REEDNews

NCLAT held that once a resolution plan authorises the CoC to pursue avoidance applications, a suspended director has no locus to oppose substitution of the Resolution Professional, and no separate hearing is required.

NCLAT held that a Section 7 IBC application is barred under Section 10A if the date of default stated in the demand notice falls within the COVID-19 exclusion period, and cannot be modified by oral extensions or subsequent demands.

NCLAT held that disputes relating to shareholding and immovable property lie outside insolvency jurisdiction, and that disclosure of pending High Court litigation in the Information Memorandum is adequately ensured through the duties of the Resolution Professional.

NCLAT held that a rejected prospective resolution applicant lacks locus standi to challenge the CIRP or seek re-issuance of the Information Memorandum, and alleged defects therein cannot invalidate the resolution process absent a violation of Section 30(2) IBC.

NCLAT held that amendment of the date of default in a pending Section 95 personal guarantor insolvency application is permissible even at an advanced stage, as it facilitates effective adjudication without finally deciding limitation or foreclosing statutory defences.

The NCLAT held that a former shareholder who has ceased to be a member cannot maintain an oppression and mismanagement petition based on a private MoU, and that Section 89 non-compliance attracts only statutory penalties.

The NCLAT clarified that a liquidator cannot claim fixed monthly remuneration without CoC or SCC approval, holding that fees under Regulation 4 of the Liquidation Regulations are payable only upon actual asset realisation or distribution.

The NCLAT held that balance sheet entries and acknowledgments can establish financial debt for Section 7 IBC even in the absence of a formal loan agreement.

The NCLAT held that cryptic rejection of a Section 9 IBC application without notice or reasons is impermissible, and reasoned adjudication after hearing is mandatory.

The Supreme Court held that Section 32A IBC overrides PMLA attachment to enable restitution of properties to successful resolution applicants for protecting innocent home buyers, subject to statutory exceptions.

The NCLAT held that partial disbursement and valuation disputes are irrelevant once financial debt and default are proved, and admission of CIRP under Section 7 IBC is justified.

The Supreme Court held that the Central Registrar must be impleaded to decide a cooperative society’s eligibility as a resolution applicant under the IBC, and no final plan approval can be granted pending such determination.

NCLAT held that a Section 7 IBC application filed beyond three years from the date of default is time-barred, and pendency of DRT proceedings does not justify exclusion of time under Section 14 of the Limitation Act.

Delhi High Court held that a company under winding up is liable to bear the Official Liquidator’s security expenses, as directors’ verified statements and undertakings are binding.

NCLAT Chennai held that applications dismissed for non-prosecution cannot be revived after dissolution, as recall would amount to an impermissible review under the IBC.

The Bombay High Court held that ownership under SARFAESI transfers only upon issuance of a sale certificate, and an interim moratorium under Section 96 IBC bars completion of an auction sale.

The NCLAT, Chennai Bench, held that a consequential appeal under the IBC is not maintainable once the foundational challenge is withdrawn and the resolution plan stands approved with the appellant’s participation.

The Gujarat High Court held that the NCLT has exclusive jurisdiction under Section 60(5)(c) IBC to decide disputes relating to possession and validity of lease or licence arrangements forming part of a corporate debtor’s assets.

The Supreme Court held that forfeiture in a liquidation sale is lawful where a bidder accepts an extension of time subject to forfeiture and later defaults, as such forfeiture flows from statutory powers under the IBC.

The NCLAT held that joint meetings for considering repayment plans of personal guarantors do not amount to group insolvency where each plan is independently examined and rejected on commercial grounds.

The Kerala High Court stayed a liquidation auction after holding that valuation of plant and machinery by an ineligible valuer was prima facie unsustainable under the valuation rules.

The NCLAT held that a belatedly filed homebuyer claim cannot be ignored where the allotment and payments are reflected in the Corporate Debtor’s records, and such liabilities must be considered through an addendum to the resolution plan prior to its approval.

The High Court permitted a one-time ex-gratia welfare payment to Company Paid Staff of the Official Liquidator from surplus Common Pool Funds, holding that such equitable relief was permissible where no creditor interest was prejudiced and no precedent was created.

CIRP claims earlier rejected as time-barred cannot be reopened on remand, as limitation finality and strict IBC timelines prevail; prospective Regulation 13(1B) amendments do not create new rights.

In a significant clarification on homebuyer rights under the IBC, NCLAT ruled that once a resolution plan is remanded to the CoC, the earlier approval stands nullified. The Adjudicating Authority must independently examine all pending homebuyer claims, and rejection based solely on the previous CoC approval is contrary to the remand directions and legally untenable.

NCLAT ruled that acknowledgment of outstanding dues in balance sheets constituted a valid statutory acknowledgment under Section 18 of the Limitation Act. Since the guarantee remained continuing, the limitation period against the guarantor stood extended, making initiation of insolvency proceedings under Section 95 maintainable.

NCLAT upheld that consent terms signed post-mediation are enforceable, rejecting later claims of coercion or incomplete annexures, reinforcing the binding nature of settlements in company disputes.

A Section 9 CIRP petition was ruled non-maintainable where dispute existed over invoice reconciliations and appropriation of payments, as insolvency cannot adjudicate contested claims.

The Appellate Tribunal held that delayed payment of confirmed auction consideration in liquidation attracts mandatory interest and bidders cannot seek exemption after accepting “as-is-where-is” sale conditions.

NCLAT, New Delhi upheld CIRP under Section 9 IBC, ruling that advance payment for undelivered goods constitutes operational debt, and the absence of pre-existing dispute validates insolvency proceedings.

Executing unsecured high-value transactions during ongoing insolvency, without reasonable expectation of recovery and contrary to commercial prudence, was held to constitute fraudulent and wrongful trading under Section 66 IBC.

The appellate tribunal clarified that bankruptcy proceedings against a personal guarantor cannot be allowed to continue merely for failure to file a repayment plan, particularly where parties mutually extend time to file a compliant proposal. Any earlier admission under Section 123 must be recalled, and the process must revert to the statutory stage under Section 106 IBC.

The appellate tribunal held that disputed receivables cannot be enforced in liquidation through summary jurisdiction under Section 60(5) IBC. It clarified that financial statement entries do not constitute admission of liability, requiring the Liquidator to pursue contractual or judicial remedies.

The Appellate Tribunal held that Section 7 claims cannot rely on RP acknowledgments from prior CIRP to revive limitation. Limitation is calculated from the statutory default date, and petitions filed beyond this period remain time-barred.

The Appellate Tribunal held that Rule 11 jurisdiction cannot be used to recall an order decided on merits, as inherent powers extend only to correcting procedural lapses such as lack of notice or fraud.

The Appellate Tribunal held that the IBBI’s 18.07.2023 letter cannot supersede Section 34 IBC and that an RP has no vested right to be appointed as liquidator, rendering mid-process replacement unwarranted when liquidation has advanced with CoC backing.

The Appellate Tribunal clarified that an Operational Creditor may claim set-off of admitted mutual dues while filing Form-B during CIRP, even during the moratorium, provided such dues are undisputed, quantifiable and arise from identifiable transactions.

The NCLAT ruled that IU uploads cannot extend limitation for independent invoices under Section 9 of the IBC. Each invoice forms a distinct cause of action, and partial payments or invoice-specific acknowledgments cannot revive claims barred by limitation, making the petition time-barred.

Section 32A immunity under the IBC does not override PMLA attachments that were validly imposed and attained finality before commencement of CIRP; only PMLA authorities can grant relief, and NCLT/NCLAT cannot order their release.

The NCLAT confirmed that a fully completed property transfer—backed by registered documents, payment and possession—left no surviving rights for the legal heir, thereby validating the Adjudicating Authority’s direction under Section 60(5) to execute the Sale Deed during resolution plan implementation.

NCLAT held that a bona fide pre-existing dispute bars Section 9 admission and the Adjudicating Authority’s role is limited to assessing plausibility.

NCLAT held that property under an unexecuted sale agreement remains part of the liquidation estate, and the Liquidator may recover the original title deeds.

NCLAT held that absence of proof of time-value disbursal, repayment triggers, or default prevented classification of the transaction as a financial debt under Section 5(8) IBC.

NCLAT held that recourse factoring supported by an irrevocable undertaking constitutes a financial debt under Section 5(8)(e), affirming admission of the Section 7 application.

NCLAT set aside the admission of a Section 9 petition after finding that the Adjudicating Authority failed to consider a clear pre-existing dispute evidenced in the Section 8 reply and related emails.

NCLAT held that delay in submitting an EoI, when duly condoned without altering eligibility norms, does not constitute a material irregularity and restored the CoC-approved resolution plan.

The Karnataka High Court held that liquidation cannot extinguish a workman’s vested entitlement to back wages crystallised under an award, and ordered release of the deposited amount with interest.

The Supreme Court held that affidavit defects in a Section 7 IBC filing are curable and cannot justify rejection unless the Adjudicating Authority first issues mandatory notice under Section 7(5)(b).

NCLT Kolkata held that breach of a settlement agreement cannot revive an extinguished operational debt and therefore cannot be used to trigger CIRP under Section 9 of the IBC.

The outgoing Chief Justice of India disclosed that a retired High Court Chief Justice had attempted to influence a judicial member of the NCLAT in a corporate matter. As the implicated judge retired before a formal inquiry could be commenced, the issue has been placed before the new CJI Surya Kant for administrative action.