NCLAT Member Recuses From Hearing Appeal By Riju Ravindran Against Inclusion Of Aditya Birla, Glas Trust In CoC As Financial Creditors Of Byju's

Justice Sharad Kumar Sharma (Judicial Member), Judicial Member of of the National Company Law Appellate Tribunal (NCLAT) Chennai bench, has recused from hearing ed-tech start-up, Byjus' founder, Riju Raveendran's appeal against the order of the National Company Law Tribunal (NCLT) Bengaluru, which allowed Glas Trust and Aditya Birla Finance to be included in the Committee of Creditors (CoC) as Financial Creditors of Think & Learn (Parent Company of Byjus). Justice Sharad Kumar...

Delay Of 115 Days In Refiling Appeal Cannot Be Condoned On Frivolous Grounds: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that allowing refiling delay condonation on frivolous grounds would be an anathema to the timeliness and integrity of the liquidation process. In this case,the tribunal refused to condone delay of 115 days in refiling the present appeal. Brief Facts: The present application has been filed seeking condonation of delay of 115 days in...

Commercial Wisdom Of CoC To Distribute Amount Based On Security Interest Under Resolution Plan Cannot Be Interfered With: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that commercial wisdom of the CoC to distribute the amount under the Resolution Plan based on security interest of the respective financial creditors cannot be interfered with provided provisions of the code are complied with.Brief Facts:Birla Tyres Limited (corporate debtor) was admitted into insolvency on May 5, 2022. In the 16th meeting of the...

Creditors Are Not Barred From Enforcing Personal Guarantee Signed On Their Behalf By Trust: NCLAT

The NCLAT New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that creditors are not barred from enforcing a personal guarantee even if they were not party to the trusteeship deed signed on their behalf between a trust and the personal guarantors. Brief Facts: The present appeal has been filed against an order passed by the Adjudicating Authority by which an application under section 95 was admitted. Contentions: The...

Decision To Liquidate Corporate Debtor Cannot Be Faulted When Revival Is Not A Viable Option: NCLAT

The 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 when it becomes clear that revival is not a viable option, a decision taken by the CoC to liquidate the corporate debtor cannot be faulted. Brief Facts: Principal Borrower M/s Universal Textile Waterproof Company (India) (UTWC) was granted term loans and working capital facilities by SVC Cooperative Bank in which Shri...

NCLAT Upholds Rejection Of Application U/S 9 Of IBC Against Hindustan Unilever Limited

The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Chairperson) and Arun Baroka (Technical Member) has dismissed the appeal against the order rejecting the application under section 9 of the Insolvency and Bankruptcy Code filed against Hindustan Unilever Limited on the ground that the claims were below the threshold limit, time-barred and there was a pre-existing dispute. Background Facts The Appellant-Operational Creditor had filed an application against...

Withdrawal Of Liquidation Application Can Be Permitted When CoC Allows RP To File Application Seeking Extension Of CIRP Time Period: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that when the CoC has already taken decision to file an application for extension of CIRP time period and granting permission to publish Form G for third time, withdrawal of liquidation application by Adjudicating Authority can be permitted. Brief Facts: The present appeal has been filed against an order passed by the Adjudicating...

Liquidation Proceeds Must Be Distributed Amongst Secured Creditors Based On Admitted Claims U/S 53 Of IBC: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mita (Technical Member) has held that liquidation proceeds must be distributed as per section 53 of the IBC based on admitted claims of the respective secured creditors and cannot be distributed on the basis of security interest of different Secured Creditors. Brief Facts The corporate debtor was admitted into insolvency on the basis of an application filed by the State Bank of India under section 7 of...

Assets Of Subsidiary Can't Be Treated As Assets Of Holding Company In CIRP: NCLAT Sets Aside Order Directing Fresh Valuation Of Assets

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench comprising Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has observed that the assets of a subsidiary company cannot be treated as part of the assets of its holding company in a Corporate Insolvency Resolution Process (CIRP). The Tribunal held that the Adjudicating Authority does not have the jurisdiction to direct fresh valuation of such assets when they are owned by the subsidiary...

Claims Arising Under Section 11E Of Central Excise Act Cannot Be Treated As Secured Debt: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that claims arising under section 11E of the Central Excise Act, 1944 cannot be treated as a secured debt. It also held that “the 'Secured Interest' as defined under the Code excludes charges created by Operation of law. Section 11E of the Central Excise Act, 1944 is distinct from the provisions of 'Gujarat VAT Act, 2003' and therefore...

Delay Beyond 15 Days In Filing Appeal Cannot Be Condoned As Per Proviso To Section 61(2) Of IBC: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mita (Technical Member) and Mr. Arun Baroka (Technical Member) has held that delay in filing an appeal beyond 15 days as per section 61(2) proviso of the Insolvency and Bankruptcy Code cannot be condoned. Brief Facts: The present application has been filed seeking condonation of delay of 19 days in filing the appeal. The appellant submitted that the appeal has been filed within a period of limitation...

Insolvency Application Against Personal Guarantor Is Maintainable U/S 60(1) Of IBC Even If No CIRP Process Is Pending Against CD: NCLAT

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that an application under section 95 of the Insolvency and Bankruptcy Code (Code) against the personal guarantor is maintainable before the NCLT under section 60(1) of the code even if no CIRP or Liquidation process is initiated or pending against the corporate debtor before the NCLT. Brief Facts The present appeals have been filed against an order passed by the...