NCLT - The Legal Chamber

Verified Claim is Key: Supreme Court Distinguishes Between Timely and Belated Homebuyers in Insolvency

16Oct

By The Legal ChamberNo Comments

Supreme Court

Verified Claim is Key: Supreme Court Distinguishes Between Timely and Belated Homebuyers in Insolvency

The Supreme Court held that a homebuyer's claim, once verified and admitted by the Resolution Professional and reflected in the list of creditors, must be honoured as per the plan's provisions for verified claims. It cannot be relegated to a residuary clause meant for belated or unverified claims, as this would misapply the approved resolution plan. Facts Of The Case: The appellants, residents of Bengaluru, booked an apartment in 2010 in the 'IREO Rise (Gardenia)' project developed by M/s Puma Realtors Private Limited. They executed an Apartment Buyer’s Agreement in 2011 and paid Rs. 57,56,684 out of the total consideration of Rs. 60,06,368. The Corporate Debtor failed to deliver possession by the agreed date of November 2013. The appellants initially filed a consumer complaint, which wa...

Supreme Court Ruling: Fraudulent Share Transfer Struck Down: Key Takeaways from the Satori Global Judgement

9Oct

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Ruling: Fraudulent Share Transfer Struck Down: Key Takeaways from the Satori Global Judgement

The Supreme Court ruled that the NCLT has wide jurisdiction under Sections 397 and 398 of the Companies Act, 1956, to adjudicate on allegations of fraud, oppression, and mismanagement when integral to the complaint. It upheld that acts violating the Articles of Association and statutory provisions, including invalid share transfers and board meetings, constitute oppression, empowering the Tribunal to grant comprehensive relief. Facts Of The Case: The case involves Mrs. Shailja Krishna, a majority shareholder holding over 98% of a private company, and her husband, Mr. Ved Krishna. In December 2010, during a strained marital relationship, Mrs. Krishna allegedly resigned from her directorship and executed a gift deed transferring her entire shareholding to her mother-in-law. She contended s...

Supreme Court Ruling: No Certified Copy, No Appeal – NCLAT’s Order Set Aside on Technical Ground

15Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Ruling: No Certified Copy, No Appeal – NCLAT’s Order Set Aside on Technical Ground

The Supreme Court held that an appeal against an NCLT order under the IBC must be filed within 30 days from the date of its pronouncement. It reiterated that mandatory filing of a certified copy of the impugned order is integral to a valid appeal, and non-compliance renders the appeal barred by limitation. Facts Of The Case: The case originated from an order dated June 23, 2023, passed by the National Company Law Tribunal (NCLT), Mumbai Bench, which approved a resolution plan submitted by Ashdan Properties Pvt. Ltd. in the corporate insolvency resolution process of the corporate debtor. The respondent, DSK Global Education and Research Pvt. Ltd., being aggrieved by this order, filed an appeal before the National Company Law Appellate Tribunal (NCLAT) challenging the NCLT's decision. The ...

Supreme Court Quashes FIR in Loan Case, Says Mere Default Doesn’t Make It a Crime

13Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Quashes FIR in Loan Case, Says Mere Default Doesn’t Make It a Crime

The Supreme Court held that a loan transaction creates a debtor-creditor relationship, and a mere breach of its terms does not automatically constitute criminal breach of trust under Section 405 IPC without evidence of dishonest intention. The Court clarified that such disputes, arising from commercial transactions, are primarily civil in nature and a preliminary inquiry is permissible before registering an FIR. Facts Of The Case: The appellant, a director of M/s Benlon India Ltd., availed three loans from the first respondent, Hero Fincorp, for purchasing machinery. While the first two loans were used for the intended purpose, a fire destroyed the plant shortly after the disbursement of the third loan. Consequently, this third loan was converted into an unsecured corporate loan. Benlon ...

Supreme Court Rules Property Can Be Returned During Insolvency If Not Needed

6Sep

By The Legal ChamberNo Comments

Supreme Court

Supreme Court Rules Property Can Be Returned During Insolvency If Not Needed

This Supreme Court judgment affirms the paramountcy of the commercial wisdom of the Committee of Creditors (CoC) under the Insolvency and Bankruptcy Code, 2016. It clarifies that the moratorium under Section 14(1)(d) does not bar the return of possession of a corporate debtor's leased asset when such a decision is a conscious business choice made by the CoC and the Resolution Professional to alleviate a financial burden on the estate. Facts Of The Case: The case originated from a dispute over the possession of a property leased by Nandini Impex Private Limited, the corporate debtor. The appellants had provided loans to the company, secured by the title deeds of the property's front and rear portions. Following a default, the property was conveyed to the appellants through separate deeds ...

Supreme Court: Company Balance Sheets Can Reset Limitation Clock for Creditors Under IBC

26Aug

By The Legal ChamberNo Comments

Supreme Court

Supreme Court: Company Balance Sheets Can Reset Limitation Clock for Creditors Under IBC

The Supreme Court held that entries in a company’s balance sheet, when read in the context of surrounding circumstances and previous financial statements, can constitute a valid acknowledgment of debt under Section 18 of the Limitation Act, 1963, thereby extending the limitation period for filing an application under Section 7 of the IBC. The Court clarified that the exclusion period under its COVID-19 limitation order applied from 15.03.2020 to 28.02.2022, making the application timely. Facts Of The Case: The appellant, IL & FS Financial Services Ltd., extended a term loan of ₹30 crores to the respondent, Adhunik Meghalaya Steels Pvt. Ltd., on 27.02.2015, secured by a pledge of shares. The respondent's account was declared a Non-Performing Asset (NPA) on 01.03.2018. The appellant fi...