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Can Insolvency/ CIRP proceedings under Section 7 of IBC be initiated against a Co-Borrower? – Amit Narang Suspended Director of Narang Developers Pvt. Ltd. Vs. Aditya Birla Finance Ltd. and Anr. – NCLAT New Delhi

/ 31 minutes of reading

Hon’ble NCLAT held that:

(i) The obligation of the Co-Borrower is co-extensive and coterminous with that of the Primary Borrower and hence a right or cause of action becomes available to the financial creditor to proceed against the primary borrower, as well as the Co-Borrower in equal measure in case they commit default in repayment of the amount of debt.
(ii) The liability of a Corporate Debtor cannot be done away merely on the ground of stamping inadequacy in the Facility Agreement.
(iii) Declaration of account as NPA under the SARFAESI Act is an independent proceeding and cannot be adopted as a defence to obstruct the Financial Creditor from proceeding under IBC to initiate CIRP against the Corporate Debtor.

Can Insolvency/ CIRP proceedings under Section 7 of IBC be initiated against a Co-Borrower? – Amit Narang Suspended Director of Narang Developers Pvt. Ltd. Vs. Aditya Birla Finance Ltd. and Anr. – NCLAT New Delhi Read Post »

The principal of quasi partnership can be invoked in family companies and also applicable to public listed companies – Mr. Virendra R. Gandhi and Ors. Vs. Vadilal International Pvt. Ltd. and Ors. – NCLT Ahmedabad Bench

/ 14 minutes of reading

This judgment covers:

A. Family Dispute Settlement, B. Quasi Partnership, C. Oppression and mismanagement, D. Legitimate Expectations and E. Tribunal’s powers to order division of assets in an oppression and mismanagement petition.

The principal of quasi partnership can be invoked in family companies and also applicable to public listed companies – Mr. Virendra R. Gandhi and Ors. Vs. Vadilal International Pvt. Ltd. and Ors. – NCLT Ahmedabad Bench Read Post »

Even in a case where the Adjudicating Authority has not approved the plan would not imply that the plan can go back and forth making the CIRP an endless process – IDBI Bank Ltd. Vs. Jalesh Kumar Grover RP of GPI Textiles Ltd. – NCLAT New Delhi

/ 8 minutes of reading

Hon’ble NCLAT referred recent judgment in M/s. RPS Infrastructure Ltd. Vs. Mukul Kumar & Anr and held that once the Hon’ble Supreme Court has held that even in a case where the Adjudicating Authority has not approved the plan would not imply that the plan can go back and forth making the CIRP an endless process because in that matter it would result in the reopening of the whole issue, particularly as there may be other similar persons who may jump onto the bandwagon.

Even in a case where the Adjudicating Authority has not approved the plan would not imply that the plan can go back and forth making the CIRP an endless process – IDBI Bank Ltd. Vs. Jalesh Kumar Grover RP of GPI Textiles Ltd. – NCLAT New Delhi Read Post »

Once an order of the Adjudicating Authority attains finality on account of affirmation by the Hon’ble Apex Court in appeal, the same cannot be reopened – Raghavendra G. Kundangar Vs. Shashi Agarwal – NCLAT New Delhi

/ 21 minutes of reading

The Appellants sought recall of the judgment on the ground of change of law. But it will never be a ground to recall the order passed by the Adjudicating Authority and in case the Adjudicating Authority exercises such power to recall the order passed on subsequent judgment overruling the earlier judgment it would not only amount to setting aside the judgment in appeal but also setting aside a judgment in an appeal passed by the Appellate Tribunal and Hon’ble Supreme Court, which is impermissible in law.
Once the order of the Adjudicating Authority attains finality on account of affirmation by the Hon’ble Apex Court in appeal, the same cannot be reopened. But the simple reason that the Appellants did not raise such issue and consequently, it is hit by the doctrine of constructive resjudicata, though the principle of resjudicata is a part of CPC, the doctrine is applicable to the proceedings in IBC. The Hon’ble Apex Court in the matter of “Ebix Singapore Pte Ltd. Vs. Committee of Creditors of Educomp (2021) ibclaw.in 153 SC” held in paragraph-62 of the judgment, the Hon’ble Apex Court dealt with the doctrine of resjudicata, concluded that the principle of resjudicata is applicable in IBC also. The law declared by Hon’ble Apex Court is consistent that on account of overruling earlier judgment, the Tribunal cannot recall order or judgment.

Once an order of the Adjudicating Authority attains finality on account of affirmation by the Hon’ble Apex Court in appeal, the same cannot be reopened – Raghavendra G. Kundangar Vs. Shashi Agarwal – NCLAT New Delhi Read Post »

NCLT directs class of Financial Creditors/Homebuyers to present on next hearing since they are not co-operating – Vemuri Ravi Kumar Vs. Bhrigu Infra Pvt. Ltd. – NCLT Hyderabad Bench

/ 2 minutes of reading

CoC comprises of 7 real estate allotees, and so far there are no operational creditors. The Adjudicating Authority held that appointing an authorised representative on behalf of majority of the Class of financial creditor would be an additional burden and results in increasing the CIRP costs. At the same time the interest of justice would be served by allowing all the 7 class of financial creditors to form part of the CoC. Therefore, in view of the peculiar facts and circumstances we direct the IRP to proceed with the representation of all the 7 financial creditors instead of they being represented by authorized representative.
Further, it held that since it is represented by Learned Counsel for IRP that class of financial creditors are not co-operating, let the Class of Financial Creditors be present on the next hearing.

NCLT directs class of Financial Creditors/Homebuyers to present on next hearing since they are not co-operating – Vemuri Ravi Kumar Vs. Bhrigu Infra Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

Criminal complaints filed against officials of consortium of banks, and further action thereon have no bearing or relevance to the proceedings under section 7 of the IBC – B. Prashanth Hegde Suspended Managing Director, Metal Closures Pvt. Ltd. Vs. State Bank of India – NCLAT New Delhi

/ 36 minutes of reading

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Criminal complaints filed against officials of consortium of banks, and further action thereon have no bearing or relevance to the proceedings under section 7 of the IBC – B. Prashanth Hegde Suspended Managing Director, Metal Closures Pvt. Ltd. Vs. State Bank of India – NCLAT New Delhi Read Post »

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