#insolvency

The NCLAT affirmed the NCLT’s liquidation order, holding that the Committee of Creditors’ commercial wisdom cannot be judicially reviewed. Consequently, a rejected resolution plan automatically leads to winding-up, affecting all parties in IBC insolvency cases.

NCLAT ruled that a contribution order under Section 14 of the IBC can be imposed without a prior Section 66 finding, and that a Section 74 direction is only a reference now rendered moot by amendment. This means directors and resolution professionals may be liable for contributions during the moratorium even absent a default finding.

NCLAT holds that contempt proceedings cannot be sustained if the underlying court order rests on a mistaken factual basis. The ruling clarifies that compliance must be objectively possible-disbursements made prior to the order render contempt inapplicable, offering critical protection to liquidators and parties acting in good faith.

Bombay High Court rules that the moratorium under the Insolvency and Bankruptcy Code does not bar the Competent Authority from granting deemed conveyance under MOFA, prioritizing welfare legislation over insolvency proceedings. The judgment ensures housing societies can secure legal title to property even when the promoter is under CIRP, safeguarding flat owners' rights.

NCLAT grants exclusion of 87 days from the CIRP timeline due to delays in transitioning Resolution Professionals, emphasizing that liquidation should be a last resort. The ruling reinforces the need to preserve corporate debtors as going concerns, offering relief to stakeholders facing procedural delays under the IBC.

NCLAT clarifies that merely mortgaging property to secure a loan does not qualify as 'financial debt' under the IBC unless funds are disbursed to the corporate debtor. Creditors relying on mortgage security alone must now assert claims as 'other creditors,' impacting insolvency priority and recovery rights.

NCLAT clarifies that a joint venture partner can initiate insolvency proceedings under Section 9 IBC if its supply obligations are governed by a separate agreement, independent of profit-sharing arrangements. This ruling expands the scope of operational creditors, impacting joint venture contracts and insolvency filings.

Bombay High Court holds that a self-operative court order, requiring payment of decretal amounts by a specified deadline, automatically declares judgment debtors insolvent upon non-compliance without further judicial intervention. This ruling reinforces the binding nature of court undertakings under the Presidency Towns Insolvency Act, impacting creditors and debtors in enforcement proceedings.

Bombay High Court rules that failure to comply with a self-operative court order under the Presidency Towns Insolvency Act, 1909, results in automatic insolvency declaration without further hearing. The judgment underscores the binding nature of judicial undertakings and the consequences of non-compliance for judgment debtors.

Supreme Court affirms that Committee of Creditors' commercial decisions in IBC resolution plans are immune from judicial review unless statutory violations exist.