In the aforesaid judgment, the Hon’ble Supreme Court held that the “initiation date” as defined under Section 5(11) is different from the “insolvency commencement date” as defined under Section 5(12) of the Code. When the petition is filed under Section 7, 9 or 10 of the Code, it is “in personam” in nature i.e. only two parties are involved in the initiation stage i.e. the applicant creditor and the debtor. However, when the petition is admitted by the NCLT, it becomes “in rem” in nature i.e. the proceedings are no longer the preserve of the applicant creditor and the debtor rather all creditors become stakeholders in the process. Ultimately, the Hon’ble Supreme Court held that the NCLAT can exercise its inherent power under Rule of the NCLAT Rules, 2016 for the settlement between the parties, however, once a petition is admitted by the NCLT, the interests of all stakeholders of the Corporate Debtor must be taken into account.
The Hon’ble Supreme Court held that both the certified copy provided free of cost and the certified copy obtained upon an application are considered certified copies for the purposes of Rule 50 of the NCLT Rules. Whether the certified copy is made available free of charge or upon payment of costs, both are treated equally under Rule 50. A litigant who fails to apply for a certified copy cannot subsequently claim that they were waiting for the grant of a free copy to avoid the limitation period. The provisions of Rule 50 of the NCLT Rules place both free certified copies and copies obtained upon payment of fees on the same footing.
The SRA in the aforementioned appeal challenged the conditionality of the Letter of Intent (“LOI”) issued by the Resolution Professional wherein it was mentioned that the approval of the resolution plan by the CoC was subject to the order reserved by the Adjudicating Authority (“AA”). The Hon’ble NCLAT held that the said conditionalities cannot be a surprise to the SRA as the same was discussed and deliberated in the CoC meetings and it was clear that these conditionalities were an integral part of the Resolution Plan of the SRA. Further, it was also added that the AA rightly refused to entertain the objections of the SRA to the conditions in the LOI, since, withdrawal or modification of the Resolution Plan is not permissible, once the same is approved by the CoC. Section 33 of the Code, empowers the CoC to decide to liquidate the Corporate Debtor at any time before the approval of the Resolution Plan by the AA.
The Hon’ble NCLAT in the aforesaid judgment held that by not filing an Application under Section 8 of the Arbitration and Conciliation Act, 1996 at the time of filing a Reply to Section 7, the Corporate Debtor forfeits its right to file his Application under Section 8 of the Arbitration and Conciliation Act, 1996. The Hon’ble Appellate Tribunal further held that the pending Arbitration proceedings initiated by the Financial Creditor do not bar the Financial Creditor from filing a Section 7 application, nor does it restrict the Adjudicating Authority from proceeding to examine the debt and default in the Section 7 petition.
The Hon’ble NCLAT in the aforesaid judgment held that if CIRP being unsuccessful coming to an end and no order pertaining to the initiation of Liquidation Proceeding against the Corporate Debtor has been passed, the RP cannot take recourse to Section 54 of the Code for the dissolution of the Corporate Debtor, since, the dissolution is a step subsequent to the Corporate Debtor having been completely liquidated. The Hon’ble Appellate Tribunal further held that since the entity that has initiated the CIRP proceedings against the Corporate Debtor is not ready to proceed any further, the Tribunal directed the RP to intimate the RoC, requesting to strike off the Corporate Debtor from the Register of Companies.
The Hon’ble NCLAT held that the limitation to file an appeal under Section 61 of the Code shall not be calculated from the date when the order is uploaded on the NCLT website but rather from the date when the order was actually pronounced by the NCLT.
The NCLT in the captioned matter held that the Intervention Application is pre-mature and cannot be entertained at the stage when the proceedings under Section 7 of the Code are still pending before the Tribunal. The Tribunal further held that the appropriate remedy will be available to the applicant only after the Corporate Debtor is admitted into insolvency.
The NCLT in the captioned decided on the question of whether the recovery of property by the owner/landlord occupied by the Corporate Debtor is permissible under Section 14 of the Code. The NCLT held that the legislative intent of the moratorium is obviously to keep corporate debtors’ assets together during the resolution process and to ensure that the corporate debtor continues as a going concern. Any unilateral termination of a lease deed during the moratorium period militates against the goal of keeping the corporate debtor as a going concern. Even otherwise, possession of premises which is being used to keep the Corporate Debtor as a going concern cannot be disturbed in light of the moratorium u/s 14(1)1(d) of the Code.
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