Page 6 - Nclat

Frequent breach of timelines leading to more liquidations under IBC: ICRA

Banks have had to take a haircut of over two-thirds in the corporate insolvency cases being resolved through the bankruptcy courts, a report said on Wednesday. In over 71 per cent of the cases, the 270-day timeline is getting exceeded, the report by rating agency Icra said, adding that this is resulting in a higher number of liquidation orders as the elongated process erodes value. "'Lenders continue to face steep haircuts or reduction in loan amounts of nearly 72 per cent in Q2 FY2025 as the overall resolution process continues to face material delays emerging from litigations from either promoters or dissenting creditors," the agency's group head for structured finance ratings Abhishek Dafria said. He added that 71 per cent of the ongoing corporate insolvency resolution processes (CIRPs) had exceeded 270 days, post-admission by the NCLT. "The elongated process results in further erosion of the corporate debtor, which has also resulted in a high share (44 per cent) of CIRPs being

NCLAT directs IL&FS to complete resolution of remaining firms by March 31

The Insolvency appellate tribunal has directed the debt-ridden IL&FS group to complete the resolution of the remaining 58 firms by March 31, 2025 and has extended the moratorium until the date. A two-member bench observed that the resolution process for the remaining 58 entities is at an advanced stage and "considerable progress has been made by IL&FS (Infrastructure Leasing and Financial Services), which is pairing debts through asset resolution and other mechanisms. "We, thus, for the time being, are of the view that a direction needs to be issued to IL&FS and a new board to complete the resolution process of 58 entities as captured in paragraph 24 of the affidavit by March 31, 2025," said NCLAT in an order passed on Tuesday. NCLAT also directed IL&FS to take "appropriate steps" before the National Company Law Tribunal (NCLT) to close the process. Earlier, on August 28, 2024, the National Company Law Appellate Tribunal (NCLAT) questioned the continuation of the ...

Vacancies in company law tribunals hinder insolvency resolutions: SC

The NCLT currently operates with 43 members out of its authorised strength of 63. Legal experts believe that if the NCLT had been at full capacity, Jet Airways might have had a chance at revival

SC orders liquidation of Jet Airways, rejects NCLAT's approval of takeover

The Supreme Court has directed the liquidation of Jet Airways, citing the failure of the Jalan-Kalrock Consortium to meet revival conditions, overturning the NCLAT's approval

NCLAT rejects travel agents' plea alleging govt anti-competitive practices

The NCLAT on Friday upheld a CCI order that rejected a plea by the Travel Agents Association of India (TAAI) alleging anti-competitive practise by the government by exclusively using the services of their own agencies. A three-member bench also imposed a cost of Rs 5 lakh, observing that Government of India cannot be considered as an enterprise. The case pertains to a direction issued by the Department of Expenditure(DoE) in March 2006 to all government officials, including employees of PSU units to exclusively utilise the services of either Balmer Lawrie & Co or Ashok Travels and Tours. Balmer Lawrie & Co is a company under Ministry of Petroleum & Natural Gas while Ashok Travels and Tours is a division of state-owned India Tourism Development Corporation. Terming the directive anti-competitive, TAAI approached CCI alleging that it has restricted the market access for travel agent services for booking air tickets for the last 14 years and adversely impacted the benefits ..

Supreme Court sets aside NCLAT order halting Byju's insolvency proceedings

With this, Byju Raveendran and his brother Riju Raveendran have again lost control over Think and Learn Pvt Ltd or Byju's

Byju's in trouble again as SC scraps NCLAT ruling on insolvency proceedings

A bench led by Chief Justice DY Chandrachud revoked the NCLAT's approval of Byju's settlement of Rs 158.9 cr in outstanding dues to the BCCI

NCLAT upholds order to allow govt to takeover Delhi Gymkhana Club's mgmt

Appellate tribunal NCLAT has upheld an order to allow the central government to take over the management of the prestigious Delhi Gymkhana Club. The National Company Law Appellate Tribunal (NCLAT) set aside the petition filed by the erstwhile management members against the order passed by the Principal Bench of the NCLT. On April 1, 2024, the NCLT allowed the plea filed by the Ministry of Corporate Affairs for taking over the Delhi Gymkhana Club management citing "violations" of the Company Law and said there was "sufficient material" for holding that, as it is a case of mismanagement. In its 149-page order, the NCLT had also allowed the ministry to nominate 15 persons as directors on the club's general committee as well as manage the affairs of the club. The said order was challenged before the appellate tribunal, which has been now upheld on Monday by a two-member bench, comprising Chairperson Ashok Bhushan and Member Arun Baroka. However, the NCLAT bench also also directed the

NCLAT closes proceedings against JHL as Max Healthcare settles claims

The National Company Law Appellate Tribunal (NCLAT) has closed the insolvency proceedings against Jaypee Healthcare after the financial creditors' dues were settled by Max Healthcare. The appellate tribunal's direction to close the Corporate Insolvency Resolution Process (CIRP) against Jaypee Healthcare Ltd (JHL) came after the financial creditor submitted that they had received the amount of Rs 1,035.29 crore as part of the settlement and no claim had survived. "In view of the fact that the entire claim has now been satisfied and the amount deposited has been disbursed, we see no reason to continue the CIRP any further," said the NCLAT order passed on Thursday. CIRP against JHL was initiated by the Allahabad bench of the National Company Law Tribunal (NCLT) on June 14 this year, over a petition filed by its lead creditor JC Flowers Asset Reconstruction Ltd. This was challenged by the Manoj Gaur-led parent group firm Jaypee Infratech Ltd (JAL) before the appellate tribunal ...

Supreme Court reserves verdict on plea against NCLAT order on Jet Airways

The Supreme Court on Wednesday reserved its judgement on a plea of State Bank of India and other creditors challenging the National Company Law Appellate Tribunal (NCLAT) decision that upheld the resolution plan of grounded air carrier Jet Airways and approved the transfer of its ownership to Jalan Kalrock Consortium (JKC). A bench comprising Chief Justice of India D Y Chandrachud and Justices JB Pardiwala and Manoj Misra heard submissions of Additional Solicitor General (ASG) N Venkatraman, appearing for the appellant banks and others, and senior advocate Mukul Rohatgi, representing the consortium, before reserving the judgement. The NCLAT had on March 12 upheld the resolution plan of the grounded air carrier and approved the transfer of its ownership to the JKC. The appellate tribunal further directed the Jet Airways monitoring committee to complete the transfer of ownership within 90 days. Besides, the insolvency the NCLAT had also directed the lenders of Jet Airways to adjust th

NCLT directs initiation of insolvency proceedings against Syska LED Lights

The National Company Law Tribunal (NCLT) has has directed to initiate insolvency proceedings against Syska LED Lights, admitting the plea filed by its operational creditor -- Sunstar Industries. Syska LED Lights, part of Pune-based SSK Group, operates in segments such as LED lights, personal care appliances, mobile accessories, home appliances, and smart watches. The Mumbai bench of NCLT admitted the plea filed by Sunstar Industries, claiming total dues of Rs 7.70 crore and has appointed Debashis Nanda as the interim resolution professional suspending the board of Syska LED Lights, as per the provisions of the Insolvency & Bankruptcy Code (IBC). It rejected Syska LED Lights' claims of a pre-existing dispute and said the e-mail exchanged between parties establishes its liability towards its operational creditor. "We are of the considered view that the applicant has been able to establish the existence of operational debt and its default on the part of the corporate debtor and ...

NCLAT okays Sarda Energy's Rs 1,950 crore bid for SKS Power Generation

It stated that, according to the Supreme Court, there should be minimal interference in the commercial decision of the committee of creditors

NCLAT grants two weeks time for Supertech Township's settlement proposal

The Insolvency appellate tribunal NCLAT has granted two weeks more time to debt-ridden realty firm Supertech Township Projects suspended director Ram Kishore Arora to circulate the settlement proposal to both its lenders and home buyers. The National Company Law Appellate Tribunal (NCLAT) also suggested the realty firm facing insolvency proceedings to publish the settlement proposal on its website so that it can be accessed by all concerned stakeholders. "In view of the fact that Appellant is circulating a proposal for resolution of the project to the bank as well as to the homebuyers, we grant two weeks opportunity to the Appellant to complete the proposal and circulate it to the bank as well as to all the homebuyers," said a three-member NCLAT bench. The bench further said, "On the next date, we will consider whether the proposal submitted deserves to be accepted or not after hearing counsel for the lenders as well as the homebuyers who have filed applications in the appeal. Any .

NCLAT gives go-ahead to IECCL resolution, delinks with other IL&FS cos

The NCLAT on Thursday gave a go-ahead to the insolvency resolution of IL&FS Engineering and Construction Company Limited (IECCL) and delinked it with the other listed loss-making companies of debt-ridden IL&FS. However, the National Company Law Appellate Tribunal (NCLAT) also clarified that ICICI-led consortium, which is opposing the IECCL resolution, would have the liberty to press for its "objection on the extinguishment of its entire debt, or mere payment of 42.25 per cent shareholding of IECCL in the ongoing resolution process." IL&FS, which owns 42.25 per cent of IECCL, is selling a stake in the company and has invited bids under the Swiss Challenge method. It has received a binding bid from a prospective buyer and voting by lenders is expected to be completed by September 30, 2024. The consortium led by ICICI has opposed the proposal before the NCLAT, where IL&FS has filed an application seeking its permission to sell its stake with a "haircut" and without ...

Byju's insolvency case: SC reserves verdict on plea challenging NCLAT order

The Supreme Court on Thursday reserved its verdict on a plea of a US firm against the NCLAT order stopping insolvency proceedings against ed-tech firm Byju's. A bench headed by Chief Justice D Y Chandrachud asked the insolvency resolution professional (IRP) to maintain status quo till the apex court delivers its judgement in the matter. The bench, also comprising Justices JB Pardiwala and Manoj Misra, considered the plea of US firm Glas Trust Company LLC and asked the IRP not to proceed with the committee of creditor's meeting to deal with the Byju's case. While hearing the matter on Wednesday, the top court had questioned the verdict of insolvency appellate tribunal NCLAT setting aside the insolvency proceedings against Byju's and approving its Rs 158.9 crore dues settlement with the BCCI. Observing that the National Company Law Appellate Tribunal (NCLAT) did not apply its mind while closing the insolvency proceedings against the ed-tech major, the bench had hinted that it may sen

NCLAT did not apply its mind in edtech firm Byju's case: Supreme Court

Indicates sending matter back to appellate tribunal to hear it afresh

NCLAT directs Vadilal Enterprises, Vadilal Int'l to keep boards status quo

The appellate tribunal NCLAT has directed Vadilal Enterprises and Vadilal International to maintain the status quo of the structure of their boards until further orders. Passing an interim order, a two-member NCLAT bench said it has already listed the appeal for final hearing on September 26, 2024, over a dispute of the Vadilal Gandhi family, hence any change in the board structure would further complicate the issues. "Considering the fact that on August 6, 2024, we have already passed an order not to precipitate the matter and hence the removal of a director and an appointment of a new one would further complicate the issues involved when we have already set the appeal for final hearing the matter being listed on September 26, 2024," the NCLAT said. "In the circumstances, the status quo be maintained qua the directorship(s) of the companies involved till further orders." The National Company Law Appellate Tribunal (NCLAT) order came over a petition filed by Rajesh R Gandhi. He ha

NCLAT junks plea of Liberty Shoes' former CEO seeking ease of norms

Appellate tribunal NCLAT has dismissed the petition of Adesh Kumar Gupta, former CEO and Executive Director of Liberty Shoes, seeking an exemption from minimum shareholding norm to file a case of oppression and mismanagement against the company. Gupta has 5.83 per cent shareholding in Liberty Shoes. He was removed as an executive director of Liberty Shoes on September 30, 2023 and ceased to be the chief executive officer (CEO) of the company. However, the company informed the stock exchange about his removal from the board on November 21, a day after the Chandigarh bench of the National Company Law Tribunal (NCLT), on November 20 last year, dismissed his earlier plea. Gupta then moved NCLAT and sought a waiver under section 244 of the Companies Act in order to file a petition under Section 241, alleging oppression and mismanagement against him by the majority promoter block on the board. As per norms, a plea alleging oppression and mismanagement under Section 241 should be backed

NCLAT directs distribution of ITNL entity's lenders, to pay 75% to BKEL

The National Company Law Appellate Tribunal (NCLAT) has ordered an interim payment of 75 per cent of the total amount deposited in an escrow account to lenders of Baleshwar Kharagpur Expressway Limited (BKEL), promoted by IL&FS Transportation Networks Ltd (ITNL). Passing an order over the plea filed by the State Bank of India, NCLAT said it failed to see any reasonable grounds for not taking any decision by the Board for an interim distribution, as per the Concession Agreement and the Escrow Agreement. "Interim distribution shall be made to the lenders of 75 per cent of the amount lying in the escrow account as per the Escrow Agreement," said NCLAT in its order. The balance amount is to be used for operations, maintenance and other payments. However, it added: "Lenders shall also give an undertaking for a refund of the amount received, in the event ultimately, it is found that they were not entitled to the extent of the amount received by them." SBI had requested the NCLAT to ...

NCLAT rejects tax claim against RCom after initiation of insolvency

The NCLAT has set aside a petition filed by the state tax department claiming dues from Reliance Communications (RCom) observing that it was based on the assessment made after the initiation of insolvency resolution process against the debt-ridden firm. A two-member NCLAT bench upheld the earlier order passed by the Mumbai bench of the National Company Law Tribunal (NCLT), which had rejected the state tax department's second claim of Rs 6.10 crore. Corporate Insolvency Resolution Process (CIRP) against RCom was initiated on June 22, 2019. The state tax department had filed two claims. The first claim was filed on July 24, 2019 for Rs 94.97 lakh and a second claim was filed on November 15, 2021 for Rs 6.10 crore, which arose out of an assessment order dated August 30, 2021. The NCLT had admitted the first claim, which was passed before the initiation of CIRP. However, it did not accept the claim which was based on an assessment order passed in 2021. The Committee of Creditors (CoC