Mere Filing Of Closure Application By Liquidator Does Not Bar Tribunal's Inherent Powers To Modify Orders: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), allowed an appeal by modifying an order passed by the Adjudicating Authority (NCLT, Chennai). The NCLAT held that the mere fact that the liquidator has filed an application for closure of the liquidation proceedings does not curtail the tribunal's right to exercise inherent powers for meeting the ends of justice,...

Demand Notice Served On Registered Email Address Of Corporate Debtor Sufficient To Satisfy Requirement U/S 8 Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that the issuance of a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code) to the registered email address of the corporate debtor, as reflected in the Company Master Data, is sufficient to meet the requirements of Section 8 of the Code. Brief Facts: An...

Inadvertent Typographical Errors In Orders Passed By NCLT Can Be Corrected Under Rule 154 Read With Rule 11 Of NCLT Rules: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that inadvertent typographical errors in the orders passed by the National Company Law Tribunal (NCLT) can be corrected by exercising its powers under Rule 154 read with Rule 11 of the NCLT Rules, 2016. It further held that correcting such errors will not amount to review of the order. Brief...

Interest On Unilateral Invoices For Delayed Payment Doesn't Constitute Operational Debt In Absence Of Contractual Clause: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson), Barun Mitra (Member-Technical), and Arun Baroka (Member-Technical), has dismissed an appeal arising out of a decision by the NCLT, Chandigarh Bench-I. The bench held that in the absence of any contractual clause, interest on the unilateral invoices for the delayed payment cannot form part of the operational debt. The bench also ruled that the interest based on...

Application For Approval Of Resolution Plan Can't Be Rejected Solely Based On Withdrawal Of Consent By One Of Coc Members: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that an application seeking approval of a Resolution Plan, approved by an overwhelming majority of 98.15%, cannot be rejected solely due to the withdrawal of consent by one Committee of Creditors (CoC) member without granting the Successful Resolution Applicant (SRA) an opportunity to be heard. Brief Facts: This is an...

Amendment In Application U/S 7 Of IBC Cannot Be Permitted If It Amounts To Withdrawal Of An Admission: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), allowed an appeal arising out of a decision of the NCLT, Amravati Bench. The main issue before the tribunal was whether an amendment in a Section 7 IBC application can be allowed if it withdraws a pleading already raised before NCLT, which is held before the courts or the tribunals, or if it amounts to withdrawal of an...

Employment Contract Disputes Cannot Be Adjudicated By NCLT/NCLAT Under IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that a dispute arising from an employment contract concerning the determination of emoluments and salaries to be paid to an employee of a company after his termination cannot be adjudicated by the National Company Law Tribunal (NCLT) or the NCLAT under the Insolvency and Bankruptcy Code, 2016 (Code). Brief Facts: The present...

No Provision Under IBC Mandating Resolution Professional To Share Valuation Report With Suspended Management Of Corporate Debtor: 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 there is no provision in the Insolvency and Bankruptcy Code, 2016 (Code), that mandates the valuation report to be shared with the suspended management of the Corporate Debtor. Therefore, the Resolution Professional cannot be faulted for not providing the report. Brief Facts: M/s Medirad Tech India Ltd. (Corporate Debtor)...

SEBI-Imposed Penalty Qualifies As A 'Fine' & Is An 'Excluded Debt' U/S 79(15)(A) Of IBC: NCLAT Chennai

The National Company Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has upheld a decision passed by the Adjudicating Authority (NCLT, Hyderabad), admitting an application filed under Section 122(1) of the IBC, 2016. The Adjudicating Authority has earlier held that the penalty imposed by the SEBI will come under the ambit of 'fine' and will be treated as the 'excluded debt' for the purpose of...

No Cause of Action Arises Unless the Section 95 IBC Petition Is Admitted Against the Personal Guarantors: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has ruled that the personal guarantors cannot challenge the appointment of the resolution professional and other procedural actions taken under Section 95 to 100 of the IBC, 2016. The tribunal observed that these provisions are non-adjudicatory in nature, and no cause of action arises until an order under Section 100 is ...

NCLAT Dismisses Appeal Against DLF U/S 61 Of IBC For ₹4.65 Crores Debt, Says Multiple Exchanges Between Parties Prove Pre-Existing Dispute

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra and Mr. Arun Baroka (Technical Member) has dismissed an appeal filed by the contractor under Section 61 of the Insolvency and Bankruptcy Code, 2016 (Code) against DLF, claiming a debt of Rs. 4.65 crores, was dismissed on the grounds that multiple exchanges between the corporate debtor and the operational creditor prior to the issuance of the demand notice under...

Absence Of Assignee Name In Balance Sheet Of Corporate Debtor Does Not Negate Applicability Of Section 18 Of Limitation Act: 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 fact that the debt was assigned to Assignee and the assignee was not named in the balance sheets does not negate the applicability of Section 18 of the Limitation Act, 1963 (Limitation Act). It further held that the debt at the time of filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code)...