IBC Weekly Round-Up [10th February -16th February 2025]

Mohd Malik Chauhan

17 Feb 2025 8:00 PM IST

Deposit Of Security Under Memorandum Of Understanding Without Intention Of Commercial Effect Of Borrowing Cannot Be Categorised As Financial Debt: NCLAT

Case Title: Global Indian School Education Services Pvt. Ltd. Versus Mr. Abhay Narayan Manudhane

Case Number: Comp. App. (AT) (Ins) No. 1617 of 2023 & I.A. No. 5841, 5842, 5843 of 2023

The National Company Law Appellate Tribunal (“NCLAT”) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member), Mr. Naresh Salecha (Technical Member) and Mr. Indevar Pandey (Technical Member) has held that the security amount deposited under a Memorandum of Understanding ('MoU') without any intention of commercial effect of borrowing and time value of money cannot be categorised as financial debt under section 5(8) of the Insolvency and Bankruptcy Code, 2016 (“Code”).

Once Resolution Plan Is Approved By CoC & Submitted To Adjudicating Authority For Approval, No Other Plan Can Be Considered By CoC: NCLAT

Case Title: Parmesh Construction Company Ltd. Versus Pramod Kumar Sharma

Case Number: Company Appeal (AT) (Insolvency) No. 149 of 2025

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that the Resolution Plan even prior to the approval of the Adjudicating Authority is binding inter se the Committee of Creditors (CoC) and the SRA.

It also held that the CoC is clearly not entitled to consider any other request for consideration of any Resolution Plan after it has approved the Resolution Plan, which is pending consideration for approval before the Adjudicating Authority.

Application U/S 7 Of IBC Must Be Decided First When Application U/S 54C Is Filed 14 Days After S.7 Application: NCLAT

Case Title: Bank of Baroda Versus Shree Rajashthan Syntex Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 888 of 2023, Comp. App. (AT) ('Insolvency') No. 1492 of 2023 & I.A. No. 5310 of 2023 and Company Appeal (AT) (Insolvency) No.890 of 2023

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that when an application under section 54C of the IBC is filed after 14 days from the date of the application filed under section 7 of the IBC, the application under section 7 must be decided first as per section 11A(3) of the code.

Constitution Of Project Management Committee Under Settlement Agreement Does Not Absolve Corporate Debtor From Repayment Obligations: NCLAT

Case Title: Sandeep Jain Versus IDBI Trusteeship Services Ltd. & Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 146 of 2025

The NCLAT New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that any dispute even pending in the arbitration does not in any manner prohibit the financial creditor to take remedy under Section 7 of the code.

It also held that the constitution of a Project Management Committee comprising members of financial creditors and corporate debtor in pursuance of a Settlement Agreement does not absolve the CD from its repayment obligations.

NCLAT Orders NCLT To Decide BCCI's Plea For Settlement And Withdrawal Of CIRP Against Byju's Within One Week

Case Title: Riju Raveendran v. Pankaj Srivastava

The National Company Law Appellate Tribunal (NCLAT), Chennai bench comprising Justice (retd) Rakesh Kumar Jain (Judicial Member) and Jatindranath Swain (Technical Member) have directed the National Company Law Tribunal (NCLT) to decide the application filed by Board of Control for Cricket in India (BCCI) to withdraw the corporate insolvency resolution process (CIRP) against Byju's within a week's time.

NCLT

Bankrupt Individual Cannot Seek Discharge U/S 138(1) Of IBC: NCLT New Delhi

Case Title: Mr. Anil Syal vs. Mr. Ajay Gupta & Anr.

Case Number: IA-3964/2024 In IB-589(PB)/2020

The National Company Law Tribunal (NCLT), New Delhi bench comprising Bachu Venkat Balaram Das (Judicial Member) and Atul Chaturvedi (Technical Member) has held that under Section 138(1) of the Insolvency and Bankruptcy Code, 2016 (IBC), only the Bankruptcy Trustee has the authority to apply for the discharge of a bankrupt individual before the Adjudicating Authority. The Tribunal held that the non-filing of such an application by the Bankruptcy Trustee does not grant the Bankrupt the locus standi to file it himself.

Business Arrangement Involving Joint Profit-Sharing, Exclusive Supply Agreement Does Not Establish Creditor-Debtor Relationship Under IBC: NCLT

Case Title: M/S Transline Technologies Limited v. Experio Tech Private Limited

Case no: CP IB NO. 236/(ND)/2023

The National Company Law Tribunal (NCLT), Delhi, has held that a petitioner cannot initiate the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (IBC) if the business arrangement between the parties involves joint participation and profit-sharing rather than a straightforward operational debt. The Tribunal ruled that such an arrangement does not establish a debtor-creditor relationship under the IBC