Topic
NCLAT rules that interest on inter-corporate deposits must be included in calculating the financial debt threshold under Section 5(8) of the Insolvency and Bankruptcy Code, 2016. This decision overturns NCLT's exclusion of interest based solely on TDS deductions, impacting creditors' eligibility for initiating CIRP.
NCLAT Chennai upholds liquidation under Section 33(1)(a) of the IBC, ruling that repeated failure to honor settlement proposals and non-cooperation with the Committee of Creditors (CoC) justifies bypassing resolution efforts. The judgment reinforces that liquidation is a last resort but becomes binding when promoters undermine the Corporate Insolvency Resolution Process (CIRP).
NCLAT upholds liquidation of a corporate debtor after the resolution applicant failed to secure RBI approvals within the one-year deadline under Section 31(4) of the Insolvency and Bankruptcy Code. The ruling reinforces strict compliance with regulatory timelines, impacting insolvency practitioners and creditors in CIRP proceedings.
NCLAT holds that disbursements made into unauthorized accounts through fraudulent means cannot be classified as financial debt under the Insolvency and Bankruptcy Code, 2016. The ruling bars initiation of Corporate Insolvency Resolution Process (CIRP) where loan agreements lack valid authorization, reinforcing the doctrine of indoor management in financial transactions.
Bombay High Court holds that a writ petition challenging a Recovery Officer's order remains maintainable during an IBC moratorium, balancing the need for urgent relief against statutory remedies. The ruling clarifies that the moratorium under Section 14 of the IBC does not automatically oust High Court's writ jurisdiction, impacting creditors and corporate debtors seeking interim protection.