2025 Archives

Whether an MSME can make a reference to the Facilitation Council for dispute resolution under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 if it is not registered under Section 8 of the MSMED Act before the execution of the contract with the buyer? – NBCC (India) Ltd. Vs. The State of West Bengal and Ors. – Supreme Court

January 14, 2025 / 70 minutes of reading

The Hon’ble Supreme Court rejected the submission that ‘any party to a dispute’ is confined to a ‘supplier’ who has filed a memorandum under Section 8 of the MSMED Act, 2006. The Hon’ble Court has also explained that the issue(s) that have arisen in the decisions of this Court in Silpi Industries v. Kerala State Road Transport Corporation and Gujarat State Civil Supplies Corporation Ltd. v. Mahakali Foods Pvt. Ltd. were very different from the issue that has arisen for our consideration. However, for clarity and legal certainty, the Court has directed the appeal be placed before the Hon’ble Chief Justice of India for referring the matter to a bench of three Judges for an authoritative pronouncement.

Whether an MSME can make a reference to the Facilitation Council for dispute resolution under Section 18 of the Micro, Small and Medium Enterprises Development Act, 2006 if it is not registered under Section 8 of the MSMED Act before the execution of the contract with the buyer? – NBCC (India) Ltd. Vs. The State of West Bengal and Ors. – Supreme Court Read Post »

Adjudicating Authority does not have any jurisdictional power to consider the issue concerning the determination of the terms and validity of the Leave and License Agreement | Under no circumstances the Resolution Professional can short circuit the procedure and seek approval of a resolution plan that leads to cancellation of the leave and license, on the ground that it has been approved by the CoC – Victory Iron Works Ltd. Vs. Jitendra Lohia, RP of Avani Towers Pvt. Ltd. – NCLT Kolkata Bench

January 14, 2025 / 2 minutes of reading

It is a trite, axiomatic and settled law that this Adjudicating Authority is not a civil court to resolve a civil dispute, thus, extinguishment of the right on leave and license cannot be gone into by this forum. This Adjudicating Authority does not have any jurisdictional power to consider the issue concerning the determination of the terms and validity of the Leave and License Agreement. However, the Section 25 of the I&B Code casts a duty upon the RP to represent and act on behalf of the corporate debtor with third parties, exercise rights for the benefit of the corporate debtor in judicial, quasi-judicial and arbitration proceedings, which includes its right to get the leave and license legally terminated by a due process of law so that a clear title passes on to the Successful Resolution Applicant. But under no circumstances the Resolution Professional can short circuit the procedure and seek approval of a resolution plan that leads to cancellation of the leave and license, on the ground that it has been approved by the CoC.

Adjudicating Authority does not have any jurisdictional power to consider the issue concerning the determination of the terms and validity of the Leave and License Agreement | Under no circumstances the Resolution Professional can short circuit the procedure and seek approval of a resolution plan that leads to cancellation of the leave and license, on the ground that it has been approved by the CoC – Victory Iron Works Ltd. Vs. Jitendra Lohia, RP of Avani Towers Pvt. Ltd. – NCLT Kolkata Bench Read Post »

The breakup of the interest in accordance with the fluctuating rate of interest not being shown is no reason to hold that the demand notice u/s 13(2) of the SARFAESI Act, 2002, is faulty – Krishna Electrovision Pvt. Ltd. and Ors. Vs. The Authorized Officer, South Indian Bank – DRAT Mumbai

January 14, 2025 / 1 minute of reading

The breakup of the interest in accordance with the fluctuating rate of interest not being shown is no reason to hold that the demand notice u/s 13(2) of the SARFAESI Act, 2002, is faulty – Krishna Electrovision Pvt. Ltd. and Ors. Vs. The Authorized Officer, South Indian Bank – DRAT Mumbai Read Post »

Supreme Court permits to file a writ petition before the High Court to challenge the MSME registration certificate obtained after initiation of CIRP – Central Bank of India Vs. Ramesh Shah in Consortium with Masitia Capital Services Pvt. Ltd. and Ors. – Supreme Court

January 14, 2025 / 3 minutes of reading

During the pendency of CIRP, the Resolution Professional instructed an employee of the Corporate Debtor to make an application for registration of the Corporate Debtor as a MSME under the Micro, Small and Medium Enterprises Development Act, 2006 and certificate dated 23.10.2020 was issued.
The Hon’ble Supreme Court held that we are hearing an appeal in terms of Section 62 of the IBC and within its limited confines, we cannot go into the question of the validity of the registration certificate dated 23.10.2020. At the same time, the certificate having been placed on record, Section 29A read with Section 240A of the IBC would come into play and would affect the interests of the secured creditors, including the appellant, Central Bank of India.
The Hon’ble Court would permit the appellant, Central Bank of India, to file a writ petition before the jurisdictional High Court challenging the issuance of the MSME Registration Certificate dated 23.10.2020.

Supreme Court permits to file a writ petition before the High Court to challenge the MSME registration certificate obtained after initiation of CIRP – Central Bank of India Vs. Ramesh Shah in Consortium with Masitia Capital Services Pvt. Ltd. and Ors. – Supreme Court Read Post »

Common directors’ disqualification under Section 29A(e) of the IBC – Fortune Chemicals Ltd. Vs. Ashok Kumar Jaiswal, RP of Aarya Industrial Products Pvt. Ltd. and Anr. – NCLAT New Delhi

January 14, 2025 / 20 minutes of reading

The Hon’ble NCLAT upheld the decision of NCLT Kolkata Bench. One of the directors of the Appellant, who was the Prospective Resolution Applicant, was also director of GADPPL which had failed to file its accounts since inception (i.e. 28.02.2014). The said Director was ineligible to be a director as per provisions of Section 164(2) of the Companies Act, 2013 and the Appellant company also accordingly was not eligible to be a resolution applicant in terms of provisions of clause (e) of Section 29A of IBC, 2016.

Common directors’ disqualification under Section 29A(e) of the IBC – Fortune Chemicals Ltd. Vs. Ashok Kumar Jaiswal, RP of Aarya Industrial Products Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Delayed claim post approval of the Resolution Plan by the CoC cannot be accepted – Commercial Taxes Department, Government of Rajasthan Vs. Mamta Binani – NCLT Kolkata Bench

January 14, 2025 / 3 minutes of reading

The Hon’ble NCLT Kolkata Bench held that as per Regulation 12 of IBBI (CIRP Regulations, 2016), a creditor shall submit claim with proof on or before the last date mentioned of the public announcement, failing which, he/she can submit the claim up to the date of issue of request for resolution plans under Regulation 36B or 90 days from the insolvency commencement date whichever is later. The Hon’ble Tribunal has consistently held that such delayed claim post approval of the resolution plan by the CoC cannot be accepted.

Delayed claim post approval of the Resolution Plan by the CoC cannot be accepted – Commercial Taxes Department, Government of Rajasthan Vs. Mamta Binani – NCLT Kolkata Bench Read Post »

Can the benefit of the condonable period, which expired during the Court’s vacation, be granted when the petition is filed immediately after the reopening of the Court, in exercise of the power under Section 4 of the Limitation Act, 1963? – My Preferred Transformation & Hospitality Pvt. Ltd. and Anr. Vs. Faridabad Implements Pvt. Ltd. – Supreme Court

January 14, 2025 / 61 minutes of reading

The Hon’ble Supreme Court has held that in light of the current position of law, the Section 34 application preferred by the appellant is barred by limitation based on the following conclusions:
(i) There is no wholesale exclusion of Sections 4 to 24 of the Limitation Act when calculating the limitation period under Section 34(3) of the ACA.
(ii) Section 4 of the Limitation Act applies to Section 34(3) of the ACA only to the extent when the 3-month period expires on a court holiday. It does not aid the applicant when the 30-day condonable period expires on a court holiday.
(iii) In view of the applicability of Section 4 of the Limitation Act to Section 34 proceedings, Section 10 of the GCA does not apply and will not benefit the applicant when the 30- day condonable period expires on a court holiday.

Can the benefit of the condonable period, which expired during the Court’s vacation, be granted when the petition is filed immediately after the reopening of the Court, in exercise of the power under Section 4 of the Limitation Act, 1963? – My Preferred Transformation & Hospitality Pvt. Ltd. and Anr. Vs. Faridabad Implements Pvt. Ltd. – Supreme Court Read Post »

If a bank account of the Corporate Debtor was under the garnishee orders from the dates prior to initiation of CIRP, it does not form part of the liquidation estate – CS Dr Ahalada Rao Vummenthala, Liquidator of Kadevi Industries Ltd. Vs. Axis Bank – NCLT Hyderabad Bench

January 14, 2025 / 2 minutes of reading

The Hon’ble NCLT, Hyderabad Bench observed that in the present instance, the account having a balance of Rs. 18,61,866 was under the garnishee orders of much larger amounts from the different Tax Authorities from the dates prior to initiation of CIRP against the Corporate Debtor. This amount was unavailable to the Corporate Debtor prior to the commencement of the CIRP, and as such, it does not form part of the liquidation estate.

If a bank account of the Corporate Debtor was under the garnishee orders from the dates prior to initiation of CIRP, it does not form part of the liquidation estate – CS Dr Ahalada Rao Vummenthala, Liquidator of Kadevi Industries Ltd. Vs. Axis Bank – NCLT Hyderabad Bench Read Post »

Since no repayment plan has been received from the Personal Guarantor, the NCLT invokes the provision under Section 115(2) of IBC to allow the application for bankruptcy to be filed – State Bank of India Vs. Savita Lohariwal – NCLT Kolkata Bench

January 14, 2025 / 1 minute of reading

Since no repayment plan has been received from the Personal Guarantor, the NCLT invokes the provision under Section 115(2) of IBC to allow the application for bankruptcy to be filed – State Bank of India Vs. Savita Lohariwal – NCLT Kolkata Bench Read Post »

Can the NCLT, under Section 60(5) of the IBC, pass an order for the eviction of tenancy rights in a property of the Corporate Debtor? | Can insolvency laws override statutory tenancy protections? | Whether tenancy disputes fall outside the scope of insolvency resolution? – Sumati Suresh Hegde and Ors. Vs. Anand Sonbhadra, RP of Champalalji Finance Pvt. Ltd. and Ors. – NCLAT New Delhi

January 13, 2025 / 29 minutes of reading

The Hon’ble NCLAT held that:

(i) IRP did not pursue the suit for eviction which was a right procedure, rather filed an application under Section 60(5) r/w Section 25(2)(a) of the Code before the Tribunal by short circuiting the route of eviction of the present appellants under the garb of the provisions of the Code.
(ii) The Tribunal has committed a patent error in passing the order of eviction considering the possession of the Appellants as of the lessee.
(iii) There is a sharp difference between the lease and a tenancy.
(iv) In the present case, there has been no change of the tenancy rights of the Appellants by way of a contract and the law which is to operate in respect of termination of tenancy are the provisions of the Maharashtra Rent Control Act, 1999 and not the Code.
(v) It is also otherwise well settled that once a tenant always a tenant unless the status changes by contract or by operation of law.
(vi) The Application under Section 60(5) of the IBC is only maintainable if the issue involved is related to insolvency resolution process.

Can the NCLT, under Section 60(5) of the IBC, pass an order for the eviction of tenancy rights in a property of the Corporate Debtor? | Can insolvency laws override statutory tenancy protections? | Whether tenancy disputes fall outside the scope of insolvency resolution? – Sumati Suresh Hegde and Ors. Vs. Anand Sonbhadra, RP of Champalalji Finance Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »