NCLAT
Suspended Director Cannot Dispute Admitted Claim After Company Initiates CIRP On Same Debt: NCLAT
The National Company Law Appellate Tribunal has held that when a company itself triggers insolvency proceedings on the basis of a bank's debt, its suspended directors cannot later turn around and claim that the lender's dues are time-barred.“When the Appellant itself claim that insolvency resolution process be initiated against the CD on the basis of debt of SBI which application was filed in the year 2025, it is not open for the Appellant to turn around and say that there is no valid claim of...
Related Parties Misused Insolvency To Wipe Out Public Shareholding, NCLAT Sets Aside Techindia CIRP
The National Company Law Appellate Tribunal (NCLAT) at Delhi has set aside insolvency proceedings against Techindia Nirman Limited, holding that the Corporate Insolvency Resolution Process was fraudulently and collusively initiated by a related-party financial creditor to wipe out public shareholding. It imposed a cost of Rs 25 lakh on the financial creditor for abusing the insolvency framework. A coram comprising Judicial Member Justice Mohd. Faiz Alam Khan and Technical Members Arun Baroka...
NBFC Retains Financial Service Provider Status Despite Lending Ban, Insolvency Only On RBI's Plea: NCLAT
The National Company Law Appellate Tribunal (NCLAT), New Delhi, has held that a non-banking financial company does not lose its status as a financial service provider merely because the Reserve Bank of India has barred it from fresh lending. As a result, such an entity continues to remain outside creditor-initiated insolvency proceedings under the Insolvency and Bankruptcy Code.A bench headed by Chairman Justice Ashok Bhushan and Technical Member Barun Mitra dismissed an appeal filed by Equitas...
Insolvency Cannot Be Withdrawn After Liquidation Begins: NCLAT Reaffirms
The National Company Law Appellate Tribunal at Chennai has reiterated that an insolvency case cannot be withdrawn once liquidation has begun, holding that the law allows withdrawal only during the resolution stage and not after a liquidation order is passed. A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain dismissed an appeal on Wednesday , filed by Narayan Maheshwari, promoter of Veerganapathi Steels Pvt Ltd. Maheshwari had sought withdrawal of...
Failure To Serve Guarantor Insolvency Plea On RP Not Curable If It Prejudices Creditor Rights: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at New Delhi recently held that failure to serve copies of insolvency petitions on the tribunal-appointed resolution professional cannot be treated as a curable procedural lapse when it prejudices creditor rights. On this basis, the Appellate Tribunal dismissed appeals filed by personal guarantors of a corporate borrower for loans extended by Bank of Baroda, and upheld the rejection of their insolvency petitions. In insolvency cases...
Del Credere Agent Who Bears Buyer Default Risk Is Operational Creditor Under IBC: NCLAT Reaffirms
The National Company Law Appellate Tribunal (NCLAT) at New Delhi on Wednesday reiterated that a Del Credere Agent, an agent who guarantees payment to the supplier and bears the risk if the buyer defaults, is an operational creditor under the Insolvency and Bankruptcy Code and can initiate insolvency proceedings to recover unpaid dues. A bench of Judicial Member Justice Yogesh Khanna and Technical Member Indevar Pandey dismissed an appeal filed by the suspended director of Kirtiman Cements and...
Appellate Jurisdiction Confined To Orders Determining Rights Of Parties, Not Procedural Directions: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Chennai on Tuesday held that appellate jurisdiction under the Insolvency and Bankruptcy Code is confined to examining orders of the National Company Law Tribunal (NCLT) that adjudicate or determine the rights of parties, and does not extend to purely procedural or interlocutory directions such as issuance of notice. The Bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain, while dismissing the appeal...
Corporate Guarantee Need Not Be Invoked To File Claim In Guarantor's CIRP: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Delhi has held that a financial creditor can maintain its claim in the Corporate Insolvency Resolution Process (CIRP) of a corporate debtor that had stood as a guarantor for another company, even if the corporate guarantee was never invoked. It further held that invocation of a corporate guarantee is relevant only for initiating CIRP against a guarantor, not for admission or maintenance of a claim in an already ongoing CIRP.The bench...
Personal Guarantor Who Participated In NCLT Proceedings Can Appeal Insolvency Admission: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at New Delhi has held that a personal guarantor who was permitted to participate in proceedings before the Adjudicating Authority qualifies as an “aggrieved person” entitled to maintain an appeal under the Insolvency and Bankruptcy Code against the admission of insolvency proceedings. The ruling came in an appeal filed by Ashwin Smith, a former director and personal guarantor of CM Smith & Sons Ltd. Smith challenged the admission of a...
Breach of Settlement Terms No Ground To Recall Order Disposing Of Insolvency Proceedings: NCLAT
The National Company Law Appellate Tribunal (NCLAT) at Chennai has recently ruled that non-compliance with compromise terms cannot justify recall of a final order disposing of insolvency proceedings and must be addressed through execution proceedings. A bench of Judicial Member Justice Sharad Kumar Sharma and Technical Member Indevar Pandey held that once a case is finally disposed of on the basis of a settlement, the tribunal cannot be asked to recall its order merely because one party has...
Limitation For Filing Appeal Against NCLT Order Begins From Date Of Its Upload: NCLAT
The National Company Law Appellate Tribunal at Chennai has held that the limitation period for filing an appeal against an order of the National Company Law Tribunal (NCLT) begins from the date the order is uploaded on the tribunal's website. On this ground alone, it dismissed two appeals filed by Cerebra Integrated Technologies Ltd as time-barred. A coram comprising Judicial Member Justice Sharad Kumar Sharma and Technical Member Jatindranath Swain (Technical Member), rejected...