Relevant Judgements – National Company Law Appellate Tribunal

• Archana Deepak Wani Vs. Indian Bank [ca (at) (ins) No. 301 Of 2023]

  It was held that the scheme of Insolvency and Bankruptcy Code, 2016 (Code) clearly indicates that both the Principal Borrower and the Guarantor become liable to pay the amount when the default is committed. When default is committed by the Principal Borrower, the amount becomes due, not only against the Principal Borrower but also against the Corporate Guarantor, which is the scheme of the Code. A guarantor’s liability depends on terms of his contract. There can be default by the Principal Borrower and the Guarantor on the same date or date of default for both may be different depending on the terms of contract of guarantee. It is well settled that the loan agreement with the Principal Borrower and the Bank as well as Deed of Guarantee between the Bank and the Guarantor are two different transactions and the Guarantor’s liability has to be read from the Deed of Guarantee.

• Westcoast Infraprojects Pvt. Ltd. Vs. Mr. Ram Chandra Dallaram Choudhary [ca (at) (ins) No. 1258 Of 2022]

  It was held that when the clauses of the Process Document clearly empowers the Liquidator to forfeit the EMD and any payment made in event default is committed by the Highest Bidder, no exception can be taken to the action of the Liquidator in cancelling the sale and forfeiting the amount deposited by the Appellant.

• Gvr Consulting Services Pvt. Ltd. Vs. Pooja Bahry [ca (at) (ins) No. 405 With 369 And 412 Of 2022]

  It was held that, clear statutory provision of Section 43 of the Code is that a corporate debtor shall be deemed to have given a preference if conditions as mentioned in paragraph ‘a’ and ‘b’ are fulfilled. When a provision provides for deeming fiction, it comes into play on fulfilment of the requirement even if in fact it may not be so.

• Sciknow Techno Solutions Ltd. Vs. Dinesh Kumar Gupta & Ors [i.a. No. 1110 Of 2023 In Ca (at) (ins) No. 332 Of 2023]

  It was held that, the observations made by this Tribunal stating that “no appeal under sub-section (1) of Section 61 can be entertained after forty-five days of knowledge of the order passed by the Adjudicating Authority” could not be interpreted in such a manner that limitation shall start only when the Appellant/Applicant has knowledge of the order

• Rajendra Pandurang Barde Vs. Amit Steels [ca (at) (ins) No. 1503 Of 2022 And I.a. No. 4915 Of 2022 & I.a. Nos. 122, 123, 124, 126, 127 Of 2023]

  It was held that, any settlement after passing of the impugned order and after constitution of the CoC is only permissible when the same is approved with 90% vote share of CoC.

• Sicom Ltd. Vs. Kitply Industries Ltd. [ca (at)(ins) No.849/2021]

  It has been held that neither Ld. NCLT nor Hon’ble NCLAT has jurisdiction to adjudicate in respect of interpretation of agreement/contract which had already occurred prior to initiation of CIRP

• Manmohan Gupta Vs. Mds Digital Media Pvt. Ltd. & Anr. [company Appeal (at) (insolvency) No.202 Of 2023]

  Hon’ble NCLAT held that the Ld. Adjudicating Authority has admitted the Section 9 application on the basis of admission made by the Corporate Debtor. Admittedly, when the admitted amount is more than the threshold, the Ld. Adjudicating Authority did not commit any error in admitting the Application under Section 9 of the Code. The question as to what is correct amount of debt was the question which was to be subsequently looked into at the time of collation of the claims by the Resolution Professional and at the stage of admission of section 9 application it was not necessary for the Adjudicating Authority to express any opinion. Thus the Appeal was dismissed.

• Bhushan Shringarpure Vs. Mr. B.k. Mishra Rp Of Lakeland Chemicals (india) Ltd. [company Appeal (at) (ins) No. 1504 Of 2022 & I.a. No. 645 Of 2023]

  Hon’ble NCLAT held that a bare reading of the Section 24(3) (c) shows that it is mandatory in nature and it is incumbent upon the Resolution Professional to serve notice to all the Operational Creditors of each meeting of the CoC. In case the authorized representative is elected after notice is received by the Operational creditors, then the notice of meeting has to further be served upon the authorized representatives.

• Asj Finsolutions Pvt. Ltd. Vs. Best Foods Ltd. Through Liquidator & Ors. [company Appeal (at) (insolvency) No. 492 Of 2023]

  Hon’ble NCLAT held that the factum of litigation whereby Writ Petition before Hon’ble High Court, filed by a third party and/ or suit by certain parties in regard to a property of the Corporate Debtor, is pending, cannot be considered as a ground by the Successful Bidder for not making payment of the balance amount.

  The balance amount was to be deposited within the time as required in Schedule-I of Liquidation Regulation, 2016.

• Ramdas Dutta Vs. Idbi Bank Ltd. [company Appeal (at) (ins) No. 1285 Of 2022]

  Hon’ble NCLAT held that the date of default cannot be changed. That the period of limitation would be attracted from the date when the default occurs and not from the date of declaration of Non-Performing Asset (NPA). Therefore, the date of NPA cannot be taken to be the date of default for the purpose of limitation.