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YEAR 2023 CASE DIGEST - PART I

NCLAT JUDGMENTS ON INSOLVENCY AND BANKRUPTCY CODE,
2016 (IBC) AND COMPANIES ACT, 2013
Part-2 and Part-3

1. CIRP Regulation 30A has been made to give effect to the provisions of IBC and
the Regulation 30A has to be read harmoniously with the provisions of IBC
Case Name: Sintex Plastics Technology Ltd. Vs. Mahatva Plastic Products and Building Materials
Pvt. Ltd.
Case Citation: (2023) ibclaw.in 01 NCLAT
NCLAT held that the Adjudicating Authority in paragraph 17 of the impugned order dated
29.06.2021 were avoidable for the reason that NCLT does not have jurisdiction to comment on the
illegality or appropriateness of any provision of IBC or Regulation framed thereunder. However, the
observation that in appropriate case jurisdiction under Rule 11 of NCLT Rules 2016 can be exercised
is held to be correct. We do not subscribe to the view of the Adjudicating Authority that Regulation
30-A is inconsistent with Section 12A of IBC. The Regulation 30-A has been made to give effect to
the provisions of IBC and the Regulation 30-A has to be read harmoniously with the provisions of
IBC. The provision of the Regulation 30-A has to be given effect to, unless it is contrary to any
provisions of IBC. We do not find any inconsistency between Section 12A and Regulation 30-A so as
to make Regulation 30A unworkable.

2. Whether after approval of Resolution Plan by CoC u/s 30 of IBC and filing an
application before NCLT for its approval, any Settlement Proposal under
Section 12A of IBC can be entertained deferring consideration of approval of
Resolution Plan by the NCLT?
Case Name: Hem Singh Bharana Vs. M/s Pawan Doot Estate Pvt. Ltd. -
Case Citation: (2023) ibclaw.in 23 NCLAT
NCLAT held that Regulation making Authority was well aware about the entire process under the
Code, including approval of the Plan by the CoC and filing of the Application before the Adjudicating
Authority for approval of the Resolution Plan. Had it intended that 12A Application can be
entertained even after Resolution Plan is approved by the CoC, the proviso would not have confined
to issue invitation for Expression of Interest, rather, it could have been conveniently mentioned that
after approval of Resolution Plan Applicant should justify withdrawal. It was never intended that
after approval of Resolution Plan by CoC, Application under Section 12A can be entertained. Hence,
the Regulation is framed in that manner.

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3. Where the post filing Notice was sent to the Corporate Debtor and if it does
not appear before NCLT, CIRP application filed by a Financial Creditor can be
determined ex-parte
Case Name: Mr. T.V. Sandeep Kumar Reddy, Suspended Director, M/s. Gayatri Projects Ltd. Vs.
State Bank of India
Case Citation: (2023) ibclaw.in 17 NCLAT
NCLAT held that the burden of proving, the service of summons, is on the petitioner /1st
Respondent /Bank /Financial Creditor. In law, if a registered summons / notice is sent to a
Respondent / Defendant, at his / her correct address, the presumption of service, arises, and an ex-
parte decree, will not be set aside. An application, under Section 7 of the Code, 2016, is not to be
rejected, merely on technical ground. In law, a letter of balance confirmation, extends the period of
limitation. A Judicial Discretion, is to be regulated, as per known rules of law, and not on mere
impulse or whim of a person, for whom, it is given on the hypothesis that he is circumspect. Any
person, who is in law, entitled to stake a claim for payment, has no prohibition, under the Code,
2016, to prefer the same, by means of an application/petition. The prevalent of default, is a sine qua
non, for admitting, an application / petition, under the Code, 2016, in respect of the insolvency
proceedings.

4. The obligation of the Adjudicating Authority to direct for liquidation shall rise
only when decision of the CoC is in accordance with the IBC
Case Name: Hero Fincorp Ltd. Vs. M/s Hema Automotive Pvt. Ltd.
Case Citation: (2023) ibclaw.in 21 NCLAT
NCLAT held that there is no doubt that in Section 33, sub-sections (1) and (2) legislature has used
the expression “shall”. However, the obligation of the Adjudicating Authority to direct for liquidation
shall rise only when decision of the CoC is in accordance with the Code.
Judicial review of the decision of the CoC in a particular case is not precluded. In Sreedhar Tripathy,
it has been clearly held that judicial review of the decision of the CoC is not precluded and it
depends on facts of each case.

5. In section 9 IBC proceeding, the Adjudicating Authority is not to enter into

final adjudication with regard to existence of dispute between the parties
regarding the operational debt
Case Name: Apavarga Trading Company Vs. Hazel Foods Pvt. Ltd.
Case Citation: (2023) ibclaw.in 19 NCLAT
NCLAT held that it is well settled that in section 9 proceeding, the Adjudicating Authority is not to
enter into final adjudication with regard to existence of dispute between the parties regarding the
operational debt. What has to be looked into is whether the defence raises a dispute which needs
further adjudication by a competent court.

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6. Whether the provisions of Section 11B of the Central Excise Act, 1944 are
inconsistent with Section 33 of the IBC so as to be overridden by virtue of
provisions of Section 238 of the IBC
Case Name: Office of the Assistant Commissioner of Central Tax & Anr. Vs. Mr. Rakesh Singala,
Liquidator of M/s. Apple Industries Ltd.
Case Citation:(2023) ibclaw.in 07 NCLAT
NCLAT held hat Section 11B is enabling provision which entitles the Corporate Debtor to make an
Application for refund of duty. The Moratorium which becomes operative after liquidation order
has been passed is for the purpose for protecting the Corporate Debtor from any legal proceeding.
Present is not a case where any legal proceeding has been initiated against the Corporate Debtor
under the Central Excise Act, 1944. Present is a case where for refund, to which the Corporate
Debtor is entitled, whether the Application is required to be made by the Corporate Debtor in
accordance with the Central Excise Act, 1944 or not. The statutory provision of the Central Excise
Act, 1944 does not contemplate automatic refund of any duty to which company may be entitled.
Section 11B of the Central Excise Act, 1944 contemplates a procedure for availing refund and we do
not see any inconsistency in Section 11B of the Central Excise Act, 1944 with Section 33(5) of the
IBC.

7. Section 65 of IBC has to be read as enabling provision to reject an application

even on proving of debt and default Section 10 Application is not to be
obligatorily admitted
Case Name: Wave Megacity Centre Pvt. Ltd. Vs. Rakesh Taneja & Ors.
Case Citation: (2023) ibclaw.in 05 NCLAT
NCLAT held that when finding recorded by the Adjudicating Authority is that Section 10 application
has been initiated fraudulently and maliciously, even if there is debt and default, the Adjudicating
Authority is not obliged to admit Section 10 Application. Section 10 and Section 65, which are part of
the same statutory scheme needs to be read together to give effect to the legislative scheme of the
Code.
In event CIRP is initiated by a corporate applicant fraudulently with malicious intent for any purpose
other than the resolution of insolvency, holding it that it is obligatory for the Adjudicating Authority
to admit Section 10 Application, will be contrary to the statutory scheme under Section 65. In event
conditions under Section 65 are fulfilled, Section 10 Application can be rejected, even if debt and
default is proved.

8. An irrevocable and unconditional Bank Guarantee can be invoked even

during moratorium period in view of the amended provision under Section
14(3)(b) of the IBC
Case Name: IDBI Bank Ltd. Vs. Indian Oil Corporation Ltd.

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Case Citation: (2023) ibclaw.in 35 NCLAT

NCLAT concluded that having regard to the ratio of the Hon’ble Apex Court in the U.P. Cooperative
Federation Ltd. vs. Singh Consultants and Engineers Pvt. Ltd. And Dynepro Pvt. Ltd. vs. V. Nagarajan
[2019] ibclaw.in 24 NCLAT, and keeping in view the provisions of the Code, an irrevocable and
unconditional Bank Guarantee can be invoked even during moratorium period in view of the
amended provision under Section 14(3)(b) of the Code. We are conscious of the fact that the Bank
has not taken any steps with respect to the alleged fraud, if any, between IOCL and the Corporate
Debtor. The findings of the Hon’ble Arbitral Tribunal have also attained finality.

9. Adjudicating Authority being the appointing authority of IRP/RP was well

within its jurisdiction to pass an order for removal of a Resolution
Professional(RP) particularly in a situation where the RP has not taken any
steps to convene a meeting of CoC for the purposes of removal of RP
Case Name: Srigopal Choudary RP of Shree Ram Urban Infrastructure Ltd. Vs. SREI Equipment
Finance Ltd.
Case Citation: (2023) ibclaw.in 38 NCLAT
NCLAT held that the provision of Section 27 of the Code contemplates that the replacement of the
Resolution Professional can be done by the CoC alone. But if the ingredients of Section 27 of the
Code cannot be met i.e. in the event, the RP is not convening the meeting of CoC, which in turn has
to decide the replacement of the RP himself, the Adjudicating Authority, in order not to delay the
CIRP proceedings, on an application under Rule 11 of the NCLT Rules, 2016 has rightly invoked its
inherent jurisdiction and passed the impugned order.

10. Where asset size of a Financial Service Provider which on the date of filing
the application as per last Balance Sheet was more than Rs. 500 Crore and if it is
reduced from Rs. 500 Crore during the pendency of the application as per any
further audited Balance Sheet available, whether the Adjudicating Authority
shall lose jurisdiction?
Case Name: Shapoorji Pallonji Finance Pvt. Ltd Vs. Rekha Singh
Case Citation: (2023) ibclaw.in 57 NCLAT
In this important judgment on Financial Service Providers, NCLAT clarified various questions on
initiation of CIRP against Personal Guarantor of a Financial Service Provider:
(a) Whether the expression used in the Notification dated 18.11.2019 “asset size of Rs.500
crore or more” can be confined to the loan receivables only or asset shall include non-current
and current assets?
(b) Last Balance Sheet referred to in the Notification dated 18.11.2019 has to be treated as last
audited Balance Sheet from the date the application can be filed? and
(c) Where asset size of a Financial Service Provider which on the date of filing the application as per

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last Balance Sheet was more than Rs.500 Crore and if it is reduced from Rs.500 Crore during the
pendency of the application as per any further audited Balance Sheet available, whether the
Adjudicating Authority shall lose jurisdiction?

11. Whether even after attachment of the assets of the corporate debtor under
PMLA Act, the Successful Auction Purchaser is required to deposit the entire
sale amount and whether AA can order for refund of EMD and first installment
with interest
Case Name: Nitin Jain (Liquidator of PSL Ltd.) Vs. Lucky Holdings Pvt. Ltd. (Successful Auction
Bidder of PSL Ltd.)
Case Citation: (2023) ibclaw.in 53 NCLAT
The question to be answered is as to whether even after attachment of the assets of the corporate
debtor under PMLA Act on 02.12.2021, the auction purchaser was required to deposit the entire
sale amount. Before the Order of attachment was passed on 02.12.2021, no default can be said to
have committed by Auction Purchaser in depositing the amount since first installment was
deposited within time and the successful purchaser had 90 days time to deposit the balance
amount and before expiry of 90 days the assets of the corporate debtor were attached.
In view of the attachment of the assets of the corporate debtor on 02.12.2021, Liquidator can
neither complete the sale, can issue sale certificate nor can hand over the assets of the corporate
Debtor to the Successful Auction Purchaser and due to aforesaid event the Application was filed by
the Successful Auction Purchaser to withdraw from auction and for refund of the EMD. Even in a
case where Successful Auction Bid as going concern is not approved, Successful Auction Bidder is
not entitled for any Interest on the EMD and 1st Installment.

12. After adoption of Swiss Challenge Method to find out the best plan one
Resolution Applicant cannot be allowed to submit a Revised Resolution Plan
Case Name: Jindal Stainless Ltd. Vs. Mr. Shailendra Ajmera, RP of Mittal Corp Ltd. & Ors.
Case Citation: (2023) ibclaw.in 55 NCLAT
NCLAT set aside the impugned order of NCLT and held that there can be no fetter on the power of
the CoC to cancel or modify any negotiation with the Resolution Applicant including a Challenge
Process but it is the wisdom of the CoC to take a decision in that regard. CoC, in the facts of the
present case, did not take any decision to disregard the Challenge Process completed in 13th CoC
meeting held on 15.07.2022 and it decided to vote on the plan which voting process has begun.
Hon’ble Supreme Court judgment in Ngaitlang Dhar Vs. Panna Pragati Infrastructure Pvt. Ltd. & Ors.
(2021) ibclaw.in 175 SC fully supports the case of the Appellant that after adoption of Swiss
Challenge Method to find out the best plan one Resolution Applicant cannot be allowed to submit a
revised plan. It is well settled that the timeline in the IBC has its salutary value and it was the
wisdom of the CoC which decided to vote on the Resolution Plan after completion of Challenge
Process and not to proceed to take any further negotiation or further modification of the plan, that
decision ought not to have been interfered with.

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13. Legal Representatives (LRs) including widow of deceased Promoter/Director

of Corporate Debtor should be impleaded as a party in application under
Section 43, 45, 50 & 66 of the IBC for avoidance of transactions
Case Name: Arvind Garg Liquidator of Carnation Auto India Pvt. Ltd. Vs. Jagdish Khattar & Ors.
Case Citation: (2023) ibclaw.in 67 NCLAT
In this case, Counsel for the Promoter/Director of Corporate Debtor(Respondent No. 1) has argued
that widow of Respondent No. 1 should not be impleaded as LRs as she has no interest in this case.
She has also submitted that the Appellant has sought relief pertaining to Section 66 and 67, which is
a personal to the deceased Respondent No. 1.
NCLAT held that Legal Representatives is not defined in the Code. Therefore, reference could be
had to the definition provided to it in the Civil Procedure Code Section 2(11) and according to the
this, a person who in law represents the estate of a deceased person and the person who
intermeddles with the estate of the deceased are the LRs. The widow Ms. Kiran Khattar definitely
represent the estate of the deceased in view of the fact that she is in class I heir as per schedule-I of
Section 8 of the Hindu Succession Act, 1956 and insofar as Section 66 and 67 of the Code are
concerned, the impact of the said provision about the transfer of the estate arising out of the
fraudulent transaction is to be seen only after impleadment.

14. Default in settlement agreement is only a by-product which has permitted

revival of Section 7 application but in no manner affect the claim in the original
application which is financial debt under Section 7 application
Case Name: Vinay Gupta Vs. Ashika Credit Capital Ltd. & Anr.
Case Citation: (2023) ibclaw.in 74 NCLAT
Present is a case where application under Section 7 was filed by the Financial Creditor claiming its
financial debt. On said application, Corporate Debtor entered into settlement due to which the
application was withdrawn with liberty to revive if any default is committed. The revival of the
application under Section 7 was consequent to the liberty granted by the Court. When application
was revived, the application which was filed initially by the Financial Creditor was restored and
treated to be the original Section 7 application. It cannot be said that what is to be considered was
only the default under the settlement agreement.

15. NCLAT Order dated 24.12.2022 on computation of limitation period for

Appeal (limitation computed from the date of e-filing) is only prospective in
character and it is neither retroactive nor retrospective
Case Name: Sridhar Cherukuri Vs. Dr. G.V. Narasimha Rao
Case Citation: (2023) ibclaw.in 73 NCLAT
In this case, the impugned order was passed on 26.10.2022. The Petitioner / Appellant, had applied
for a certified copy of the impugned order dated 26.10.2022 and that the said copy, was made

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available to him only on 24.11.2022. The Petitioner /Appellant that the Appeal Paper Book was
uploaded in the E-filing Portal on 09.12.2022. The physical copies Appeal Paper Book(s) were
submitted on 12.12.2022, the next working day. The period of limitation for filing appeal including
15 days condonation came to an end on 10.12.2022, (Court holiday).
NCLAT held that placing of heavy reliance on the Circular dated 24.12.2022 (vide F. No. 23/4/2022 –
Estt./NCLAT), stating that the earlier Circular dated 21.10.2022 (vide F.No.10/37/2018-NCLAT) was
withdrawn and superseded by the latter Circular dated 24.12.2022, sans merits, all the more, when
the Circular dated 24.12.2022 is only prospective in character and it is neither retroactive nor
retrospective. As such, the contra plea, taken on behalf of the Appellant, is unworthy of acceptance,
and the same is negatived. In view of the Circular dated 21.10.2022 was in force and the same was
not annulled, varied or superseded and was alive and in existence, the falling back upon of Section
10 of the General Clauses Act, 1897, is nothing, but an exercise in futility, as held by this Tribunal,
against the Appellant.

16. If promoters are aggrieved on valuation of assets, treatment of

Secured/unsecured creditors etc., the course open for the promoters are to
approach Adjudicating Authority at the relevant time for challenging
Case Name: Rohit Jindal Vs. Fanendra Harakchand Munot RP of Shree Siddhi Vinayak Ispat Pvt. Ltd.
& Ors.
Case Citation: (2023) ibclaw.in 92 NCLAT
NCLAT held that the promoters if they were aggrieved by the valuation taken by the IRP/RP and the
valuation received before the CoC, the course open for the promoters was to approach the
Adjudicating Authority questioning the valuation at the relevant time when the question could have
been gone into and examined before Form-G was issued and Form-H has been submitted by the
Resolution Professional on the basis of the valuation undertaken in the process. At this stage,
appellant cannot be allowed to raise the question of valuation.

17. The mere fact that Resolution Professional has not filed the Application
although Settlement Agreement required his dues to be paid by the
Operational Creditor does no inhibit the Adjudicating Authority to exercise its
jurisdiction under Rule 11 of NCLT Rules, 2016
Case Name: Sandeep Kukkar Vs. Siddarth Intercrafts Pvt. Ltd.
Case Citation: (2023) ibclaw.in 97 NCLAT
NCLAT held that I.A. filed by the Suspended Director bringing on record Settlement Agreement and
praying for closure of the proceeding, the Adjudicating Authority ought to have considered the said
Application. The mere fact that Resolution Professional has not filed the Application although
Settlement Agreement required his dues to be paid by the Operational Creditor does no inhibit the
Adjudicating Authority to exercise its jurisdiction under Rule 11 of NCLT Rules, 2016.

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18. Whether IRP(became IRP after admission of the CIRP) who had served the
notice under Section 8 of the Code is a related party in terms of Section 5(24)(h)
of the Code?
Case Name: Nileshbhai Shantilal Patel Vs. Westin Resins and Ploymers Pvt. Ltd. & Anr.
Case Citation: (2023) ibclaw.in 91 NCLAT
NCLAT held that a close scrutiny of the Section 5(24)(h) would show, firstly, that it relates to the
Corporate Debtor and not to the Operational Creditor and secondly the Appellant was to lead
evidence that the Director, Partner or Manager was accustomed to act on the directions or
instructions of the said IP. Therefore, in our considered opinion, Section 5(24)(h) of the Code is not
at all applicable to the facts and circumstances of the present case and thus the arguments raised
in this regard, is hereby rejected. Since, we are dictating the order in the court, Sr. counsel for the
Appellant has then referred to Section 5(24-A)(h) of the Code to submit that the related party in
relation to an individual should also be looked into in regard to Section 5(24-A)(h). We have also
referred to that provision but the same is not applicable because the dispute is between two
corporate entities and not in respect of the individuals.

19. Whether assets of the subsidiary companies can be dealt with in Corporate
Insolvency Resolution Process of holding Company?
Case Name: Greater Noida Industrial Development Authority (GNIDA) Vs. Roma Unicon Designex
Consortium
Case Citation: (2023) ibclaw.in 90 NCLAT
The Scheme of the Code has referred the assets of the subsidiary, assets of any Indian or foreign
subsidiary of the Corporate Debtor. Thus, assets of the Corporate Debtor and assets of subsidiary
of the Corporate Debtor have been separately recognised and dealt with. Section 18, sub-section
(1), Explanation further clarifies the law when it says that assets shall include the assets, meaning
thereby assets of the Corporate Debtor, shall not include assets of any Indian subsidiary.
In the CIRP of Corporate Debtor, thus, assets of subsidiary Company, i.e., Earth Towne were not to
be taken into consideration or treated as the assets of the Corporate Debtor. As regards, the law
relating to resolution process of a corporate person is concerned, the law is concerned with assets
of the Corporate Debtor and its liabilities, so as to focus the resolution on the assets of the
Corporate Debtor. The natural corollary to the above provision is that the assets of the subsidiary
Company cannot be dealt with, in CIRP of a holding Company. Holding Company and subsidiary
Company have separate legal status and the assets of subsidiary Company cannot be taken into
consideration.

20. IBC Section 7 application cannot be rejected on the ground that certain
portion of sanction amount of financial facilities could not be disbursed by the
Financial Creditors
Case Name: State Bank of India Vs. N.S. Engineering Projects Pvt. Ltd.

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Case Citation: (2023) ibclaw.in 79 NCLAT

In the impugned order, the Adjudicating Authority held that when Financial Creditor, by its own acts
of omission and commission, contributes to the default on the part of the Corporate Debtor,
Application under Section 7 may not be admitted. Adjudicating Authority has based its decision of
rejecting Section 7 Application on the ground that the default committed by the Corporate Debtor
in restructuring its debt, there is contributory negligence by the State Bank of India as well as
Punjab National Bank.

21. The mere fact that instead of reviving company petition, a fresh company
petition has been filed under section 7 shall not be reason to reject the
company petition
Case Name: Priyal Kantilal Patel Vs. IREP Credit Capital Pvt. Ltd. & Anr.
Case Citation: (2023) ibclaw.in 86 NCLAT
NCLAT held that present is not a case where Section 7 Application has been filed only on the ground
of default in the settlement agreement rather section 7 application has been filed on the basis of
original financial debt which was extended by the Financial Creditor to the Corporate Debtor. The
mere fact that in earlier company petition, consent terms was arrived, which consent terms was
breached by the corporate debtor, the financial debt which was claimed by the financial creditor
would not be wiped out nor the nature and character of financial debt shall be changed on account
of breach of the consent terms. Permitting such interpretation shall be giving premium to the
corporate debtor who breach the consent terms.

22. A purposive interpretation of section 29A of IBC also permeates the

provisions of section 35(1)(f) of the IBC and, therefore, a similar prohibition is
applicable to a successful auction purchaser so that backdoor entry of
erstwhile management is not permissible
Case Name: Kanti Mohan Rustagi Vs. Redbrick Consulting Pvt. Ltd.
Case Citation: (2023) ibclaw.in 101 NCLAT
NCLAT held that in the judgment in Bank of Baroda v. MBL Infrastructures Ltd., the Hon’ble
Supreme Court has held that a ‘purposive interpretation’ of section 29-A is required when the
primary aim is to restart the corporate debtor, which is also the case in the present appeal since the
corporate debtor is being sold as a ‘going concern’. This judgment, in addition, also clarifies that the
management which has ran the company aground, because of which the company has gone into
insolvency resolution/liquidation, cannot be allowed to return in a new avatar as a resolution
applicant. This judgment also lays down that the erstwhile promoter of a corporate debtor has no
vested right to bid for the property of the corporate debtor in liquidation. Such a purposive
interpretation of section 29-A also permeates the provisions of section 35 (1)(f) of the IBC and,
therefore, a similar prohibition is applicable to a successful auction purchaser so that backdoor
entry of erstwhile management is not permissible.

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It also held that the successful auction purchaser Redbrick Consulting Pvt. Ltd. did not produce any
Udyam Registration Certificate when the e-auction of the corporate debtor as a ‘going concern’ took
place on 16.6.2021. The notification dated 26.6.2020 of the Ministry of Micro, Small and Medium
Enterprise was in existence on the date of e-auction, and therefore, it was incumbent upon the
successful auction purchaser Redbrick Consulting Pvt. Ltd. to have obtained and submitted such a
certificate to the liquidator to claim benefit under section 240-A.

23. In case of realisation of Security Interest u/s 52(1)(b) of IBC, whether a

Secured Creditor can charge interest till the date of realisation of sale proceeds
or he is confined to the amount of principal and interest as claimed in Form D
Case Name: DBS Bank India Ltd. Vs. Kuldeep Verma, Liquidator of Eastern Gases Ltd.
Case Citation: (2023) ibclaw.in 103 NCLAT
The question to be answered in this Appeal is as to whether in addition to the interest which was
claimed in the Form D by the Appellant whether he is also entitled to claim interest till the date
when sale proceeds were received by the Appellant/Bank.
NCLAT held that when a claim is filed in Form D where interest and principal have been included up
to the date of liquidation commencement date, claimants cannot be allowed to claim any further
amount in addition to the amount which they have claimed in their Form D. Permitting any claimant
to increase his claim on any ground or reason will not be in accordance with the liquidation scheme
as contemplated by the Liquidation Process, Regulations. When a statute provides for liquidation
commencement date as a date up to which claims can be filed and proved, no claim thereafter can
be entertained by the Liquidator.

24. Whether when an application is filed against a Personal Guarantor whether

another Lender of same transaction can proceed against the Personal
Guarantor by filing another application under Section 95 of IBC
Case Name: Bhavesh Gandhi Vs. Central Bank of India
Case Citation: (2023) ibclaw.in 112 NCLAT
NCLAT held that when an insolvency resolution process commences against the Personal
Guarantor all creditors of the Personal Guarantor are taken care of in the proceedings under
Chapter-III. The scheme of Code does not contemplate manifold applications against same Personal
Guarantor by different lenders. Multiplicity of applications against same Personal Guarantor is not
contemplated under Chapter III. When the insolvency resolution process commences against a
Personal Guarantor, claims of all creditors are taken care of under the scheme of the Code.
Further, it is held that creditors of the Personal Guarantors who are unable to file an application
due to enforcement of moratorium under Section 96 can very well avail the benefit of period during
which moratorium continues, hence, due to interim moratorium enforced by Section 96, the
creditors like Central Bank of India and other creditors are in no manner prejudiced. If they have
not filed any application during moratorium period, they have every right to file application and for
computation of the period of limitation, period during which moratorium is in place is to be

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excluded.

25. Once the Resolution Plan is approved by CoC, Financial Creditors are
estopped from seeking any Amendments/Modifications in the Information
Memorandum
Case Name: Gaurav Katiyar, RP of Earthcon Universal Infratech Pvt. Ltd. Vs. Nisus Finance and
Investment Managers LLP
Case Citation: (2023) ibclaw.in 96 NCLAT
In this important judgment, NCLAT held that any modification after approval of the CoC and
submission to the Adjudicating Authority, irrespective of the content of the terms envisaged by the
Resolution Plan, would only lead to further delay and defeat the very scope and objective of the
Code. Once the Resolution Plan is approved by the CoC, the Financial Creditors are estopped from
seeking any Amendments/Modifications in the Information Memorandum.

26. CIRP application under Section 9 of IBC is not maintainable in case of

principal amount has entirely been paid during the pendency of the application
and the issue is only regarding to interest outstanding
Case Name: Rohit Motawat Vs. Madhu Sharma Proprietor Hind Chem Corporation & Anr.
Case Citation: (2023) ibclaw.in 128 NCLAT
An application filed by Operational Creditor under Section 9 of the IBC for default of Rs. 15,10,151/-
(Principal amount Rs. 9,97,122 and Interest amount Rs. 5,13,029) has been admitted by Adjudicating
Authority and CIRP against Shubh Aluminium Pvt. Ltd.(Corporate Debtor) has been initiated. During
the pendency of this proceedings, the principal amount of Rs. 9,97,122/- was paid by the Appellant
by way of Cheque and Demand Draft dated 06.01.2021.

27. If Demand Notice issued u/s 8 of IBC is not replied, whether Corporate
Debtor can raise pre-existing dispute in reply to the petition filed under Section
9 of the IBC
Case Name: Greymatter Entertainment Pvt. Ltd. Vs. Pro Sportify Pvt. Ltd.
Case Citation: (2023) ibclaw.in 122 NCLAT
NCLAT held that it is observed from the Sections that neither Section 8 nor Section 9 of the Code
indicate that in event Reply to Notice was not filed within 10 days, the Corporate Debtor is
precluded from raising the question of dispute or pleading that there or no amount due and
payable, the Corporate Debtor is not prevented from establishing by way of a Reply and relevant
documents, any Pre-Existing Dispute or paid Operational Debt. We place reliance of the Judgement
of this Tribunal in M/s Brand Realty Services Ltd. Vs. M/s Sir John Bakeries India Pvt. Ltd. (2022)
ibclaw.in 245 NCLAT, where this has been considered in detail.

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28. Once a Resolution Plan approved & submitted to AA, CoC cannot turn
around and pray to Adjudicating Authority to send the Rplan back for
consideration and CoC cannot be allowed to change its view
Case Name: Express Resorts and Hotels Ltd. Vs. Amit Jain, RP, Neesa Leisure Ltd.
Case Citation: (2023) ibclaw.in 120 NCLAT
In this landmark judgment, NCLAT has cleared that when a Resolution Plan, has been approved
after due deliberations, in exercise of commercial wisdom of the CoC, it has to be accepted that
Corporate Debtor was decided to be revived by the Resolution Plan. The mere fact that certain
other offers have been received after the approval of the Resolution Plan, CoC cannot have a
change of heart and start clamoring before the Adjudicating Authority that they have no objection
to sending back the Resolution Plan for reconsideration. This will be permitting an unending
process, since by passing of time situation keeps on changing. After coming to know about the
financial offer in a Plan, which has been approved by the CoC, any subsequent offer by any entity,
who did not participate in the process earlier, cannot be entertained.

29. PF and Gratuity is to be paid in full as per the provisions of EPF and NP Act,
1952 and payment of Gratuity Act, 1972
Case Name: Mrs. C.G. Vijyalakshmi Vs. Shri Kumar Rajan, RP Hindustan Newsprint Ltd.
Case Citation: (2023) ibclaw.in 123 NCLAT
NCLAT held that having regard to the ratio of the Judgement in Jet Aircraft Maintenance Engineers
Welfare Association (2022) ibclaw.in 861 NCLAT of this Tribunal, upheld by the Hon’ble Apex Court,
this Tribunal is of the earnest view that PF and Gratuity is to be paid in full as per the provisions of
EPF and NP Act, 1952 and payment of Gratuity Act, 1972. Since admittedly the amounts paid are
only 35.13% having treated them as Secured Creditors, we are of the considered view that indeed
there was a violation of the provisions of Section 30(2) of the Code, with respect to the payment of
PF and Gratuity only.

30. Whether the decision of the CoC to replace the Resolution Professional
being the outcome of the wisdom of the CoC, is subject to judicial review?
Case Name: Venus India Asset-Finance Pvt. Ltd. Vs. Suresh Kumar Jain, RP of MK Overseas Pvt. Ltd.
Case Citation: (2023) ibclaw.in 121 NCLAT
NCLAT held that when the CoC contemplates change of Resolution Professional, the Adjudicating
Authority in terms of the statutory construct has to merely look into two basic check boxes which is
whether the CoC has resolved to that effect with 66% vote share and whether the proposed
Resolution Professional has given his written consent and not look at anything beyond. The
statutory framework of the IBC also does not mandate that the CoC is required to adduce reasons
for replacing the Resolution Professional.

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31. In what circumstances and conditions, Adjudicating Authority can send

back a Resolution Plan to CoC for carrying out changes?
Case Name: Noble Marine Metals Co WLL Vs. Kotak Mahindra Bank Ltd.
Case Citation: (2023) ibclaw.in 117 NCLAT
By the Impugned Order, the Adjudicating Authority remitted the Resolution Plan back to the CoC for
reconsideration in accordance with law. Present is a case where reconsideration is being asked only
with regard to clause which was included in the Resolution Plan relating to release of personal
guarantee of the promoters which according to Committee of Creditors is not in accordance with
law. The Adjudicating Authority has held that it is open to CoC to deliberate the Plan in accordance
with law which directions cannot be faulted with more so when the Resolution Applicant himself
consented before the Adjudicating Authority.
NCLAT held that the Adjudicating Authority if finds on given set of facts that parameters under
Section 30(2)(e) have not been kept in view, the Resolution Plan can be sent back to the CoC to
review such plan after satisfying the parameters. The above is the only situation provided by
Hon’ble Supreme Court where the plan can be sent back.

32. Once a claim is admitted and submitted by Liquidator to Adjudicating

Authority, he shall have no jurisdiction to reject or make any modification in
the claims
Case Name: Vijay Kumar Gupta Vs. Canara Bank
Case Citation: (2023) ibclaw.in 116 NCLAT
NCLAT held that there is no quarrel with the scheme provided under Section 38 to 42 of the Code
about consolidation of claims, verification, rejection of claims and the appeal against the decision of
the Liquidator but once the claim is admitted and submitted by the Liquidator to the Adjudicating
Authority, if he receives any information, then he shall have no jurisdiction to reject or make any
modification in the claims which has already been admitted in terms of Section 40 of the Code and
has to approach the Adjudicating Authority for the purpose of its modification which precisely has
been done in the present case by the Liquidator.

33. Income Tax dues are Government dues and is Secured Creditor under IBC
Case Name: Principal Commissioner of Income Tax Vs. M/s Assam Company India Ltd.
Case Citation: (2023) ibclaw.in 113 NCLAT
In this case, the Appellants, Principal Commissioner of Income Tax placed demand of Income Tax
for the Assessment Year 2013-14 & Assessment Year 2014-15 totaling to Rs. 16,20,25,953/- before
the Resolution Professional and the claim was filed by Income Tax Department. The Appellants
received as a full and final payment totalling to Rs. 1,20,23,691 which is not even 15% of the
outstanding demand.
NCLAT held that the judgment passed by the Hon’ble Supreme Court in the case of State Tax Officer

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(1) Vs. Rainbow Papers Limited (2022) ibclaw.in 107 SC, the dues of the Appellants are ‘Government
dues’ and they are Secured Creditors. Thus, the impugned order dated 10.02.2021 passed by the
Adjudicating Authority is hereby set aside and the matter is remitted back to the Adjudicating
Authority.

34. On account of failure of assignee to file application to continue the

proceeding, the application could not have been dismissed, the original
Financial Creditor could have continued the proceeding for the benefit of
assignee
Case Name: Surender Singh Vs. Yes Bank Ltd. & Anr.
Case Citation: (2023) ibclaw.in 131 NCLAT
In the present case we are considering the case where Section 7 Application was filed by the Yes
Bank where hearing took place before the Adjudicating Authority, the fact of assignment was
brought under notice and prayer was made to dismiss Section 7 Application. Application was
entertained by the Adjudicating Authority and notices were issued on 19.01.2023 fixing 21.12.2022
as the next date.
NCLAT held that the Application could have been continued and would not have been prejudicially
affected by reason of acquisition of the financial asset. Hon’ble Supreme Court in Sharadamma Vs.
Mohammed Pyrejan (Dead) on considering the aforesaid Rules had held that on account of failure
of assignee to file application to continue the proceeding, the application could not have been
dismissed, the original Applicant could have continued the proceeding for the benefit of assignee.

35. CIRP Regulations 35A is not mandatory and the requirement for
approaching the Adjudicating Authority for appropriate relief on or before
135th day of the Insolvency Commencement Date is only directory
Case Name: Jagdish Kumar Parulkar, RP of M/s Tayal Foods Pvt. Ltd. Vs. Vinod Agarwal Ex Director,
M/s Tayal Food Pvt. Ltd.
Case Citation: (2023) ibclaw.in 132 NCLAT
NCLAT held that it is commonsensical axiom that the time taken by a Resolution Professional to
determine an avoidance transaction is dependent on a multitude of factors, including availability of
information, co-operation from the erstwhile directors of the Corporate Debtor, cooperation from
parties to the avoidance transactions, analysis by the transaction auditor, etc. Such factors often
being outside the control of the Resolution Professional, there is therefore a distinct possibility of
delay in making a determination, beyond the timelines specified in the CIRP Regulations.

36. A cheque which has not been encashed cannot amount to an

acknowledgement of liability in terms of Section 18 of the Limitation Act, 1963
Case Name: M/s. Primee Silicones (Chennai) Pvt. Ltd. Vs. M/s. UCAL Fuel Systems Ltd.

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Case Citation: (2023) ibclaw.in 133 NCLAT

NCLAT held that for an Account to be termed a running Account it must be demonstrated that there
are debits and credits entries going on simultaneously or on a regular basis and the balances are
struck with some periodicity. It is also a settled proposition of law that a cheque which has not been
encashed cannot amount to an acknowledgement of liability in terms of Section 18 of the Limitation
Act, 1963. The emails relied upon by the appellant do not strictly construe an acknowledgement of
liability as provided for under Section 18 of the Limitation Act, 1963.

37. A CIRP application under Section 9 of IBC shall be maintainable without

service of Demand Notice under Section 8 where winding up proceeding was
transferred to NCLT u/s 434 of Companies Act, 2013
Case Name: Rajeev Srivastva Suspended Director of M/s Assotech Milan Resorts Pvt. Ltd. Vs.
Ahluwalia Contracts (India) Ltd.
Case Citation: (2023) ibclaw.in 136 NCLAT
In Sabari Inn Pvt. Ltd. Vs. Rameesh Associates Pvt. Ltd., Mosmetro Story (FZE) Vs. BASF India Ltd. &
Anr. and Mr. Shailendra Sharma Vs. Ercon Composites, it has been held by this Tribunal that even if
a winding up petition is transferred to the Adjudicating Authority for treating it as an application
filed under Section 9, it has to be preceded by a notice under Section 8 of the Code. The decisions
rendered in the aforesaid three cases have been doubted by a bench of the same strength by
recording reasons in its order dated 25.11.2022, therefore, it referred this matter to the larger
bench for considering again.
NCLAT held that after the transfer of winding up proceedings as per Rules 2016 read with
amendments made in Section 434 of the Act, 2013 as applicable to the Code by Act 26 of 2018, if
the winding up petition has been filed on the ground that the Company is unable to pay its debt, for
treating the application under Section 9 of the Code, notice under Section 8 of the Code is not
necessary or mandatory and a petition under Section 9 shall be maintainable without service of
notice under Section 8 of the Code.

38. NCLAT set aside an order in which NCLT dismissing Sec. 19(2) of IBC (non-
cooperation by suspended management) application imposed cost of
Rs.25,000/- on the RP
Case Name: Sanjai Kumar Gupta, RP of Stone India Ltd. Vs. Gouri Prasad Goenka
Case Citation: (2023) ibclaw.in 142 NCLAT
This Appeal has been filed by Resolution Professional of the Corporate Debtor against the order
dated 02.12.2022 passed by the NCLT, Kolkata Bench, Kolkata, by which IA filed by the RP under
Section 19(2) of IBC has been dismissed as infructuous. The Adjudicating Authority has also
imposed cost of Rs.25,000/- on the RP.
NCLAT held that the prosecution under Section 236 is a different aspect from running a CIRP as per
timeline prescribed in the IBC. The Adjudicating Authority passed several orders on

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IA(I.B.C.)/678(KB)2022, where Adjudicating Authority opined that Respondent No.1 is deliberately

not cooperating with the RP and is not complying with the directions issued by the Adjudicating
Authority. The Adjudicating Authority directed personal appearance of Respondent No.1 on
07.09.2022 and the same was again reiterated on 14.10.2022 when Adjudicating Authority noted
the non-cooperation of Respondent No.1, then suddenly how the Application has been rendered
infructuous and frivolous is not explained in the order dated 02.12.2022.

39. Shifting the entire blame on Resolution Professional on grounds of non-

performance of duty and making him the scapegoat does not appear to be
justified
Case Name: Shri Guru Containers Vs. Jitendra Palande
Case Citation: (2023) ibclaw.in 147 NCLAT
NCLAT held that though the scope of CIRP related work became limited and restricted by the fact
that progress got stonewalled due to lack of flow of information and lack of claims, diligence on the
part of the IRP in proceeding with the CIRP cannot be found to be wanting. Shifting the entire blame
on the IRP on grounds of non-performance of duty and making him the scapegoat does not appear
to be justified. It is equally important for the creditors to play a catalytic role in the insolvency
resolution process given the present regime of creditor-driven IBC. The rigours of similar standards
of discipline should also apply on the creditors.
This is clearly a case where the CIRP process was being hindered due to want of cooperation and
participation from the creditors. The conduct of the Operational Creditor in the present case is
deprecatory in that once the CIRP process had commenced, the Operational Creditor went into a
sleeping mode. This position has been further aggravated by the fact that it was the
Appellant/Operational Creditor who had triggered this judicial process and then abdicated himself
from all responsibilities. That the Operational Creditor did not seem interested in resolution of the
Corporate Debtor is evident from the fact that till date no claim has been filed with the IRP.

40. For establishing the fraudulent purpose under Section 66 of IBC, it must be
shown that the Ex-Directors of the Corporate Debtor knew that the Company
was insolvent but continued to run business with dishonest intentions
Case Name: Mr. Shibu Job Cheeran, Suspended Director of CD Vs. Mr. Ashok Velamur Seshadri,
Liquidator of M/s. Archana Motors Ltd.
Case Citation: (2023) ibclaw.in 158 NCLAT
NCLAT observes that the following elements need to be established for success of Section 66
Application, namely, (i) Business of the Corporate Debtor has been carried out with an intent to
defraud the creditors. (ii) Directors participated in carrying on business of the Corporate Debtor
despite knowing likely insolvency of the Corporate Debtor.

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41. There is no law which allows a third-party/shareholders to settle the claims

of Financial Creditor on behalf of the Corporate Debtor
Case Name: Nirej Vadakkedathu Paul Vs. Sunstar Hotels and Estates Pvt. Ltd.
Case Citation: (2023) ibclaw.in 152 NCLAT
NCLAT held that prima-facie there is no specific law which allows any shareholder of the Corporate
Debtor to challenge the admission of CIRP of the Corporate Debtor, once the debt due and default
is established by the Adjudicating Authority, in an application made by the Financial Creditor filed
under Section 7 of the IBC, 2016 before the Adjudicating Authority. Moreover, there is no law which
allows a third-party to settle the claims of the Financial Creditor on behalf of the Corporate Debtor,
more so without any consent of the Corporate Debtor and in the teeth of opposition by the
Financial Creditor. The Appellants could not produce any precedents in this regard. Theoretically,
even a person aggrieved by the impugned order challenges admission of CIRP, it is not going to
resolve the issues under any relevant law and the whole exercise with such appeal become futile,
purposeless and will only cause delay in resolution, for which the Resolution Plan has already been
approved by the Committee of Creditors and is under consideration of the Adjudicating Authority.

42. Fee of Resolution Professional from date of order of Liquidation to date of

appointment of liquidator
Case Name: Pankaj Khetan (Erstwhile RP of Kushal International Ltd.) Vs. Jammu & Kashmir Bank
Ltd.
Case Citation: (2023) ibclaw.in 155 NCLAT
It is the case of the Respondent that since no liquidator was appointed at the time of passing of
liquidation order, the Resolution Professional therefore continued in the position of Resolution
Professional, only technically, and hence he cannot be allowed to claim fees/expenses without
performing the obligatory duties of a liquidator. The application filed by the Resolution Professional
demanding payment of fee for the period 28.02.2019, being the date of order of liquidation, till
20.12.2021, being the date of appointment of liquidator, the Adjudicating Authority has reduced the
claimed amount.
NCLAT held that this was not in order since the fees of the Resolution Professional and that of a
liquidator cannot be equated as their duties are different and therefore the matrix for evaluating
the reasonability of their fees would also differ.
NCLAT concurred in the directions of the Adjudicating Authority as contained in the impugned
order with respect to the determination of the fees of the Resolution Professional; expenses
incurred by him on site visits; fees of the legal advisor and salary of the security guards and direct
that the same shall be paid by the CoC within ten days from the date of uploading of this order.
Further all the adverse observations made on the conduct of Resolution Professional in the
impugned order is expunged.

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43. In absence of an agreement between Financial Creditors and Corporate

Debtor, Financial Debt can be proved from other documents
Case Name: Mr. Pradeep Tayal, Director of Suspended Board M/s. Pytex Jewellers Pvt. Ltd. Vs. M/s.
Essbert Fashion Pvt. Ltd.
Case Citation: (2023) ibclaw.in 169 NCLAT
NCLAT held that it is true that deduction of TDS and deposit by the Corporate Debtor does not itself
prove that there is any financial debt but deduction of TDS and deposit in Form 16-A under Section
194-A of Income Tax Act clearly proves that the deduction which was deposited was TDS relating to
“Interest other than interest on securities”. Form 16-A which was filed by the Financial Creditor
along with Section 7 Application at least support the case of the Financial Creditors that loan which
was granted to the Corporate Debtor was with interest.
Further when we look into the definition of transaction as contained in Section 3(33) of the Code,
the definition is an inclusive definition and the provision does not lead to the conclusion that unless
there is written transaction between the parties incorporating the terms and conditions of the loan,
no transaction can come within the meaning of Section 5(8) of the Code. Financial Debt can be
proved from other documents as contemplated in Column 8 of Part-V of Form 1 of Insolvency and
Bankruptcy (Application to Adjudicating Authority) Rules, 2016 as noted above.

44. Case of part payment by a homebuyer for allotment of a flat and

subsequently CIRP (Insolvency) was initiated against the Corporate Debtor/Real
Estate Company
Case Name: Parveen Gakhar Vs. Adani Goodhomes Pvt. Ltd. & Anr.
Case Citation: (2023) ibclaw.in 163 NCLAT
In this case, the Appellant has booked a flat in the project of the Corporate Debtor and has made an
advance payment of Rs. 4,95,000/- and total amount paid by the Appellant is Rs. 5,27,500/-. The
notices were issued by the Corporate Debtor to the Appellant to make the balance amount. Last
such letter was issued on 27.09.2018 asking the Appellant to make payment of Rs. 21,84,377 and
Appellant did not make any payment in pursuance of the notice. Subsequently, the CIRP was
initiated on 30.04.2021 against the Corporate Debtor. There has been certain correspondence
between the Appellant and the Resolution Professional but ultimately the unit which was sought to
be claimed was included in the list of unsold units and subsequently the Resolution Plan has been
approved on 09.01.2023. The Application was filed by the Appellant seeking direction to the
Resolution Professional to register the agreement for sale in respect of the Flat which application
has been rejected.

45. Explanation of Section 14(1)(d) of the Code is not applicable on lease rent
and premium amount
Case Name: Sunil Kumar Agrawal RP, GSS Procon Pvt. Ltd. Vs. New Okhla Industrial Development
Authority

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Case Citation: (2023) ibclaw.in 168 NCLAT

NCLAT held that Section 14 of the Code deals with the moratorium and Section 14(1)(d) of the Code
says that there would be a prohibition from the recovery of any property by an owner or lessor
where such property is occupied by or in the possession of the Corporate Debtor. However,
explanation appended to Section 14(1) (d) says that with the prohibition of recovery of any property
by an owner or lessor, a license, permit, registration, quota, concession, clearance or a similar grant
or right either given by the Central Govt., State Govt. local authority, sectoral regulator or any other
authority constituted under any other law for the time being in force, shall not be suspended or
terminated on the grounds of insolvency but there would be a condition for its continuation if there
is no default in payment of the dues of such license, permit, registration, quota, concession,
clearance or a similar grant or right during the moratorium period. The similar grant or right has to
be read in respect of the licence, permit, registration, quota, concession, clearance but it cannot be
read as the premium amount or lease rent which has been so ordered by the Adjudicating
Authority to be paid by the Appellant to the Respondent.

46. Even after completion of Challenge Mechanism under CIRP Regulation

39(1A)(b), the CoC retain its jurisdiction to negotiate with one or other
Resolution Applicants, or to annul the Resolution Process and embark on to re-
issue RFRP
Case Name: Vistra ITCL (India) Ltd. Vs. Torrent Investments Pvt. Ltd. & Ors.
Case Citation: (2023) ibclaw.in 161 NCLAT
In this landmark judgment, NCLAT has interpreted CIRP Regulation 39 with questions such as
(i) Whether Regulation 39(1A) contains an implied prohibition on the jurisdiction of the CoC to
enter into any further negotiations with Resolution Applicant or to further ask a Resolution
Applicant to increase its Resolution Plan value,
(ii) Whether the Regulation 39(1A) has taken place of the negotiation process and it forecloses
any negotiation by CoC with Resolution Applicant
(iii) authorisation of authorised representative to file a appeal etc.
NCLAT has concluded that even after completion of Challenge Mechanism under Regulation
39(1A)(b), the CoC retain its jurisdiction to negotiate with one or other Resolution Applicants, or to
annul the Resolution Process and embark on to re-issue RFRP. Regulation 39(1A) cannot be read as
a fetter on the powers of the CoC to discuss and deliberate and take further steps of negotiations
with the Resolution Applicants, which resolutions are received after completion of Challenge
Mechanism.

47. If an applicant is not in a position to satisfy on the point of just and

equitable ground, the tribunal may refuse to make an order for winding up

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under Section 271(e) of the Companies Act, 2013

Case Name: Rajesh Agrawal Vs. Premier Proteins Ltd.
Case Citation: (2023) ibclaw.in 175 NCLAT
NCLAT affirmed decision of NCLT and held that sub-section (2) of Section 273 clearly indicates that if
such petition is filed i.e. petition filed under Section 271(e) read with Section 272 (1)(b) of the New
Act, onus is on the applicant to satisfy that there is just and equitable ground for winding up of a
company. Meaning thereby that if an applicant is not in a position to satisfy on the point of just and
equitable ground, the tribunal may refuse to make an order for winding up.

48. Moratorium under Section 14 of IBC does not affect the provisional
attachment order passed under the Prohibition of Benami Property
Transactions Act, 1988 and the attachment cannot be a subject matter of
proceedings under Section 60(5) of IBC
Case Name: Mr. P. Eswaramoorthy Liquidator of M/s. Senthil Papers and Boards Pvt. Ltd. Vs. The
Deputy Commissioner of Income Tax (Benami Prohibition)
Case Citation: (2023) ibclaw.in 179 NCLAT
NCLAT held that the attachment made as per Section 24(3) of The Prohibition of Benami Property
Transactions Act, 1988 cannot be a subject matter of proceedings under Section 60(5) of the IBC,
2016. One cannot fall back upon Section 60(5) of the IBC, 2016, for seeking remedy, concerning the
matter, relating to the Prohibition of Benami Property Transactions Act, 1988. A Moratorium, under
Section 14 of the IBC, 2016, does not affect the Provisional Attachment Order, passed under The
Prohibition of Benami Property Transactions Act, 1988. The object of the Act 1988, is to Prohibit the
Benami Transactions, and the right to redeem / recover, the Property, held Benami, for matters
connected therewith or incidental thereto. A closure scrutiny of The Prohibition of Benami Property
Transactions Act, 1988 and the I & B Code, 2016, clearly exhibit that they do operate in their own
field and without any simmering doubt, this Tribunal, without any haziness, holds that an element
of public interest, is involved in PBPT Act. To put it precisely, issues/disputes, pertaining to an
Attachment, effected under The Prohibition of Benami Property Transactions Act, 1988, cannot be
gone into, by an Adjudicating Authority (Tribunal), under the I & B Code, 2016. In short, the
Appellant / Liquidator, cannot take umbrage, either under the ingredients of Section 32A, coupled
with Section 60(5) of the I & B Code, 2016.

49. There is no power to enjoin upon NCLAT to condone even a single day
beyond the condonable period prescribed as per Section 61 of the Insolvency
and Bankruptcy Code, 2016
Case Name: Employees Provident Fund Organisation Vs. Nethi Mallikarjuna Setty
Case Citation: (2023) ibclaw.in 182 NCLAT
NCLAT held that in view of the clear-cut position of Section 61(1) of the Insolvency and Bankruptcy

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Code coupled with 150 of the NLCT Rules, this Tribunal is of the considered opinion that the delay
of 289 days as afforded by the Petitioner/Appellant from 10.03.2022 to 23.12.2022 in filing the
instant Company Appeal cannot be condoned as there is no power to enjoin upon this Appellate
Tribunal to condone not even a single day beyond the condonable period prescribed as per Section
61 of the Insolvency and Bankruptcy Code, 2016.

50. The negligence on the part of Corporate Debtor not to have executed lease
deed cannot be allowed to become a ruse for fraudulent transaction u/s 43, 49
and 66 of IBC
Case Name: Jagdish Kumar Parulkar, Liquidator for Kapil Steels Ltd. Vs. M/s Indore Steel & Alloys
Pvt. Ltd.
Case Citation: (2023) ibclaw.in 198 NCLAT
The contention of the Liquidator that the ex-management by not getting the name changed in the
lease deed in favour of the Corporate Debtor in 2010 used this fact as a loophole to transfer the
leasehold rights in favour of Respondent No.1 and that this amounts to conducting fraudulent
transaction.
NCLAT held that the negligence on the part of the Corporate Debtor not to have executed the lease
deed cannot be overlooked and cannot be allowed to become a ruse for fraudulent transaction.
Mere possibility of a potential collusion without material on record is not sufficient to persuade this
Bench to record any finding on preferential or fraudulent transaction. Liquidators under the IBC are
assigned by the Court and are undisputedly vested with sufficient authority to take into custody or
control all assets, property, effects and actionable claims of the Corporate Debtor and also collect
outstanding receivables including paying off bills and outstanding debts. This includes the authority
to commence investigations into the Corporate Debtor’s financial affairs for determination of
preferential and undervalued transaction as envisaged under Section 35(1)(ℓ) of IBC. The Liquidator
has therefore a fiduciary and legal responsibility to the Corporate Debtor, the creditors and the
Court.

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