NCLT Is Bound To Appoint IRP Proposed By Corporate Debtor: Madras High Court

The Madras High Court on Monday held that the suggestions of the financial creditor, operational creditor, or corporate debtor with regard to the appointment of the IRP are liable to be accepted. While hearing a writ petition challenging the appointment of an Interim Resolution Professional (IRP) by the National Company Law Tribunal (NCLT), Chennai, the Madras High Court interpreted Sections 10 and 16 of the Insolvency and Bankruptcy Code, 2016. The petition was filed challenging the...

Liquidated Damages Clause Does Not Permit Automatic Recovery Of Full Amount, Actual Loss Must Be Proven: Delhi High Court

The Delhi High Court bench of Justice Manoj Kumar Ohri has held that the law mandates proof of actual loss despite the presence of an Liquidated Damages (LD) clause and does not allow automatic recovery of the entire LD amount upon breach. Therefore, the Petitioner's unilateral adjustment without adjudication was unlawful. The AT rightly held that such unilateral recovery does not obviate the need for proper adjudication of the LD claim.Brief Facts:The impugned award arose from Contract...

Limitation Act Applies To Proceedings Under Interest On Delayed Payments To Small Scale & Ancillary Industrial Undertakings Act: Telangana High Court

The Telangana High Court bench of Justice P. Sam Koshy and Justice N. Tukaramji have held that the provisions of the Limitation Act, 1963 are applicable to proceedings initiated under the Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. The Court clarified that the overriding effect under Section 10 of the 1993 Act applies only to the express provisions of that Act and does not exclude the applicability of the Limitation Act in the absence of any...

Calcutta High Court Upholds Order Dismissing Plea Challenging Shift Of NCLT Premises To New Town

The Calcutta High Court has upheld a single bench order declining a plea challenging the move to shift the NCLT Kolkata premises located near the High Court, to a new building in the city's New Town area, as proposed by the Ministry of Corporate Affairs.A division bench of Justices Rajarshi Bharadwaj and Apurba Sinha Ray held: "The question, however, is not whether the shift in location is beneficial or detrimental per se, but whether this Court can, in the exercise of its writ jurisdiction,...

'Facilitates Resolution Process': Madras HC Upholds Circular Allowing Creditor To Recommend Resolution Professional In Application U/S 95 Of IBC

The Madras High Court bench of Justice D.Bharatha Chakravarthy has held that the circular issued by Insolvency and Bankruptcy Board of India (IBBI) on 21.12.2023 under section 196 of the Insolvency and Bankruptcy Code, 2016 (Code), allowing the creditor to recommend the name of a Resolution Professional in an application filed under Section 95 of the Code cannot be deemed ultra vires the provisions of the Code, particularly Section 97, which states that in creditor-initiated insolvency...

Proceedings U/S 37 A Of FEMA Can't Be Continued During Moratorium U/S 33(5) Of IBC: Calcutta High Court

The Calcutta High Court bench of Justice Jay Sengupta has held that once a liquidation order against the Corporate Debtor is passed, all proceedings including those pending at the time of such order under the Foreign Exchange Management Act, 1999 (FEMA) cannot be continued, nor can any new proceedings be initiated, in view of the bar under Section 33(5) of the Insolvency and Bankruptcy Code, 2016 (Code). This is further reinforced by the non obstante clause under Section 238 of the Code,...

Delhi High Court Reduces Suspension Period Imposed By IBBI Disciplinary Committee On Insolvency Professional, Finds Penalty Disproportionate

The Delhi High Court bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela have reduced the suspension period imposed on the Appellant/Resolution Professional, noting that the Disciplinary Committee of IBBI overlooked material aspects and relied on incorrect data while imposing the penalty. It reduced the suspension to the period already undergone. Brief Facts The NCLT admitted an application under Section 9 of the IBC against GTHS Retails Pvt. Ltd. on...

Application U/S 94 Of IBC Cannot Be Entertained Against Sole Proprietorship Firms: Madhya Pradesh High Court

The Madhya Pradesh High Court bench of Justice Vivek Rusia and Justice Prem Narayan Singh has held that since sole proprietorship firms are not included in the definition of the corporate person under section 3(7) of the Insolvency and Bankruptcy Code, 2016 (Code), an application under section 94 of the Code cannot be entertained. Brief Facts: The petitioner is an owner of the property situated at House No.437-B, Katju Nagar, Ratlam, M.P. The aforesaid property was mortgaged as a...

Notice U/S 263 Of Income Tax Act Cannot Be Issued By Authority After Approval Of Resolution Plan U/S 31 Of IBC: Gujarat High Court

The Gujarat High Court bench of Justice Bhargav D. Karia and Justice D.N.Ray has held that after approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016 (Code), all liabilities prior to the approval of the plan stand extinguished. Therefore, the Income Tax Authority cannot be permitted to issue a notice under Section 263 of the Income Tax Act, 1961 (Act) seeking to revise the assessment after the approval of the Plan. Brief Facts: Amw Auto...

Moratorium Period Under IBC Does Not Bar Payment Of Compensation Under NI Act: J&K High Court Orders ₹4 Crore Interim Compensation

The Jammu and Kashmir High Court held that the declaration of a moratorium would not bar the complainant from filing a complaint under the NI Act. The court said that the debtor cannot take refuge under the Code to frustrate proceedings under the NI Act if he is found liable to pay compensation in the proceedings.Justice Puneet Gupta held that Section 14 of the IBC, which places a moratorium on the institution of suits or the continuation of pending suits, does not include criminal proceedings,...

[Noida Sports City Scam] Allahabad HC Lays Down Guidelines Regarding Rights Of Other Members Of Consortium When One Member Goes Into Insolvency

While directing CBI inquiry against officials of New Okhla Development Authority and various allottes/ builder involved in development of the Sporty City project in Noida, the Allahabad High Court laid down guidelines regarding the rights of other members of consortium, when one member goes into insolvency as the same is not provided in the Insolvency and Bankruptcy Code, 2016.Holding that the IBC is not indented to hamper projects of national importance, the bench of Justice Mahesh Chandra...

Banks Can Initiate Proceedings Under SARFAESI Act To Recover Loan If It Wasn't Party To Resolution Plan: Kerala High Court

The Kerala High Court bench of Justice Gopinath P. has held that a bank can initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to recover outstanding dues if it was not a party to the resolution plan approved under the Insolvency and Bankruptcy Code, 2016. The Court clarified that the bar against claims outside a resolution plan does not extend to third parties merely associated with the...