained if the operational debt is settled before the date of admission. Background of the Case Section 9 IBC application, seeking CIRP of the corporate debtor, was filed by the operational creditor. During the pendency of proceedings, the operational creditor...

NCLAT Grants Extension Of CIRP Timeline To Enable Voting On Revised Resolution Plan

M/s Shri Ram Switchgears Limited (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) on 29.02.2024. The Adjudicating Authority granted an extension of the CIRP up to 24.05.2025. Before the expiry of the timeline on 24.05.2025, the Committee of Creditors (“CoC”) in its meeting held between 09.05.2025 and 14.05.2025, resolved with 96.94% vote share to seek a 30-day extension and exclusion of 148 days due to delays caused by the replacement of Interim...

Financial Creditor Can't File Same Claim Twice For Same Loan In Multiple Insolvency Proceedings Without Proper Adjustment: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that a financial creditor is not permitted to file the same claim twice for the same loan in multiple insolvency proceedings without proper adjustment. In the present case, the Appellant filed the same claim in two separate proceedings without disclosing the claims filed in an earlier ...

Intervention Application U/S 60(5) Of IBC Can't Be Entertained Beyond Limitation Period Of Three Years: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Indevar Pandey (Technical Member) has held that Intervention Application under section 60(5) of the Insolvency and Bankruptcy Code, 2016 (IBC) cannot be entertained beyond the limitation period of 3 years. The present appeal has been filed by the Corporate Person through its Liquidator against an order passed by National Company Law Tribunal (NCLT) by which it...

Reopening Case Reserved For Orders Without Hearing Affected Party Violates Principle Of Audi Alteram Partem: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has held that an order reserved for the pronouncement cannot be reopened and altered based on a unilateral mention made by a non-party without hearing the affected party. Background of the Case The appellant filed four applications before the adjudicating authority against the four individuals, who were the personal...

Amount Paid By Co-Applicant From Account Other Than That Of Corporate Debtor Is Not Covered U/S 43 Of IBC, Reversal Can't Be Directed: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that the amount paid by the co-applicant of the corporate debtor during the Corporate Insolvency Resolution Process (CIRP), from an account other than that of the corporate debtor, cannot be directed to be reversed by the Adjudicating Authority, as it does not fall under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC). ...

NCLAT Rejects Odisha GST's ₹740 Crore Claim, Holding That Second Appeal U/S 42 IBC Is Not Maintainable: NCLAT Chennai

The National Company Law Appellate Tribunal, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member – Judicial) and Jatindranath Swain (Member – Technical), has considered the issue of whether the GST department could file a second appeal u/s 42 of the IBC without rectifying defects in the first appeal. The bench observed that a second appeal u/s 42 of the IBC is not maintainable if the defects in the first appeal have not been rectified. Brief Background The corporate...

Upfront Payment Payable By Corporate Debtor With Interest On Breach Of Agreement Terms Amounts To Financial Debt U/S 5(8) Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that disbursement of upfront payment to the corporate debtor to enable it to purchase refinish products along with a condition that the amount would be paid with interest at the rate of 12% per annum if the corporate debtor failed to purchase the products worth Rs. 1 crore over four...

Corporate Debtor Can't Avoid Repayment Obligations On Ground Of Irregularities U/S 186 Of Companies Act In Disbursing Loan: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the Corporate Debtor cannot avoid its obligation to repay the debt on the ground that section 186 of the Companies Act was not followed while disbursing the loan. The aim of this provision is to protect the shareholders, not to shield the corporate debtor from its repayment ...

Govt Authority Can't Seek Status Of Secured Operational Creditor Based On Dues Arising From HPGST Or CGST Acts: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that GST dues arising from the Himachal Pradesh Goods and Services Tax Act (HPGST) and Central Goods and Services Tax (CGST) cannot be given precedence over other dues under the Insolvency Proceedings. Therefore, based on such dues, the government authority cannot seek the status of a secured...