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IBC Weekly Round-Up [14th...

IBC Weekly Round-Up [14th April-20th April 2025]

Mohd Malik Chauhan

21 April 2025 5:35 PM IST

Delhi High Court Reduces Suspension Period Imposed By IBBI Disciplinary Committee On Insolvency Professional, Finds Penalty Disproportionate

Case Title: Sandeep Kumar Bhatt vs. Insolvency & Bankruptcy Board of India & Ors.

Case Number: LPA 1054/2024, CM APPL. 61894/2024 & CM APPL.1284/2025

The Delhi High Court bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela have reduced the suspension period imposed on the Appellant/Resolution Professional, noting that the Disciplinary Committee of IBBI overlooked material aspects and relied on incorrect data while imposing the penalty. It reduced the suspension to the period already undergone.

NCLAT

Merely Stamping Invoices Does Not Imply Acceptance Of Debt Without Resolution Of Pre-Existing Dispute: NCLAT

Case Title: Tirupati Drilling & Mining Services Private Limited Versus Sadbhav Engineering Limited

Case Number: Company Appeal (AT) (Insolvency) No. 95 of 2025 & I.A. No. 395 of 2025

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that mere stamping of tax/proforma invoices at the site office by lower functionaries of the Corporate Debtor only indicates receipt and does not imply acceptance by the Corporate Debtor that there was no pre-existing dispute with respect to the quantum of the amount payable by the Corporate Debtor to the Operational Creditor, especially when the dispute related to the quantum of the amount had already been raised multiple times before issuance of the demand notice under Section 8 of the Insolvency and Bankruptcy Code, 2016 (Code).

NCLT Cannot Rectify Or Amend Uploaded Order Without Hearing Affected Parties: NCLAT

Case Title: Deccan Advanced Sciences Private Limited V Escientia Biopharma Private Limited And Ors.

Case Number: Company Appeal (AT) (CH) No.43/2025 (IA Nos.535, 536, 537 & 538/2025)

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 once an order is uploaded on the website, it is deemed to be in the public domain. Therefore, the National Company Law Tribunal (NCLT) cannot carry out any rectification or amendment under Rule 154 of the NCLT Rules without first providing an opportunity of being heard to all affected parties.

Adjudicating Authority Can't Presume Applicability Of Interest On Principal Amount In Absence Of Express Agreement Between Parties: NCLAT

Case Title: Shitanshu Bipin Vora Suspended Director of Exclusive Linen Fabrics Pvt. Ltd. Versus Shree Hari Yarns Pvt. Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 2204 of 2024

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that while deciding an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 (Code), the Adjudicating Authority cannot presume the applicability of interest based on vague statements in the invoices issued by the Operational Creditor. Unless there is a specific contract between the parties stipulating the payment of interest on delayed payments, such claims for interest are not legally sustainable.

Date Of Default Pleaded U/S 7 Of IBC Cannot Be Changed Automatically On Basis Of Arbitral Award Passed After Filing Application: NCLAT

Case Title: Deepak Mahadev Shirke Versus Unity Small Finance Bank Limited and Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 490 of 2025

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Ashok Bhushan (Judicial Member), Mr. Arun Baroka (Technical Member) and Mr. Barun Mitra (Technical Member) has held that the date of default mentioned in Part IV of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) cannot be changed merely on the basis that an arbitral award was passed subsequent to the filing of the application.

Petition U/S 7 Of IBC Can't Be Entertained During Moratorium Period Under Accepted Restructuring Proposal: NCLAT

Case Title: CATALYST TRUSTEESHIP LTD. Versus ECSTASY REALTY PVT. LTD

Case Number: Company Appeal (AT) (Insolvency) No. 467 of 2023

The National Company Law Appellate Tribunal (NCLAT) bench of Justice Ashok Bhushan (Judicial Member) and Mr. Barun Mitra (Technical Member) has held that once the debenture holders have acted upon the restructuring proposal given by the Corporate Debtor, which included a moratorium on its repayment obligations, they cannot be permitted to file an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code), until the expiry of the moratorium period proposed under the restructuring plan especially when the Corporate Debtor had fulfilled its obligations under the said proposal to which the financial creditors had consented.

NCLT

Application U/S 19(2) Of IBC Is Not Maintainable Against Third Party: NCLT Delhi

Case Title: Piramal Capital & Housing Finance Limited V/s M/s Andes Town Planners Private Limited

Case Number: CP (IB) No. 317 (ND)/ 2022, IA 3738/2023, Intervention P 28/2024

The National Company Law Tribunal (NCLT), Chandigarh bench of Shri Bachu Venkat Balaram Das (Judicial Member) and Shri Atul Chaturvedi(Technical Member), has held that an application under section 19(2) of the Insolvency & Bankruptcy Code, 2016 (“Code”), filed by the Resolution Professional (“RP”) to collect information for effective conduct of Corporate Insolvency Resolution Process (“CIRP”) is not maintainable against third party to the proceedings.

Fraud Or Malicious Intent U/S 65 Of IBC Is Proven If Terms Of Loan Extended By Financial Creditor Are Designed To Cause Default: NCLT

Case Title: M/s Saivi Finance Private Limited V/s M/s AKJ Metals Private Limited

Case Number: IA/1044/ND/2024 and CP(IB)/24/ND/2024

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member) held that a Petition under Section 7 of Insolvency & Bankruptcy Code, 2016 (“Code”) is proved to have been filed with Fraud or Malicious intent under Section 65 of the Code if terms of the loan extended by Financial Creditor are designed to cause default by the Corporate Debtor.

Acknowledgement Of Debt By Corporate Debtor Extends Limitation Period For Personal Guarantor As Well: NCLT Chandigarh

Case Title: Manveen Kaur, Personal Guarantor of M/s Bimbh Knit Fab Pvt. Ltd.

Case Number: CP(IB) No.207/Chd/Pb/2024

The National Company Law Tribunal (NCLT), Chandigarh bench of Shri Harnam Singh Thakur (Judicial Member) and Shri Shishir Agarwal (Technical Member), has held that acknowledgement of debt by the principal borrower would extend the limitation period under section 18 of the Limitation Act, 1963 (Limitation Act) for the personal Guarantor as well for initiation of Personal Insolvency Resolution Process (PIRP) under Section 94 of Insolvency & Bankruptcy Code, 2016 (Code).

Petition U/S 7 Of IBC Based On Arbitral Award Cannot Be Admitted Before Expiration Of 120 Days From Date Of Award: NCLT Delhi

Case Title: M/s Brilliant Metals Pvt. Ltd. V/s Avyukta Dairy Products Pvt. Ltd.

Case Number: CP (IB) No. 613 (ND)/ 2024

The National Company Law Tribunal (NCLT), New Delhi bench of Shri Manni Sankariah Shanmuga Sundaram (Judicial Member) and Dr. Sanjeev Ranjan (Technical Member), has held that a Petition under Section 7 of Insolvency & Bankruptcy Code, 2016 (Code), based on Arbitral Award passed in favour of the Financial Creditor, cannot be admitted unless the time period for filing objections (120 days) against the Award as per Section 34 of the Arbitration & Conciliation Act, 1996 (Arbitration Act) has expired.

Interest Accrued Before MSME Registration Cannot Be Included In Operational Debt For Plea U/S 9 Of IBC: NCLT Mumbai

Case Title: Skoda Auto Volkswagen India Private Limited Versus Susee Automotive Private Limited

Case Number: IA (I.B.C) No. 1116/MB/2024 AND CP (IB) No. 1107/MB/2023

The National Company Law Tribunal (NCLT) Mumbai bench of K. R. Saji Kumar (Judicial Member) and Sanjiv Dutt (Technical Member) has held that the provisions of the Micro, Small and Medium Enterprises Development Act (MSMED Act) cannot override the threshold limit prescribed under Section 4 of the Insolvency and Bankruptcy Code, 2016 (the Code). Therefore, interest accrued on the delayed payment to an MSME prior to its registration under the MSMED Act cannot be included as part of the operational debt while filing an application under Section 9 of the Code.

IBC Weekly Round-Up [14th April-20th April 2025]

Mohd Malik Chauhan

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