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When no CIRP or liquidation proceedings of a Corporate Debtor is pending before the NCLT, whether an application for personal insolvency against a Personal Guarantor has to be filed before the NCLT? – Anita Goyal Vs. Vistra ITCL (India) Ltd. and Anr. – NCLAT New Delhi

The Hon’ble NCLAT referred the following judgments:

a. State Bank of India vs. Mahendra Kumar Jajodia, (2022) ibclaw.in 89 NCLAT
b. Mahendra Kumar Agarwal v. PTC India Financial Services Ltd. and Anr., (2023) ibclaw.in 488 NCLAT
c. Lalit Kumar Jain vs. Union of India & Ors. (2021) ibclaw.in 61 SC
d. Rohit Nath @ Rohit Rabindra Nath v. KEB Hana Bank Ltd. (2023) ibclaw.in 1207
e. Rohit Nath @ Rohit Rabindra Nath Vs. KEB Hana Bank Ltd. (2021) ibclaw.in 79 HC
f. State Bank of India v. V. Ramakrishnan and Anr., (2018) ibclaw.in 29 SC
g. Axis Trustee Services Ltd. vs. Brij Bhushan Singal (2022) ibclaw.in 239 HC
h. Aditya Birla Finance Ltd. v. Sarita Mishra (2024) ibclaw.in 1185 NCLT
i. Tata Capital Financial Services Ltd. vs. Arjun Agarwal, (2024) ibclaw.in 1223 NCLT

And decided the issue when no CIRP or liquidation proceedings of a Corporate Debtor is pending before the NCLT, whether an Application for personal insolvency against a Personal Guarantor has to be filed before the NCLT.

The Hon’ble Tribunal also held that judgments in Aditya Birla Finance Ltd. v. Sarita Mishra (2024) ibclaw.in 1185 NCLT and Tata Capital Financial Services Ltd. vs. Arjun Agarwal, (2024) ibclaw.in 1223 NCLT do not lay down correct law and are per incuriam.

When no CIRP or liquidation proceedings of a Corporate Debtor is pending before the NCLT, whether an application for personal insolvency against a Personal Guarantor has to be filed before the NCLT? – Anita Goyal Vs. Vistra ITCL (India) Ltd. and Anr. – NCLAT New Delhi Read Post »

Section 60(2) of IBC contemplate filing of Insolvency application for Personal Guarantor before NCLT or its Benches and not to a particular Court Room of NCLT where CIRP against Corporate Debtor is pending – Bhavesh Harkishandas Mehta Vs. Kookmin Bank and Anr. – NCLAT New Delhi

In this important judgment, two issues before NCLAT for consideration:

(i) Whether when an insolvency proceeding is pending in different Court Room of a particular Bench of NCLT, if the proceedings under Section 95 of IBC have been entertained by another Court of the same Bench, the order passed under Section 95 application by the court different from Court where insolvency proceeding is pending, is without jurisdiction?
(ii) Whether Section 60(2) of IBC contemplate application for personal guarantor before NCLT or its Benches or it contemplates filing of Section 95 application in the same court room of the NCLT?

Section 60(2) of IBC contemplate filing of Insolvency application for Personal Guarantor before NCLT or its Benches and not to a particular Court Room of NCLT where CIRP against Corporate Debtor is pending – Bhavesh Harkishandas Mehta Vs. Kookmin Bank and Anr. – NCLAT New Delhi Read Post »

The Tribunal (NCLT) and the Appellate Tribunal (NCLAT) have the same jurisdiction, powers and Authority in respect of contempt of it as the High Court – Shailendra Singh Vs. Nisha Malpani, RP of NIIL Infrastructure Pvt. Ltd. – NCLAT New Delhi

NCLAT held that just because the I&B Code does not specifically mention about the contempt provisions, it cannot be said that the Adjudicating Authority (NCLT) has no powers of contempt. If one is to give such a restricted interpretation that the Adjudicating Authority (NCLT) has no jurisdiction of contempt, then it orders cannot be implemented and in fact, the I&B Code will remain in Black Letters without a teeth to bite, in the considered opinion of this Tribunal.

The Tribunal (NCLT) and the Appellate Tribunal (NCLAT) have the same jurisdiction, powers and Authority in respect of contempt of it as the High Court – Shailendra Singh Vs. Nisha Malpani, RP of NIIL Infrastructure Pvt. Ltd. – NCLAT New Delhi Read Post »

The Adjudicating Authority (Tribunal) in Law is not empowered to order an investigation directly – Vijay Pal Garg & Ors. Vs. Pooja Bahry (Liquidator in the matter of Gee Ispat Pvt. Ltd. – NCLAT

NCLAT has held that this Tribunal on a careful consideration of respective contentions and also keeping in mind a prime fact that the Tribunal/Adjudicating Authority is guided by the Principles of Natural justice and is to follow the procedure prescribed u/s 213(b) of the Companies Act comes to an ‘irresistible’ and inescapable conclusion that the Adjudicating Authority (Tribunal) in Law is not empowered to order an investigation directly, to be carried out by the Central Government. An Adjudicating Authority (Tribunal) as a competent / Appropriate authority in terms of Section 213 of the Companies Act has an option to issue notice in regard to the charges/allegations levelled against the promoters and others (including the Appellants) of course after following the due procedure enshrined u/s 213 of the Companies Act, 2013. In case an exfacie/prima facie case is made out, then, the Tribunal is empowered to refer the matter to the Central Government for an investigation by the Inspectors and upon such investigation, if any action is required to be taken and if the Central Government subjectively opines that the subject matter in issue needs an investigation, through the Serious Fraud Investigation Office, it may proceed in accordance with Law.

The Adjudicating Authority (Tribunal) in Law is not empowered to order an investigation directly – Vijay Pal Garg & Ors. Vs. Pooja Bahry (Liquidator in the matter of Gee Ispat Pvt. Ltd. – NCLAT Read Post »

The Limitation Act, 1963 is applicable to applications filed under Sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016 (Code) from the inception of the Code and Article 137 of the Limitation Act gets attracted – B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta and Associates – Supreme Court

This judgment covers:
A. The reason for the introduction of Section 238A into the Code.
B. The Limitation Act will apply on transfer of proceedings under Section 434 of the Companies Act, 2013.
C. Does NCLT decide applications made to it under IBC in the same manner as it exercises its other jurisdiction under the Companies Act?
D. Debt, Due, Default and Financial and Operational Debt.
E. Section 238A which was inserted w.e.f. 06.06.2018, is retrospective or prospective?
F. Conclusion.

The Limitation Act, 1963 is applicable to applications filed under Sections 7 and 9 of the Insolvency and Bankruptcy Code, 2016 (Code) from the inception of the Code and Article 137 of the Limitation Act gets attracted – B.K. Educational Services Pvt. Ltd. Vs. Parag Gupta and Associates – Supreme Court Read Post »

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