'Very Unfortunate' : Supreme Court Flags NCLT Delay In Approving Resolution Plan, Calls For Nationwide Report

In an important development, the Supreme Court has expressed serious concern over prolonged delays in approval of resolution plans by the National Company Law Tribunal (NCLT), calling out a case where a plan has remained pending for nearly two years. A bench of Justice JB Pardiwala and Justice KV Viswanathan directed both the NCLT Principal Bench, New Delhi and the Insolvency and...

IBC | NCLT Not To Examine If 'Pre-Existing Dispute' Will Succeed While Considering S.9 Application Of Operational Creditor : Supreme Court

The Supreme Court has reiterated that it is impermissible for the adjudicating authority under the Insolvency & Bankruptcy Code to examine the merits of the dispute while considering an application for CIRP under Section 9 by an operational creditor. It added that once the authority is satisfied that there exists a plausible pre-existing dispute, the Section 9 application would...

Multi-State Co-Operative Societies Barred From Investing Outside Their 'Same Line Of Business' : Supreme Court

The Court upheld the rejection of resolution plan submitted by a mult-state cooperative society.

IBC | After Moratorium, Creditor Cannot Appropriate Pre-CIRP Dues From Earlier Security Deposit Made By Corporate Debtor : Supreme Court

The Supreme Court has observed that once a moratorium is imposed, a corporate debtor's pre-CIRP dues cannot be set off against a deposit held by the creditor. The Court held that until such deposit is lawfully adjusted, it continues to remain the property of the corporate debtor, and any appropriation after the moratorium would be impermissible in law. “The deposit made even if treated as...

IBC | Primacy Of Commercial Wisdom Doesn't Mean Every Decision Of CoC Will Be Immune From Judicial Scrutiny : Supreme Court

The Supreme Court has underscored that while the commercial wisdom of the Committee of Creditors remains paramount, it is not immune from judicial scrutiny where issues of statutory illegality or jurisdictional error arise. “…it is necessary to state that primacy of commercial wisdom does not mean that every action taken in the insolvency process is altogether immune from scrutiny in...

Set-Off Can Be Raised As Defence Against Corporate Debtor Though Resolution Plan Bars Future Settlements : Supreme Court

The Supreme Court has held that while claims not included in an approved resolution plan under the Insolvency and Bankruptcy Code, 2016 stand extinguished, a limited plea of set-off can still be raised as a defence in arbitral proceedings, provided it does not result in any affirmative recovery.A bench of Justice Dipankar Datta and Justice Augustine George Masih partly allowed an appeal filed...

NCLAT Order Not Invalid Merely Because Bench Had Majority Technical Members : Supreme Court

The Supreme Court has held that an order of the National Company Law Appellate Tribunal (NCLAT) cannot be treated as illegal merely because the bench deciding the case had a majority of technical members. The Court clarified that the present statutory framework governing the tribunal system does not mandate that judicial members must outnumber technical members in NCLAT benches.A bench...

IBC | Supreme Court Cautions Against Excessive Judicial Review, Criticises Trend Of Unsuccessful Bidders Seeking To Reopen CoC Decision

The Supreme Court today criticised growing trend of unsuccessful resolution applicants converting challenging almost every commercial decision of the Committee of Creditors under the guise of procedural impropriety and turning the insolvency process into a protracted adversarial contest.“The appeals before us typify the growing strategic use of the judicial system by unsuccessful...

IBC Permits Parallel CIRP Against Debtor & Guarantor For Same Debt : Supreme Court

The Supreme Court on Thursday (February 26) observed that there's no bar under the Insolvency and Bankruptcy Code to initiate simultaneous CIRP against the corporate debtor and guarantor for the same debt. The bench of Justices Dipankar Datta and Augustine George Masih endorsed the findings of BRS Ventures Investments Ltd. v. SREI Infrastructure Finance Ltd. & Anr that "consistent with...

IBC | Mere Pendency Of Restructuring Arrangements Cannot Stall CIRP : Supreme Court

The Supreme Court on Tuesday (February 24) has observed that merely because an arrangement of restructuring a debt-laden corporate debtor is in place, would not bar initiation of a CIRP under the Insolvency and Bankruptcy Code. A bench of Justices Sanjay Kumar and K Vinod Chandran set aside the NCLAT's decision, which had rejected a Section 7 IBC application on the premise that a...

IBC | Defunct Scheme Of Arrangement Under Companies Act Cannot Stall Corporate Insolvency Resolution Process : Supreme Court

The Supreme Court on Tuesday (February 24) held that a defunct Scheme of Arrangement under the Companies Act cannot stall the Corporate Insolvency Resolution Process proceedings under the Insolvency & Bankruptcy Code, 2016. A bench of Justices Sanjay Kumar and K Vinod Chandran set aside the NCLAT's decision, which had kept in abeyance the CIRP initiated under Section 7 of IBC against...

S.7 IBC | Corporate Debtor's Ability To Pay Debt Not To Be Considered Before Admitting Insolvency Petition : Supreme Court

If debt and default are established, then Section 7 application must be admitted.