Judgements HELD by NCLAT following its previous decision in Mr. Ravi Ajit Kulkarni vs. State Bank of India, held that at the stage of the appointment of the RP under Section 99 in order to make recommendations for acceptance or rejection of an application under Section 95(1) of the Code, the adjudicating authority cannot record its finding on whether there has been a default by the debtor. The NCLAT, accordingly, partly allowed the appeal to set aside the finding of the adjudicating authority with respect to the existence of default in the repayment of loan by the debtor. October 15, 2021 Ibcode
Judgements Held that the requirement of a financial contract under Rule 3(1)(d) of the Insolvency and Bankruptcy Board of India (Application to Adjudicating Authority) Rules, 2016 (Adjudicating Authority Rules) is essential for satisfying the adjudicating authority on when the debt and interest become due and payable. The NCLAT, New Delhi held that in the absence of a written agreement, the applicant, which was a non-banking financial company (NBFC), had failed to establish that the transaction in question was a loan transaction. October 13, 2021October 15, 2021 Ibcode
Judgements NCLAT, citing the decision of the Supreme Court in Arcelormittal India Pvt. Ltd. v. Satish Kumar Gupta & Others [Civil Appeal No. 9402-9405 etc. of 2018], held that the resolution applicant does not have any vested or fundamental right to have its resolution plan approved. In this case, the NCLAT, New Delhi refused to interfere with the decision of the CoC, which in its commercial wisdom, had decided not to grant further time to the resolution applicant to present its resolution plan before the CoC. October 13, 2021 Ibcode
Judgements NCLAT, held that Section 20(2)(b) of the Code authorizes the RP to only re-enter into such contracts, concerning the corporate debtor, which were entered into before the commencement of corporate insolvency resolution process (CIRP). In this case, the NCLAT, New Delhi held that the RP/interim resolution professional (IRP) did not have the power to enter into a new contract for insurance, which was at a higher premium rate without the authorization of the CoC. October 13, 2021October 13, 2021 Ibcode
Judgements National Company Law Appellate Tribunal (NCLAT), New Delhi, citing the judgment of the Supreme Court in Dena Bank (now Bank of Baroda) v. C. Shivakumar Reddy and Another, held that the one-time settlement offers (OTS) by the corporate debtor would be considered as an acknowledgment under Section 18 of the Limitation Act, and hence, would extend the period of limitation from the date of such OTS proposal. The NCLAT, New Delhi further held that the fact that the payments are made in order to induce the bank to consider the OTS proposal, will not make a difference as to the applicability of Section 19 of the Limitation Act. October 13, 2021 Ibcode
Judgements NCLAT, New Delhi held that when an application for initiation of personal insolvency is filed under Section 95 of the Code, the Adjudicating Authority should send a “limited notice” to the personal guarantor so as to secure his presence. This would be followed by appointment of the Resolution Professional (RP) and submission of a report by the RP to the Adjudicating Authority. The purpose of this “limited notice” would be to intimate the personal guarantor about the filing of the application and the initiation of interim moratorium. However, no right of hearing will be provided to the debtor before the Adjudicating Authority at this stage. October 13, 2021October 13, 2021 Ibcode
Judgements Supreme Court held that the jurisdiction of the adjudicating authority under Section 31(1) of the Code is to determine whether the resolution plan, as approved by the committee of creditors (CoC), complies with the requirements of Section 30(2), and there is no equity-based jurisdiction with the adjudicating authority under the provisions of the Code. October 12, 2021 Ibcode
Judgements Supreme Court held that the statement of accounts/balance sheet/financial statements and the offer of a one-time settlement of a claim made within the period of limitation, constituted an acknowledgement of debt under Section 18 of the Limitation Act, 1963 (Limitation Act). October 12, 2021 Ibcode
Judgements IBC – Dispute Section 9 – It is important to separate the grain from the chaff – so long as a dispute truly exists in fact and is not spurious, hypothetical or illusory, the adjudicating authority has no other option but to reject the application – the Court is not required to be satisfied as to whether the defence is likely to succeed or not – Court also cannot go into the merits of the dispute August 14, 2021 Ibcode
Judgements IBC – Resolution plan approved by Committee of Creditors (CoC) – Jurisdiction of the Adjudicating Authority and Appellate Authority cannot extend into entering upon merits of a business decision made by a requisite majority of the CoC in its commercial wisdom – Nor is there a residual equity based jurisdiction in the Adjudicating Authority or the Appellate Authority August 14, 2021 Ibcode
