Belated Claims Of Homebuyers Can't Be Rejected When Reflected In Corporate Debtor's Records: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that claims of genuine allottees whose names are reflected in the corporate debtor's records cannot be rejected merely on the ground that the claims were filed belatedly. A bench of Justice Ashok Bhushan and Mr. Arun Baroka (Technical Member) held that “when the amount paid by the unit holders on the basis of valid allotment is reflected in the record of the Corporate Debtor, the judgment of “Puneet Kaur vs. M/s. K.V....

Non-Declaration Of Beneficial Ownership U/S 9 Companies Act Does Not Amount To Oppression & Mismanagement: NCLAT New Delhi

The National Company Law Appellate Tribunal (NCLAT), New Delhi, comprising Justice Yogesh Khanna (Member-Judicial) and Mr. Ajai Das Mehrotra (Member-Technical), has held that the non-declaration of the beneficial ownership under section 89 of the Companies Act, 2013, doesn't amount to oppression and mismanagement. The bench ruled that section 89 casts a duty upon the owner to make the declaration, and avoiding such a declaration makes him liable for penalties. The appeal was filed...

Amount Paid As Advance Consideration Constitutes Operational Debt Under Section 5(21) Of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that an amount paid as advance consideration constitutes an Operational Debt under section 5(21) of the IBC especially when the said amount is reflected in the audited balance sheet of the corporate debtor as advance without any qualifying note by the auditor. A bench comprising Justice Yogesh Khanna (Judicial Member) and Mr. Indevar Pandey (Technical Member) held that “a purchaser who has made advance payments for...

NCLT Cannot Recall Order Passed On Merits Under Rule 11 Of NCLT Rules 2016: NCLAT Chennai

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has held that an order passed on merits cannot be recalled by the NCLT under rule 11 of the NCLT Rules, 2016. Background The CIRP of the corporate debtor was initiated, and the appellant turned out to be the successful resolution applicant (SRA). Six homebuyers filed applications before the NCLT seeking execution of...

Suspended Directors' Duty To Sign Balance Sheets Continues During CIRP, Any Acknowledgment Extends Limitation Against Personal Guarantor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) New Delhi held that since the liability of the guarantor is co-extensive with that of the borrower, any acknowledgment of liability by the corporate debtor extends the limitation period against the guarantor also. The Tribunal also held that signing balance sheets is a statutory duty of the directors of a company from which they are not relieved even during the Corporate Insolvency Resolution Process (CIRP). Therefore, any acknowledgment...

Documents Not Filed Before NCLT Cannot Be Entertained As Evidence By NCLAT For Deciding Appeal: NCLAT Chennai

The NCLAT, Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), has held that any document available but not filed before the NCLT cannot be entertained as evidence by the NCLAT at the appellate stage. The CIRP of the corporate debtor was initiated, and due to the failure to receive the resolution plan, a liquidation order was passed by the NCLT Kochi. The liquidator was appointed, who discovered that certain transactions...

NCLT Lacks Jurisdiction To Recover Disputed Contractual Dues During Liquidation U/S 60(5) IBC: NCLAT New Delhi

The NCLAT, New Delhi, Principal Bench, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the NCLT doesn't have jurisdiction under section 60(5) of the IBC to recover disputed contractual dues during liquidation. Uttar Pradesh Rajkiya Nirman Nigam Ltd. (URNL) was working under the Uttar Pradesh Power Transport Corporation Ltd. (UPPTCL). URNL subcontracted the construction work of three power substations to Dev Denso Power Ltd. (Corporate...

NCLAT New Delhi Dismisses Korea Trade Insurance Corp's Insolvency Plea Against Amrit Polychmen

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has dismissed the Korea Trade Insurance Corporation (Ksure) plea for insolvency of Amrit Polychmen, saying that the Ksure was well aware of the pre-existing dispute before stepping into the shoes of JTC. Amrit Polychem Pvt. Ltd. (APL) placed three purchase orders with JT Corporation (JTC), Korea, for purchasing some...

NCLT Can Direct Legal Heirs & Power Of Attorney Holders To Execute Sale Deeds To Perfect Title Of Corporate Debtor's Asset: NCLAT

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the adjudicating authority can direct the legal heirs and the power of attorney holders to execute the sale deeds to perfect the title of the corporate debtor's asset under section 60(5) of the IBC, 2016. The appeal was filed against the order passed by the NCLT Chandigarh. The adjudicating authority ordered the legal heirs and the person holding the...

IIHL Tells NCLAT It Has RBI Nod For Name Change, Seeks 8 Weeks To Drop 'Reliance' Brand

IndusInd International Holdings Ltd (IIHL), the successful resolution applicant for Reliance Capital, informed the National Company Law Appellate Tribunal (NCLAT) on Friday that it has received approval from the Reserve Bank of India (RBI) to change the company's name and expects the rebranding process to be completed within eight weeks.The submission came amid an ongoing trademark dispute with Anil Ambani's Anil Dhirubhai Ambani Ventures Pvt Ltd (ADAVL), which claims ownership of the 'Reliance'...

NCLAT Cannot Record Settlement After Admission Of CIRP By NCLT: NCLAT New Delhi

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, comprising Justice N. Seshasayee (Member-Judicial) and Arun Baroka (Member-Technical), has refused to record the settlement between the parties and remanded the matter back to the adjudicating authority. The appeal was filed challenging the adjudicating authority's order, which was passed without hearing the appellant. By the impugned order, the NCLT admitted the respondent into the CIRP. The appellant...

NBFC's Non-Compliance With RBI Directions Cannot Defeat Classification Of Loan As Financial Debt: NCLAT New Delhi

The NCLAT, Principal Bench, New Delhi, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member-Technical), has held that the non-compliance with the RBI guidelines by an NBFC cannot defeat the classification of a loan as a financial debt u/s 7 of the IBC. Brief Background The appeal was filed challenging the impugned order passed by the NCLT Kolkata. In the impugned order, the adjudicating authority observed that the appellant failed to establish the nature of the...