News (Corporate)

Section 9 IBC Upholds CIRP Initiation for Undelivered Goods Despite Advance Payment and Disputed Claims

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.

6 hours ago4 min read

Unsecured High-Value Transactions During Pending Insolvency Held Fraudulent Under Section 66 IBC

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.

2 days ago3 min read

NCLAT Quashes Bankruptcy Trigger for Guarantors — Grants Time to File Repayment Plan; Proceedings Referred to Section 106

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.

5 days ago3 min read

NCLAT Rules: Liquidator Cannot Enforce Disputed Receivables Summarily; Balance Sheet Entries Not Admission of Debt

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.

5 days ago4 min read

Limitation Cannot Be Revived by RP’s Acknowledgment During Prior CIRP – NCLAT Clarifies Section 7 IBC Claims

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.

6 days ago4 min read

NCLAT Limits Rule 11 Jurisdiction: Recall Allowed Only for Procedural Lapses, Not Merits

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.

6 days ago3 min read

IBBI Letter Cannot Override Section 34 IBC: NCLAT Affirms No Vested Right for RP to Become Liquidator

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.

6 days ago4 min read

Set-Off of Mutual Dues Allowed During CIRP Moratorium Under IBC – NCLAT Clarifies Operational Creditor Rights

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.

Dec 14 min read

Information Utility Upload Alone Cannot Extend Limitation: Distinct Invoices Remain Time-Barred Under Section 9 CIRP

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.

Dec 14 min read

Section 32A Cannot Undo Pre-CIRP PMLA Attachments: NCLAT Restricts Insolvency Immunity to Statutory Limits

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.

Nov 305 min read