Upholding the Validity of Provisions Related to Personal Guarantors Under IBC – Good for Lenders, Bad for Guarantors
by Zorawar Singh† and Hitesh Mankar††
corporate insolvency resolution process
10 Important Insolvency Law Judgments of 2023
by Vasanth Rajasekaran† and Harshvardhan Korada††
Cite as: 2024 SCC OnLine Blog Exp 1
Belated claims, even if allegedly due to fraud, may not be admitted once Resolution Plan is approved: NCLAT
The NCLAT rejected Resolution Professional’s reliance on Section 17 of the Limitation Act, 1963, as no fraud was found on the part of the Corporate Debtor.
Adjudicating Authority’s order for liquidation valid when Resolution Plan remains unapproved, and no alternative plan in CIRP exists: NCLAT
The Liquidator should endeavor to sell the Corporate Debtor as a going concern in the Liquidation Proceeding, and the appellant may participate by submitting its plan.
Closure of CIRP proceedings renders jurisdictional question regarding pre-CIRP dues irrelevant; NCLAT dismisses appeal
NCLAT observed that the issue raised by the appellant, while attractive, no longer had relevance after the closure of the CIRP proceedings.
Arbitrator’s fees to be treated as preferential payments even where CIRP proceedings are pending before NCLT: Madras High Court
Madras High Court said that if the Arbitrators are not paid their fees / costs on account of the moratorium order, the object of arbitration will get defeated, as competent Arbitrators will hesitate to become Arbitrators in a dispute involving Companies facing financial crisis.
In project wise insolvency, IRP/RP cannot seek unpaid Fees/Costs from members of CoCs of another project of Corporate Debtor: NCLAT
The NCLAT held that the appellant has no Locus Standi to make claim for any unpaid Fees/Costs from the members of the CoCs, as he is neither the RP in the project nor is connected with another project.
Corporate Debtor cannot constitute Committee of Creditors with a single Operational Creditor under IBC: NCLAT
NCLAT held that CIRP be closed with respect to the Corporate Debtor since not a single ‘Claim' was received by the IRP even after the public announcement.
DSK Legal advises Resolution Professional of DS Kulkarni Developers Ltd. with respect to its Corporate Insolvency Resolution Process
DSK advised and assisted Mr. Manoj Kumar Agarwal, Resolution Professional of DS Kulkarni Developers Limited (“DSKDL”) with respect to the corporate insolvency
Decoding Section 7 of IB Code for admitting an application for Corporate Insolvency Resolution Process
by Ankit Parhar† and Rashi Srivastava††
Cite as: 2023 SCC OnLine Blog Exp 55
Operational creditor cannot seek to initiate CIRP against Corporate Debtor when real dispute exists: NCLAT
The NCLAT set aside Adjudicating Authority’s order initiating CIRP of the Corporate Debtor.
Insolvency proceeding can be restored when Consent term entered between parties includes a revival clause: NCLAT
“When consent term itself contains clause for revival, non-giving liberty specifically for revival by the Adjudicating Authority is inconsequential”, held NCLAT
Entitlement of Dissenting Financial Creditors under IBC
by Vikas Mehta†
NCLT admits Go Air insolvency plea
A creditor has limited grounds to object to S. 10 of IBC application.
NCLT imposes exemplary cost of ₹ 5 Lakhs on Trimex Industries (P) Ltd for filing frivolous litigation
NCLT imposed cost to restain Trimex Industries (P) Ltd. from filing frivolous applications which consume Tribunal’s valuable resources and time.
Intent of Corporate Debtor irrelevant in establishing existence of preferential transaction: NCLAT
There is no need to prove any fraudulent intent for a preferential transaction as per S. 43 of the IBC.
To reject application under Sec. 9 IBC, a genuine pre-existing dispute must exist: NCLAT
The National Company Law Appellate Tribunal held that no pre-existing dispute regarding quality of supplied goods exist as the same was not raised before consumption of the goods.
[Reliance Capital (RCap) Resolution] CoC has power to negotiate and call for higher bid; NCLAT allows another round of bidding
The NCLAT held that even after completion of challenge mechanism under CIRP Regulation 39(1A)(b), the CoC retains its jurisdiction to negotiate with one or other Resolution Applicants, or to annul the Resolution Process and embark on to re-issue RFRP.
Do Third-party/shareholders have locus to challenge initiation of CIRP against Corporate Debtor? NCLAT answers
The NCLAT held that there is no law which allows a third party or shareholders to settle the claims of Financial Creditor on behalf of the Corporate Debtor, M/s McDowell Holdings Limited.
Advance paid for purchase of shares of Corporate Debtor does not fall under definition of Financial Debt: NCLT
NCLT held that the amount of advance paid for purchase of shares of the Corporate Debtor does not fall under the definition of Financial Debt as it was not disbursed against the consideration for the time value of money.