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IBC Weekly Round Up [24th February...

IBC Weekly Round Up [24th February - 2nd March 2025]

Mohd Malik Chauhan

6 March 2025 7:40 PM IST

Banks Can Initiate Proceedings Under SARFAESI Act To Recover Loan If It Wasn't Party To Resolution Plan: Kerala High Court

Case Title: ASHOK HARRY POTHEN Vs. THE AUTHORISED OFFICER, M/S. INDIAN BANK

Case Number: W.P (C) No.4147/2025

The Kerala High Court bench of Justice Gopinath P. has held that a bank can initiate proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) to recover outstanding dues if it was not a party to the resolution plan approved under the Insolvency and Bankruptcy Code, 2016. The Court clarified that the bar against claims outside a resolution plan does not extend to third parties merely associated with the corporate debtor through agreements such as joint ventures.

Gratuity Dues Of Workers Do Not Form Part Of 'Liquidation Estate' Of Corporate Debtor, Must Be Paid In Full: Calcutta High Court

Case Title: M/s. Stesalit Limited Vs Union of India & Ors.

Case Number: WPA 532 of 2025

The Calcutta High Court bench of Justice Shampa Dutt (Paul) has held that gratuity dues are statutorily protected under the Payment of Gratuity Act, 1972, and do not form part of the liquidation estate of the Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 (IBC). The court held that gratuity payments are outside the waterfall mechanism under Section 53 of the IBC and must be paid in full, irrespective of the resolution plan. It further observed that Section 14 of the Payment of Gratuity Act has an overriding effect, ensuring that employees' statutory rights are upheld even in insolvency proceedings.

NCLAT

Serving Demand Notice To Personal Guarantor Under Rule 7 Of Personal Guarantors Rules Cannot Be Considered Invocation Of Guarantee: NCLAT

Case Title: State Bank of India Versus Mr. Deepak Kumar Singhania

Case Number: Company Appeal (AT) (Insolvency) No.191 of 2025

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that a Notice served to the personal guarantor under Rule 7 of Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 (“2019 Rules”) cannot be considered 'Invocation of Guarantee', therefore unless a guarantee has been invoked as per the terms of the 'Deed of Guarantee', an application under section 95 of the Insolvency and Bankruptcy Code, 2016 (Code) against the personal guarantor cannot be entertained.

Order Approving Resolution Plan Passed Beyond 330 Days Cannot Be Questioned When Application Seeking Approval Was Filed Within CIRP Period: NCLAT

Case Title: DKY Finance Pvt. Ltd. and Ors. Versus Mr. Sanjay Garg and Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 1367 of 2024 & I.A. No. 4973 of 2024

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that when an order approving the Resolution Plan is passed by the Adjudicating Authority after expiry of 330 days but the application seeking approval was filed within the stipulated time period, it cannot be said the plan was approved after the Corporate Insolvency Resolution Process (CIRP) period.

Interest Free Maintenance Fee Deposited By Allottees Under Conveyance Deed Cannot Be Considered As Financial Debt U/S 5(8) Of IBC: NCLAT

Case Title: ILD Owners Welfare Association Versus M/s. ALM Infotech City Pvt. Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 2198 of 2024 & I.A. No. 8172 of 2024

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that interest free maintenance fee to be paid by the allottees to the corporate debtor under the Conveyance Deed cannot be considered as financial debt under section 5(8) of the Insolvency and Bankruptcy Code, 2016 (Code).

NCLT Has No Jurisdiction To Convict Person For Offence U/S 68 Of IBC In View Of Section 236 Of IBC: NCLAT

Case Title: Ajay Vij and Anr. Vs Mr Abhishek Dutta and Anr.

Case Number: COMPANY APPEAL (AT)(INS) NO. 726 & 728 OF 2021 and COMPANY APPEAL (AT)(INS) NO. 818-819 OF 2021

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna and Mr. Ajai Das Mehrotra (Technical Member) has held that the National Company Law Tribunal (NCLT) has no jurisdiction to convict a person for an offence under Section 68 under Chapter VII of Part II of the Insolvency and Bankruptcy Code, 2016 (Code) in view of the express provision contained in Section 236(1) of the Code.

When Debt Is Not Unequivocally Admitted By Corporate Debtor, Application U/S 9 Of IBC Must Not Be Entertained: NCLAT

Case Title: NAVIN MADHAVJI MEHTA Versus JALDHI OVERSEAS PTE LTD AND ORS.

Case Number: Company Appeal (AT) (Ins) No. 792 of 2024

The National Company Law Appellate Tribunal (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 application under section 9 of the Insolvency and Bankruptcy Code, 2016 (Code) cannot be entertained when the debt is not unequivocally admitted by the Corporate Debtor.

Rejection Of Resolution Plan By Suspended Director Can't Be Interfered With If No Expression Of Interest Was Submitted Despite Participation In Meetings: NCLAT

Case Title: Sanjeev Agarwal & Anr. Versus Avishek Gupta & Ors.

Case Number: Company Appeal (AT) (Insolvency) No.228 of 2025

The National Company Law Appellate Tribunal (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 rejection of the Resolution Plan submitted by the Suspended Director of the Corporate Debtor by Committee of Creditors (CoC) cannot be interfered with when the concerned Director was present in all the meetings of the CoC and had still not submitted the plan in pursuance of Invitation to Expression of Interest (EoI).

Limitation Period For Filing Appeal U/S 61 Of IBC Commences From Date Of Order, Not From Date Of Its Receipt: NCLAT

Case Title: Assistant Commissioner (Central Goods & Services Tax & Central Excise, Division) Versus Meera Prasad

Case Number: Company Appeal (AT) (Ins) No. 1850 of 2024 and I.A. No. 6671, 6777 of 2024

The National Company Law Appellate Tribunal (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 limitation period for filing an appeal under section 61 of the Insolvency and Bankruptcy Code, 2016 (Code) shall commence from the date of passing of the order and not from the date when a copy of the order is received.

Adjudicating Authority Is Empowered To Decide Whether Successful Resolution Applicant Is Liable To Pay Pre-CIRP Electricity Dues U/S 60(5) Of IBC: NCLAT

Case Title: Punjab State Power Corporation Limited Versus Akums Lifesciences Limited

Case Number: Company Appeal (AT) (Insolvency) No. 1258 of 2023

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Yogesh Khanna (Judicial Member) and Mr. Ajai Das Mehrotra (Technical Member) has held that the National Company Law Tribunal (NCLT) is empowered to decide an issue whether Successful Resolution Applicant (SRA) is liable to pay Pre-Corporate Insolvency Resolution Process (CIRP) electricity dues after the approval of the resolution plan and taking over of the corporate debtor under section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 (Code).

Pre-Section 10A Default Is Not Extended By Acknowledgment When Partial Payment Is Made For Acknowledged Debt: NCLAT

Case Title: Mr. Sudhir Bobba V M/s. TVN Enterprises and Anr.

Case Number: Company Appeal (AT) (CH) (Ins) No.95/2024 (IA Nos.262, 263 & 264/2024)

The National Company Law Appellate Tribunal (NCLAT) Chennai Bench of Justice Sharad Kumar Sharma (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that the default falling in pre-section 10A period cannot be said to be continued when some payments towards the acknowledgement of debt accumulating during the prohibited period is made.

Electricity Being Essential Supply Cannot Be Disconnected During CIRP Period As Per Section 14(2) Of IBC: NCLAT

Case Title: Maharashtra State Electricity Distribution Company Ltd. & Anr. Versus Ravi Sethia Resolution Professional of Morarjee Textiles Ltd and Ors.

Case Number: 'Company Appeal (AT) (Insolvency) No. 56 of 2025 & I.A. No. 235 of 2025'

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Barun Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that electricity being an essential supply cannot be disconnected during moratorium period under section 14 of the Insolvency and Bankruptcy Code, 2016 (Code) even if no payment is made for such such supply. The payment for such supply shall form part of Corporate Insolvency Resolution Process (CIRP) costs.

Beneficiaries Of Personal Guarantee Can File Application U/S 95 Of IBC: NCLAT

Case Title: Krishan Kumar Jajoo Versus Piramal Enterprises Ltd. and Anr.

Case Number: Company Appeal (AT) (Ins) No. 1601 of 2024 & I.A. No. 5835 of 2024

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 beneficiaries of personal guarantee can initiate Personal Insolvency Resolution Process (PIRP) against Personal Guarantor under section 95 of the Insolvency and Bankruptcy Code, 2016 (Code).

If Tribunal Is Closed On Last Day Of Filing Appeal U/S 61 Of IBC, That Day Shall Stand Excluded As Per Rule 3 Of NCLAT Rules: NCLAT

Case Title: BSE Ltd. Versus Mrudula Brodie & Ors.

Case Number: Company Appeal (AT) (Insolvency) No. 1862 of 2024 & Interlocutory Application No.6846 of 2024 and Company Appeal (AT) (Insolvency) No. 1883 of 2024 & Interlocutory Application No.6950 of 2024

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that when office of the Tribunal remains closed on the last day of filing an appeal under section 61 of the Insolvency and Bankruptcy Code, 2016 (Code), the appeal can be filed on the day when the Tribunal reopens as per Rule 3 of the NCLAT Rules.

NCLT

NCLT Mumbai Approves ACME Cleantech's Resolution Plan For Reliance Big Private Limited

Case Title: In the Application of Mr. Rohit Ramesh Mehra (Resolution Professional of Reliance Big Private Limited)

Case Number: IA No. 54 of 2024 IN CP(IB) No. 845 (MB) of 2022

The National Company Law Tribunal (NCLT), Mumbai bench comprising Justice V. G. Bisht (Judicial Member) and Shri Prabhat Kumar (Technical Member) has approved the Resolution Plan for Reliance Big Private Limited submitted by ACME Cleantech Solutions Private Limited.

IBC Weekly Round Up [24th February - 2nd March 2025]

Mohd Malik Chauhan

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