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IBC Weekly Round Up [28th April-4th...

IBC Weekly Round Up [28th April-4th May 2025]

Mohd Malik Chauhan

8 May 2025 4:10 PM IST

Explained| Why Supreme Court Set Aside JSW's Resolution Plan For Bhushan Steel & Power Ltd

Case Details : Kalyani Transco vs M/s Bhushan Steel and Power Ltd and connected appeals | C.A. No. 1808/2020

Citation : 2025 LiveLaw (SC) 524

The Supreme Court in its recent decision to set aside the Resolution Plan submitted by JSW Steel for Bhushan Steel and Power Ltd, flagged the various procedural non-compliances done by the Resolution Professional and lack of commercial wisdom exercised by the Committee of Creditors (Coc)

Holding that the Resolution Plan of JSW was illegal and contrary to the provisions of the Insolvency and Bankruptcy Code(IBC), a bench comprising Justice Bela M Trivedi and Justice Satish Chandra Sharma stated that the Committee of Creditors(Coc) should not have accepted it. The bench also faulted the National Company Law Tribunal for approving the Resolution Plan.

NCLT/NCLAT Cannot Review Actions Taken By ED Under PMLA : Supreme Court

Case : Kalyani Transco vs M/s Bhushan Steel and Power Ltd and connected appeals | C.A. No. 1808/2020

Citation : 2025 LiveLaw (SC) 524

In the Bhushan Steel insolvency case, the Supreme Court disapproved of the National Company Law Appellate Tribunal staying with the provisional attachment order passed against the assets of Bhushan Steel and Power Ltd under the Prevention of Money Laundering Act (PMLA).

The Court emphatically stated that the National Company Law Tribunal (NCLT) or the National Company Law Appellate Tribunal (NCLAT) cannot review the actions taken by statutory authorities under other laws.

S. 8 IBC | Service Of Demand Notice On Corporate Debtor's Key Managerial Personnel Is Valid To Trigger Insolvency Process : Supreme Court

Case Title: VISA COKE LIMITED VERSUS M/S MESCO KALINGA STEEL LIMITED

Citation : 2025 LiveLaw (SC) 505

The Supreme Court on Tuesday (April 29) upheld the delivery of a demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (“IBC”) to the corporate debtor's Key Managerial Personnel (KMP), stating that the delivery of the notice to the KMP substantially complies with the requirement of Section 8 of IBC.

Setting aside the National Company Law Appellate Tribunal (NCLAT) ruling, the bench of Justices JB Pardiwala and R Mahadevan allowed the Operational Creditor's appeal, stating that delivery of the demand notice to the corporate debtor's KMP constitutes deemed service of the notice.

NCLAT

Repeated Filing Of Applications U/S 42 Of IBC Violates Principle Of Res Judicata, Amounts To Abuse Of Law: NCLAT Chennai

Case Title: Employees' Provident Fund Organization v/s Dr. Madurai Sundaram Sankar

Case Number: Company Appeal (AT) (CH) (Ins) No. 193/2025

The National Company Law Appellate Tribunal (NCLAT), Chennai, comprising Justice Sharad Kumar Sharma (Member (Judicial) and Jatindranath Swain (Member (Technical) dismissed appeals filed by the EPFO against the RP and SRA, stating that the same is restricted by the Doctrine of Res Judicata.

Joint Application U/S 9 Of IBC Not Maintainable If Individual Claims Do Not Meet Threshold Limit U/S 4 Of IBC: NCLAT

Case Title: Kavindra Kumar and Ors. Vs M/s Desein Private Limited

Case Number:Company Appeal (AT) (Insolvency) No. 1272 of 2023

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Baurn Mitra (Technical Member) and Mr. Arun Baroka (Technical Member) has held that in a joint application filed by operational creditors under Section 9 of the Insolvency and Bankruptcy Code, 2016 (the Code), the threshold limit prescribed under Section 4 must be independently satisfied by each operational creditor. The collective or aggregate debt of all operational creditors cannot be clubbed to meet the minimum threshold requirement for initiating the Corporate Insolvency Resolution Process (CIRP).

No Claim Can Be Submitted After Approval Of Resolution Plan By CoC If Creditor Was Aware Of CIRP Initiation Against Corporate Debtor: NCLAT

Case Title: T.C.A. Surveyors & Advisors Pvt. Ltd. Versus Pooja Bahry, Est. RP for United News of India & Ors.

Case Number:Company Appeal (AT) (Insolvency) No. 533 of 2025

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member) and Mr. Arun Baroka (Technical Member) has held that when a creditor is well aware of the initiation of the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor but chooses not to file a claim before the Resolution Professional, it cannot be permitted to submit the claim after the Resolution Plan has been approved by the Committee of Creditors (CoC).

Homebuyers Remain Financial Creditors U/S 5(8)(F) Of IBC Regardless Of Whether They Obtained RERA Recovery Certificates: NCLAT

Case Title: Shailendra Agarwal Versus Asit Upadhyaya and Ors.

Case Number:Company Appeal (AT) (Insolvency) No. 327 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 whether or not homebuyers have obtained recovery certificates from the Real Estate Regulatory Authority (RERA), they remain financial creditors under Section 5(8)(f) of the Insolvency and Bankruptcy Code, 2016 (Code).

NCLT Cannot Adjudicate Disputed Contractual Claims During Liquidation Under IBC If There Exists An Arbitration Clause: NCLAT Chennai

Case Title: Amier Hamsa Ali Abbas Rawther v. NLC India Limited

Case Number: Company Appeal (AT) (CH) (Ins) No. 213/2025

The National Company Law Appellate Tribunal (NCLAT), Chennai Bench, comprising Justice Sharad Kumar Sharma (Member-Judicial) and Jatindranath Swain (Member-Technical), dismissed an appeal arising out of an order passed by the NCLT, Chennai. The tribunal observed that a liquidator under the IBC, 2016, cannot seek adjudication of a disputed contractual claim if the contract provides an arbitration clause. The tribunal held that the IBC forums are not the appropriate platform for adjudicating and recovering the dues, and the appellant must seek recourse through the mutually agreed forum.

When There Is Sufficient Material To Show Dispute U/S 9(5)(ii)(d) Of IBC, Adjudicating Authority Cannot Ignore The Same: NCLAT, New Delhi

Case Title: Bhawani Prasad Mishra Vs Armaco Infralinks Pvt. Ltd. & Anr

Case Number: Company Appeal (AT) (Insolvency) No. 557 of 2025

The National Company Law Appellate Tribunal, Principal Bench, New Delhi (NCLAT) comprising of Justice Ashok Bhushan (Chairperson) and Barun Mitra (Member Technical) admitted appeal filed Suspended Director of the Corporate Debtor challenging the order dated 26.03.2025 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court-I, admitting Section 9 application filed by Armaco Infralinks Pvt. Ltd.

NCLT

Resolution Professional Can't Exclude Voting Share Of Members Who Abstain From Voting When Calculating Requisite Majority: NCLT Mumbai

Case Title: Oriental Bank of Commerce Vs. Shree Bhimeshwari Ispat Private Limited

Case Number: IA 141/2023 IN CP (IB) No. 4550/MB-II/2018

The National Company Tribunal (NCLT), Mumbai Bench comprising of Ms. Lakshmi Gurung (Member (Judicial) and Shri Anil Raj Chellan (Member (Technical) disposed a Section 60(5) application filed by the Applicant against the approval of the Resolution Plan, stating that the same lacked the desired voting percentage to be approved as a resolution plan.

Existence Of Proceedings Under MSMED Act Or S.138 NI Act Doesn't Amount To Pre-Existing Dispute U/S 9 Of IBC: NCLT Mumbai

Case Title: M/s International Electricals v. Aryan Electricals Private Limited

Case Number: CP (IB) 1211/MB /2023

The National Company Law Tribunal (NCLT), Mumbai Bench, comprising Shri Prabhat Kumar (Member- Technical) and Justice V. G. Bisht, has allowed an application filed by an operational creditor under section 9 of the IBC seeking initiation of the CIRP against the Corporate Debtor. The Adjudicating Authority observed that the proceedings under the Micro, Small, and Medium Enterprises Development (MSMED) Act or section 138 of the Negotiable Instruments Act don't constitute a pre-existing dispute under section 9 of the IBC. The tribunal also observed that a partner of a firm is authorized to issue a demand notice and initiate proceedings under section 9 of the IBC in the name of the firm.

Loan Taken From "Special Window For Affordable & Mid-Income Housing Fund" To Be Recognised As 'Interim Finance' U/S 5(15) Of IBC: NCLT, Delhi

Case Title: M/s Conquerent Control Systems Private Limited V/s M/s Ansal Crown Infrabuild Private Limited

Case Number: CP (IB) No. 783 (ND)/ 2022

The National Company Law Tribunal (“Tribunal”), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), allowed the claim of the applicant as Interim Finance holding that Loan provided by SWAMIH Fund (Special Window for Affordable and Mid-Income Housing) qualifies to be recognised as 'Interim Finance' under Section 5(15) of the Insolvency & Bankruptcy Code (“the Code”).

SWAMIH is a government-backed initiative in India, designed to provide funding to revive stalled residential projects. It acts as a "last-mile funding" solution by providing capital to complete construction.

Claims For Interest Based On RERA Order Do Not Translate Into Financial Debt Under IBC: NCLT Delhi

Case Title: M/s GENESIS COMTRADE PRIVATE LIMITED VS M/s OPULENT INFRADEVELOPERS PVT. LTD

Case Number: IA 1796(ND)/2024 in CP No.: IB 304(ND)/2022

The National Company Law Tribunal, New Delhi (NCLT) comprising of Shri Manni Sankariah Shanmuga Sundaram, Member (Judicial) and Dr. Sanjeev Ranjan, Member (Technical) dismissed a Section 60(5) application filed by the Mr. Yogesh Kumar Gupta against Mr. Devendra Umrao, the Resolution professional (RP) of M/s Opulent Infradevelopers Pvt Ltd.

Guarantor's Liability Cannot Exceed Contractual Cap By Adding Interest On Principal Amount For Delayed Payment: NCLT Mumbai

Case Title: Seeta Neeraj Shah Vs ICICI Bank Ltd.

Case Number: IA/4194/2024 IN C.P. (I.B) No. 119/MB/2021

The National Company Law Tribunal (NCLT) Mumbai bench of Justice Sh. Sushil Mahadeorao Kochey (Judicial Member) and Sh. Charanjeet Singh Gulati (Technical Member) has held that the guarantor's liability cannot exceed the limit specified in the contract of guarantee. When the corporate debtor defaults, the guarantor is bound only to the extent of the capped amount that is Rs. 25 crore in the present case, as consciously agreed upon by the parties. This cap cannot be exceeded by adding interest on the principal amount for delayed payment.

IBC Weekly Round Up [28th April-4th May 2025]

Mohd Malik Chauhan

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