SUPREME COURT

• In NATIONAL SPOT EXCHANGE LIMITED V. MR. ANIL KOHLI, RESOLUTION PROFESSIONAL FOR DUNAR FOODS LIMITED, CIVIL APPEAL NO. 6187 OF 2019, JUDGMENT DATED 14.09.2021, the Supreme Court held that considering the specific statutory provision contained in Section 61(2) of the Code, which provides that delay beyond fifteen days in preferring the appeal is not condonable, the same delay cannot be condoned even in exercise of powers under Article 142 of the Constitution of India. The Supreme Court noted that what cannot be done directly under the statute as per the statutory provisions, cannot be permitted to be done indirectly, in exercise of powers under Article 142 of the Constitution of India.
• In ANJALI RATHI AND OTHERS V. TODAY HOMES & INFRASTRUCTURE PRIVATE LIMITED AND OTHERS, SLP (C) NO. 12150 OF 2019, JUDGMENT DATED 08.09.2021, the Supreme Court held that the moratorium under Section 14 of the Code will not be applicable to the proceedings against the promoters of the corporate debtor. However, the Supreme Court noted that the court, at the present stage, could not pass any direction attaching the personal properties of the promoters of the corporate debtor as per the provisions of the resolution plan, as the resolution plan was yet to be approved by the adjudicating authority under the provisions of Section 31(1) of the Code.
• In EBIX SINGAPORE PRIVATE LIMITED V. COMMITTEE OF CREDITORS OF EDUCOMP SOLUTIONS LIMITED & ANOTHER, CIVIL APPEAL NO. 3224 OF 2020, JUDGMENT DATED 13.09.2021, the Supreme Court held that based on the plain terms of the Code, the adjudicating authority lacks the authority to allow the withdrawal or modification of the resolution plan by a successful resolution applicant or to give effect to any such clauses in the resolution plan. The Supreme Court further noted that enabling withdrawals or modifications of the resolution plan at the behest of the successful resolution applicant, once it has been submitted to the adjudicating authority after due compliance with the procedural requirements and timelines, would create another tier of negotiations, which will be wholly unregulated by the statute. The Supreme Court stated that the residual powers of the adjudicating authority under the Code cannot be exercised to create procedural remedies, which have substantive outcomes on the process of insolvency.
• In K.N. RAJAKUMAR V. V NAGARAJAN, CIVIL APPEAL NO.2901 OF 2021, JUDGMENT DATED 15.09.2021 the Supreme Court held that after the order to withdraw the corporate insolvency resolution process (CIRP), as contemplated under Section 12A of the Code, has been passed by the adjudicating authority, then the office of the resolution professional (RP) and the committee of creditors (CoC) in relation to the management of the corporate debt become functus officio.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL (“NCLAT”)

• In ISHITA HALDER V. MR. SIBA KUMAR MOHAPATRA, COMPANY APPEAL (AT) (INSOLVENCY) NO. 282 OF 2021, JUDGMENT DATED 18.08.2021, it was 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.
• In VINOD SEHWAG V. SIEMENS FINANCIAL SERVICES PRIVATE LIMITED & ANOTHER, COMP. APP. (AT) (INS) NO. 464 & 465 OF 2021, JUDGMENT DATED 27.08.2021, it was 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.

NATIONAL COMPANY LAW TRIBUNAL (“NCLT”)

• In M/S KALEDONIA JUTE AND FIBRES PVT. LTD. V. M/S AXIS NIRMAN AND INDUSTRIES LTD., COMPANY PETITION (IB) NO. 25/ALD/2020, JUDGMENT DATED 27.08.2021, the NCLT, Allahabad allowed the filing of an application under Section 7 of the Code despite the fact that the Company Court had passed a winding up order against the corporate debtor. The Tribunal held that a proceeding under Section 7 of the Code is an independent proceeding and has an overriding effect over winding up proceedings under the Companies Act, 2013.
• In AVANTHA POWER & INFRASTRUCTURE PVT LTD V AXIS BANK LTD, CP (IB) NO. 141 OF 2019, JUDGMENT DATED 16.08.2021, the NCLT, Hyderabad admitted an application under Section 7 of the Code filed against the corporate guarantor while rejecting the contention of the corporate debtor that the applicant had already filed its claim before the IRP of the principal borrower and such claim formed part of the principal borrower’s resolution plan. While underlining that the amount recovered under a resolution plan should not be claimed in an insolvency application as the primary requirement for admission of an insolvency application filed pursuant to the invocation of a corporate guarantee, the NCLT, Hyderabad reiterated the settled principle that approval of a resolution plan of the principal borrower does not per se extinguish the liability of the guarantor.