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IBC Weekly Round-Up [7th April-13th...

IBC Weekly Round-Up [7th April-13th April 2025]

Mohd Malik Chauhan

14 April 2025 11:55 AM IST

Homebuyers File Review Petition Against Supreme Court Judgment Holding Greater Noida Industrial Authority A 'Secured Creditor' Under IBC

Case Title: Blossom Zest Flat Buyers Welfare Association v. Greater Noida Industrial Development Authority and Ors.

A plea has been filed before the Supreme Court seeking review of its judgment dated February 12, 2024 which classified Greater Noida Industrial Development Authority as a 'secured creditor' for the purposes of Corporate Insolvency Resolution Processes under the Insolvency and Bankruptcy Code (IBC).

Filed by a homebuyers' association, the plea states that the impugned judgment has led the National Company Law Tribunal to send back many resolution plans to the Committee of Creditors for reconsideration on the ground that the same do not treat Noida/Greater Noida as 'secured creditor'.

NCLAT

Petition U/S Section 7 Of IBC Cannot Be Entertained Based On Guarantee Invoked During Prohibited Period U/S 10A Of IBC: NCLAT

Case Title: IDBI Bank Limited Versus Zee Entertainment Enterprises Limited

Case Number:Company Appeal (AT) (Insolvency) No. 939 of 2023

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 the liability of the guarantor arises only when the guarantee executed by them in favor of the creditor is invoked. If such guarantee was invoked during the period prohibited under Section 10A of the Insolvency and Bankruptcy Code, 2016 (the Code), an application under Section 7 of the Code cannot be maintained.

Service Of Notice On Email Provided In Section 7 Petition Constitutes Sufficient Compliance With Rule 38(1) Of NCLT Rules: NCLAT

Case Title:Akhilesh Kumar Versus Bank of Baroda and Anr.

Case Number:Company Appeal (AT) (Insolvency) No. 512 of 2025 & I.A. No. 1946 of 2025

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 service of notice on the email address provided in the petition filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code) constitutes sufficient compliance with Rule 38(1) of the NCLT Rules.

Ten-Day Time Period U/S 99 Of IBC For Submission Of Report By Resolution Professional Is Directory, Not Mandatory: NCLAT

Case Title: Suresh Atlani Atlani Villa Versus Omkara Asset Reconstruction Pvt. Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 200 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 10-day period provided under Section 99 of the Insolvency and Bankruptcy Code,2016 (Code) within which the Resolution Professional has to submit the report after appointment, cannot be considered mandatory, as no consequences are prescribed in the provision itself for failure to submit the report within the stipulated period, even though the word "shall" has been used.

Lenient Approach To Be Adopted While Condoning Delay In Refiling, But Sufficient Cause Must Be Shown: NCLAT

Case Title:Prakash Ambure & Ors. Versus Invent Bio-Med Pvt. Ltd.

Case Number:I.A. No. 1680 of 2024 In Company Appeal (AT) (Insolvency) No. 582 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 a lenient approach has to be adopted by the court while condoning the delay in refiling the appeal; however, sufficient cause must still be shown before the application for condonation of delay in refiling the appeal can be allowed.

Interest Mentioned In Unsigned Invoice Cannot Be Included In Calculation Of Threshold Limit U/S 4 Of IBC: NCLAT New Delhi

Case Title: Jai Narain Fabtech Pvt. Ltd. v. Cheema Spintex Ltd.

Case Number: Company Appeal (AT) (Insolvency) No. 1515 of 2023 & I.A. No. 5453 of 2023

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Rakesh Kumar Jain, Member (Judicial), Mr. Naresh Salecha, Member (Technical) and Mr. Indevar Pandey, Member (Technical), dismissed an appeal arising from an order by the NCLT Chandigarh. The tribunal held that the interest specified in an unsigned invoice cannot be included in the calculation of the debt for the purpose of meeting the threshold limit under Section 4 of the IBC.

Hire Charges Cannot Be Calculated In CIRP Costs When Asset Is Not Used by Corporate Debtor: NCLAT New Delhi

Case Title: Starlog Enterprises Ltd. v. Pulkit Gupta

Case Number: Company Appeal (AT) (Insolvency) No. 558 of 2025

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Ashok Bhushan (Chairperson), Barun Mitra (Member - Technical), and Arun Baroka (Member - Technical), dismissed an appeal arising from an order by the NCLT Mumbai. The tribunal held that the hire charges for the assets not used by the corporate debtor during the CIRP cannot be classified as CIRP costs under Regulation 31(b) of the CIRP Regulations.

Petition U/S 7 Of IBC Can Be Entertained For Default On Interest Component Of Loan If It Occurs After Section 10A Period: NCLAT

Case Title:Vinod Kumar Versus Omkara Asset Reconstruction Pvt. Ltd. & Anr

Case Number:Company Appeal (AT) (Insolvency) No.2265 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 an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code), can be entertained based on the default in the interest component committed after the prohibited period under Section 10A of the Code, provided that the threshold limit of Rs. 1 crore under Section 4 of the Code is met.

When Acknowledgment Of Debt By Repeated One-Time Settlement Proposals Is Not Controverted, Petition U/S 7 Of IBC Can Be Entertained: NCLAT

Case Title: Rohit Suri (suspended director of corporate debtor) Versus Rajasthan Financial Corporation and Anr.

Case Number:Company Appeal (AT) (Ins) No. 1125 of 2024 & I.A. No. 4037, 4038, 4039 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 when no contrary facts are presented by the Corporate Debtor to the arguments advanced by the Financial Creditor that multiple One Time Settlement (OTS) proposals made by the Corporate Debtor extended the limitation period with each new proposal, it cannot be contended that an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code), based on the Corporate Debtor's acknowledgment of liability through such OTS proposals, is not maintainable provided it is filed within three years from the date of the last OTS proposal.

No Right To Be Heard Can Be Given At Stage U/S 99 Of IBC, Resolution Professional's Role Is Only Recommedatory And Not Adjudicatory: NCLAT

Case Title:IQBAL JUMABHOY V SHRI MANOJ KUMAR ANAND and Anr.

Case Number:Company Appeal (AT) (CH) (Ins) No. 29/2025 IA No. 115/2025

The National Company Law Appellate Tribunal (NCLAT) Chennai bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Jatindranath Swain (Technical Member) has held that no opportunity of being heard is required at the stage when a report under Section 99 of the Insolvency and Bankruptcy Code, 2016 (Code) is submitted, as the role of the Resolution Professional at this stage is merely to assist the Adjudicating Authority in deciding whether the application should be accepted or rejected. Therefore, if no opportunity is given at this stage by the Resolution Professional, the admission order of the petition based on such a report cannot be set aside.

Resolution Professional Can File Liquidation Application U/S 33 Of IBC If CIRP Period Expires Without Approved Resolution Plan: NCLAT

Case Title: Subh Laxmi Investment Advisory Pvt. Ltd. Versus Committee of Creditors of Sintex Plastics Technology Ltd. & Ors.

Case Number: Company Appeal (AT) (Ins) No. 1104 of 2024 & I.A. No. 3977 of 2024

The National Company Law Appellate Tribunal (NCLAT) New Delhi bench of Justice Rakesh Kumar Jain (Judicial Member) and Mr. Naresh Salecha (Technical Member) has held that when the extended Corporate Insolvency Resolution Process (CIRP) period has expired and no resolution plan has been approved, it is incumbent upon the Resolution Professional to file an application for the liquidation of the corporate debtor. A discussion regarding the filing of a liquidation application and the Committee of Creditors (CoC)'s request to nominate a liquidator is sufficient for the purposes of Section 33 of the Insolvency and Bankruptcy Code, 2016 (Code).

NCLT May Waive Eligibility Criteria U/S 244(1)(b) Of Companies Act When Allegations Of Oppression & Mismanagement Are Not Previously Adjudicated: NCLAT

Case Title: Somangsu Biswas Versus the Calcutta Cricket & Football Club

Case Number: COMPANY APPEAL (AT) NO.56 OF 2024

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 when there are internal differences among the members of a company and repeated allegations of oppression and mismanagement have been raised by some members, which have not been previously adjudicated, the eligibility criteria prescribed under Section 244(b) of the Companies Act, 2013 (Companies Act) required for filing such an application, may be waived by the National Company Law Tribunal (NCLT) by exercising its discretionary power under the proviso to Section 244(b) of the Act.

Provident Fund Claims Filed After Approval Of Resolution Plan By Committee Of Creditors Cannot Be Admitted By Resolution Professional: NCLAT

Case Title: REGIONAL PROVIDENT FUND COMMISSIONER Versus MR. JAYESH SANGHAJKA

Case Number: Company Appeal (AT) (Insolvency) No. 2100 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 statutory obligations must be fulfilled during insolvency proceedings; however, this does not mean that statutory dues including provident fund claims can be submitted even after the Resolution Plan has been approved by the Committee of Creditors (CoC). Therefore, the Resolution Professional is not obligated to admit additional claims filed after the CoC's approval of the plan.

Mortgagee Bank Cannot Seek Exclusion Of Property From Resolution Plan Approved By Unit Holders Having Conveyance Deeds: NCLAT

Case Title: HDFC Bank Ltd Versus Atul Kumar Kansal & Ors.

Case Number: Company Appeal (AT) (Insolvency) No. 549 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 bank in whose favor mortgage rights were created over the property of the Corporate Debtor cannot seek exclusion of the property from the Resolution Plan, especially when the unit holders, possessing either a conveyance deed or builder-buyer's agreements, have approved the Resolution Plan.

Written Acknowledgment Of Debt Extends Limitation Period For Insolvency Application: NCLAT New Delhi

Case Title: Ajay Singal v. Mr. Ranjan Chakraborti & Anr.

Case Number: Company Appeal (AT) (Insolvency) No. 1285 and 1272 of 2024

The National Company Law Appellate Tribunal (NCLAT), Principal Bench, New Delhi, consisting of Justice Yogesh Khanna (Member-Judicial) and Mr. Ajai Das Mehrotra (Member - Technical), disposed of an appeal arising from an order passed by the NCLT New Delhi. The bench held that by virtue of Section 18 of the Limitation Act, the written acknowledgment of debt extends the limitation period for initiating the CIRP under Section 9 of the IBC, 2016. The bench observed that the limitation will be observed from the last written acknowledgment of the debt.

Limitation Period For Filing Appeal Begins From Date Of Pronouncement If Substantive Order Is Passed: NCLAT

Case Title: Rajan Rawat, RP Future Supply Chain Solutions Ltd. Versus Kishanlal Shivramji Sharma

Case Number: Company Appeal (AT) (Insolvency) No. 167 of 2025 & I.A. No. 657 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 it is only when no substantive order is passed on the date of pronouncement that the date of uploading the order shall be considered for calculating the limitation period, and not the date of pronouncement. However, this principle cannot be invoked when a substantive order was, in fact, passed on the date of pronouncement in such cases, the limitation period shall begin from that very date.

Conversion Of Partner's Dues Into Loan Does Not Qualify As Financial Debt U/S 5(8) Of IBC: NCLAT

Case Title: Gogia Leasing Ltd. Versus Sunanda Polymers LLP

Case Number: Company Appeal (AT) (Insolvency) No. 405 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 conversion of partners' dues against the partnership firm into a loan cannot become a financial debt merely because the dues were assigned at the time the partnership firm was converted and registered as a Limited Liability Partnership (LLP). It further held that at the time the debt arose, it was not a financial debt within the meaning of Section 5(8) of the Insolvency and Bankruptcy Code, 2016 (Code)

NCLT

No Automatic Right To Interest Under IBC, Regulation 16A(7) Of CIRP Regulations Does Not Mandate Interest On Principal Amount: NCLT Mumbai

Case Title: Klassic Wheels Limited Hirkesh Vs Amit Vijay Karia and Anr.

Case Number: IA/5159/2024 IN C.P. (I.B) No. 715/MB/2021

The National Company Law Tribunal (NCLT) Mumbai bench of Justice Sushil Mahadeorao Kochey (Judicial Member) and Mr. Charanjeet Singh Gulati (Technical Member) has held that there is no provision in the Insolvency and Bankruptcy Code, 2016 (the Code) for automatic interest on the principal amount. Specifically, Regulation 16A(7) of the CIRP Regulations, 2016 does not provide for interest to be charged on the principal. Therefore, such interest cannot be claimed as a matter of right, especially at a belated stage when the Corporate Insolvency Resolution Process is nearing completion.

Absence Of Creditor's Name In Balance Sheet Does Not Negate Acknowledgment Of Debt: NCLT Kolkata

Case Title: State Bank of India v. S R Timber Products Private

Case Number: CP (IB) No. 27/KB/2024

The National Company Law Tribunal (NCLT), Kolkata, special bench, consisting of Smt. Bidisha Banerjee (Member - Judicial) and Shri Sameer Kakar (Member - Technical), has allowed an application filed by the State Bank of India under Section 7 of the IBC seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor.

Disbursal Against Time Value Of Money Constitutes Financial Debt: NCLT Kolkata

Case Title: Horizon Commtrade Limited v. Jasmine Commodities Private Limited

Case Number: Company Petition (IB) No. 271/KB/2024

The National Company Law Tribunal, Kolkata bench, consisting of Smt. Bidisha Banerjee (Member - Judicial) and Cmde Siddharth Mishra (Member - Technical), has allowed an application filed under Section 7 of the IBC seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor. The bench held that the financial debt exists where money is disbursed against the consideration for time value of money. The bench also observed that once the “debt” and “default” are admitted or established, the petition must be admitted.

Insufficiently Stamped Agreements Do Not Present A Bar To Application U/S 7 Of IBC: NCLT Bengaluru

Case Title: M/s Embassy Services Private Limited v. Redwoods Infrastructure Private Limited

Case Number: CP (IB) No. 65/BB/2024

The National Company Law Tribunal (NCLT), Bengaluru Bench, consisting of Shri. Sunil Kumar Aggarwal, Member (Judicial), and Shri. Radhakrishna Sreepada, Member (Technical), admitted a petition filed under Section 7 of the IBC, 2016, read with Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, M/s. Redwoods Infrastructure Private Limited. The tribunal reiterated that insufficiently stamped/unstamped agreements do not present a bar to a Section 7 application. The tribunal also observed that the mere fact that the debt is disputed does not affect the application, as long as the debt is due.

IBC Weekly Round-Up [7th April-13th April 2025]

Mohd Malik Chauhan

Homebuyers File Review Petition Against Supreme Court Judgment Holding Greater Noida Industrial Authority A 'Secured Creditor' Under IBC

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