NCLAT Rules 2016

Is NCLAT precluded from scrutinizing the tenability and reasonability of the grounds on which re-filing delay condonation has been sought? | Period of 7 days prescribed in NCLAT Rule 26(2) with respect to removal of defects is directory in nature or mandatory? – CA Ramchandra Dallaram Choudhary, Liquidator of Anil Ltd. Vs. Adani Infrastructure & Developers Pvt. Ltd. – NCLAT New Delhi

The Hon’ble NCLAT held that no quarrel with the proposition canvassed by the Applicant that the period of seven days stipulated under NCLAT Rules for rectification of defects is directory and not mandatory. It is also in agreement with the finding in Mr. V R Ashok Rao v. TDT Copper Ltd. (2022) ibclaw.in 598 NCLAT judgment that on removal of defects notified by the Registry within a reasonable period, a liberal approach should be adopted to condone the delay. Be that as it may, it is equally important to note that the same judgment also observes that justifiable cause must be shown for the delay. More importantly, in adopting a liberal and flexible approach, the Tribunal cannot allow any compromise of the well settled precept of “timeliness” which constitutes one of the cardinal cornerstones of the statutory framework of IBC.

Is NCLAT precluded from scrutinizing the tenability and reasonability of the grounds on which re-filing delay condonation has been sought? | Period of 7 days prescribed in NCLAT Rule 26(2) with respect to removal of defects is directory in nature or mandatory? – CA Ramchandra Dallaram Choudhary, Liquidator of Anil Ltd. Vs. Adani Infrastructure & Developers Pvt. Ltd. – NCLAT New Delhi Read Post »

When last day of limitation falls on a public holiday, the said period shall be excluded from calculation of period u/s 61 of IBC – Kotak Mahindra Bank Ltd. Vs. Mohit Kumar – NCLAT New Delhi

The Hon’ble NCLAT held that the law as provided in the Limitation Act as well as Rule 3 of the NCLAT Rules, 2016 is that when last day of limitation falls on a public holiday, the said period shall be excluded. Thus, when last days of limitation i.e. 30th day is falling on public holiday, benefit of said public holiday can be extended to the applicant. The submission of the Appellant that all Saturdays and Sundays which are falling within 45 days should be excluded is clearly an absurd argument and not as per the benefit available in Limitation Act as well as Rule 3 of the NCLAT Rules, 2016.

When last day of limitation falls on a public holiday, the said period shall be excluded from calculation of period u/s 61 of IBC – Kotak Mahindra Bank Ltd. Vs. Mohit Kumar – NCLAT New Delhi Read Post »

Supreme Court sets Guidelines for Withdrawal and Settlement of Insolvency Cases under Section 12A of IBC read with CIRP Regulation 30A | Withdrawal application shall be moved through Resolution Professional only and NCLT Rule 11 or NCLAT Rule 11 or even the power under Article 142 no longer arises – GLAS Trust Company LLC Vs. BYJU Raveendran and Ors. – Supreme Court

In this landmark decision, Hon’ble Supreme Court covers following issues:

i. Nature of the proceedings after admission of the application: proceeding in personam or in rem.
ii. Legal framework for withdrawal and settlement of claims.
iii. Four stages of withdrawal of Insolvency cases: A procedure prescribed under the existing framework.
iv. Comprehensive framework to deal with withdrawal and settlement: Rule 11 of the NCLT Rules, or Rule 11 of the NCLAT Rules or even the power under Article 142 no longer arises.
v. Withdrawal application u/s 12A through IRP only, NCLT conducts an adjudicatory exercise and the procedure is not a mere technicality.
vi. Inherent Powers under Rule 11 of NCLT/ NCLAT Rules, 2016.
vii. Meaning of the phrase “any person aggrieved” under Section 61 and Section 62 of IBC.

Supreme Court sets Guidelines for Withdrawal and Settlement of Insolvency Cases under Section 12A of IBC read with CIRP Regulation 30A | Withdrawal application shall be moved through Resolution Professional only and NCLT Rule 11 or NCLAT Rule 11 or even the power under Article 142 no longer arises – GLAS Trust Company LLC Vs. BYJU Raveendran and Ors. – Supreme Court Read Post »

Distinction between Review Petition and Recall Petition | The NCLT & NCLAT have inherent powers to recall order but have no power to review its order – Aircastle (Ireland) Ltd. Vs. Mr. Ashish Chawchharia, RP of Jet Airways (India) Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT summarises points on review and recall petition.

(i) Resolution Professional should not be treated as functus officio.
(ii) The power to recall a judgment will not be exercised when the ground for reopening the proceedings or vacating the judgment was available to be pleaded in the original action but was not done or where a proper remedy in some other proceeding such as by way of appeal or revision was available but was not availed. The right to seek vacation of a judgment may be lost by waiver, estoppel or acquiescence.
(iii) However, the Rule cannot be invoked to revisit the findings and it is not open to re-examine the findings. The mistake/error must be apparent on the face of the record and must have occurred due to oversight, inadvertence or human error.
(iv) Once the issue has been corrected by NCLT through suitable corrections, the NCLT has recorded consequential correction in the Order. This is not in nature of review of its order but rather recall.

Distinction between Review Petition and Recall Petition | The NCLT & NCLAT have inherent powers to recall order but have no power to review its order – Aircastle (Ireland) Ltd. Vs. Mr. Ashish Chawchharia, RP of Jet Airways (India) Ltd. and Ors. – NCLAT New Delhi Read Post »

The definition of ‘Party’ under NCLT Rule 2(16) includes the words person preferring an appeal and it does not classify or subclassify the party to the proceedings | Word ‘Person Aggrieved’ used in Sec. 61 of IBC is wide enough to include within it, a party to the proceedings, as well as any other person other than the party to the proceedings – Southern Power Distribution Company of Telangana Ltd. Vs. Kalvakolanu Murali Krishna Prasad RP for Vaksh Steels Pvt. Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) The definition of the word “party’’ under the NCLT Rules, 2016 is quite wide and it does not stipulate that a person for the purposes of being treated as to be a party, has to be actually the party to the proceedings. Rather, the term party as defined under Rule 2(16) of the NCLT Rules of 2016, is wide enough to include within itself a person who prefers an Appeal.
(ii) The definition of “Party’’, includes the word “person preferring an appeal’’, it does not classify or subclassify the party to the proceedings.
(iii) A person who is preferring an Appeal under Section 61, cannot seek an exclusion from the period of limitation to prefer an Appeal, on grounds of being a person aggrieved if, he has not been diligent enough to apply for the Certified Copy within the time period of limitation under Section 61.
(iv) The date of knowledge of the proceedings, cannot be taken as to be a foundation for fixing the date of commencement of the period of limitation for preferring an Appeal.

The definition of ‘Party’ under NCLT Rule 2(16) includes the words person preferring an appeal and it does not classify or subclassify the party to the proceedings | Word ‘Person Aggrieved’ used in Sec. 61 of IBC is wide enough to include within it, a party to the proceedings, as well as any other person other than the party to the proceedings – Southern Power Distribution Company of Telangana Ltd. Vs. Kalvakolanu Murali Krishna Prasad RP for Vaksh Steels Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Whether both the certified copy which is made available free of cost and the certified copy which is made available on the payment of costs, are treated as certified copies for the purpose of NCLT Rule 50? – State Bank of India Vs. India Power Corporation Ltd. – Supreme Court

Hon’ble Supreme Court held that:
(i) The important point to note is that both the certified copy which is provided free of cost as well as the certified copy which is made on an application in that behalf are treated as certified copies for the purposes of Rule 50.
(ii) Both the certified copy which is made available free of cost as well as the certified copy which is made available on the payment of costs, are treated as certified copies for the purpose of Rule 50.
(iii) A litigant who does not apply for a certified copy cannot then fall back and claim that he was awaiting the grant of a free copy to obviate the bar of limitation.
(iv) The provisions of Rule 50 of the NCLT Rules place both the free certified copy as well as the certified copy which is applied for on payment of fees on the same footing.

Whether both the certified copy which is made available free of cost and the certified copy which is made available on the payment of costs, are treated as certified copies for the purpose of NCLT Rule 50? – State Bank of India Vs. India Power Corporation Ltd. – Supreme Court Read Post »

Whether issue of limitation can be a subject matter of a recall of a judgment passed by NCLAT? – Arunkumar Jayantilal Muchhala Vs. Awaita Properties Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that there is no express provision in the IBC or the Regulations/Rules framed thereunder conferring on this Tribunal the jurisdiction to recall its order on the issue of limitation. Strictly speaking, the issue of limitation cannot be a subject matter of a recall application.

Whether issue of limitation can be a subject matter of a recall of a judgment passed by NCLAT? – Arunkumar Jayantilal Muchhala Vs. Awaita Properties Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Scroll to Top