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The NCLAT warned against manipulating the IBC for debt recovery purposes, as it would defeat the code’s purpose of rehabilitating Corporate Debtors.
IBBI notifies Insolvency and Bankruptcy Board of India (Liquidation Process) (Amendment) Regulations, 2024.
“Debt acknowledgment in balance sheets and OTS proposal demonstrated Corporate Debtor’s awareness of assignment, rendering technical challenges unfounded.”
While affirming the impugned order, the NCLAT granted the appellant option to pursue proceedings as per the agreement between the parties before an appropriate forum in accordance with the law.
The NCLAT reiterated that Commercial wisdom of the CoC is crucial in determining the viability and feasibility of a resolution plan.
The democratic principles of the determinative role of majority opinion are enshrined in the IBC, and objections by a minority within a class, when the majority has approved a resolution plan, have no legal standing.
NCLAT held that the impugned order passed by the Adjudicating Authority is at a prima facie stage and should not be treated as a final expression of opinion.
“If in the present case, the petition is entertained, it will eventually subvert the procedure laid down under the Insolvency and Bankruptcy Code, 2016 and the respondent in return will be denied the opportunity to present their case before the concerned NCLT.”
The NCLAT stated that prayers in general or in a very wide term or which is too elaborate as prayed in the applicant’s application may not require any consideration by the Adjudicating Authority.
Amount taken by the Directors of the Corporate Debtor in their personal capacity cannot be construed as ‘Financial Debt’ under S. 5(8) of the IBC.
by Ankit Parhar† and Rashi Srivastava††
Cite as: 2023 SCC OnLine Blog Exp 55
NCLAT directed the new Resolution Professional to protect the assets of the Corporate Debtor as required under S. 25(1) of the IBC
The NCLAT set aside Adjudicating Authority’s order initiating CIRP of the Corporate Debtor.
“The Adjudicating Authority does not appear to have committed any error in holding the alleged disputes claimed by the Corporate Debtor to be feeble as it is not supported by credible evidence.” NCLAT
While upholding NCLT’s order the NCLAT held that in the present case there is a debt which remained unpaid by the Operational Creditor.
A creditor has limited grounds to object to S. 10 of IBC application.
NCLT imposed cost to restain Trimex Industries (P) Ltd. from filing frivolous applications which consume Tribunal’s valuable resources and time.
There is no need to prove any fraudulent intent for a preferential transaction as per S. 43 of the IBC.