Section-wise jurisprudence on

IBC upto 31.03.2023

 PREFACE

O
ne of the key functions of law is to ensure safety, security, and stability in the society.
Law structures economic, social, and political interactions in a secure, stable and
effective manner. It thus stipulates the mandate apropos acceptable and unacceptable
behaviour in the society writ large. Stated simply, law channels the outcomes and allows
the decision makers to anticipate likely outcomes and thereby, predicts consequences

of their actions. Clarity and certainty are, thus, strongly connected to the pursuit of the rule of law and
suffuses an element of predictability for the stakeholders. Legal clarity and certainty, of course, also adds
to the legitimacy of the judiciary while it fosters the rule of law. The Indian legal system has adopted a
host of features that enhances legal certainty and clarity, chief of which is the adoption of the doctrine of
stare decisis (binding nature of precedents). In fact, precedents convey information that allows the
decision makers and stakeholders to predict, within certain bounds, the likely legal consequences of
different choices and infer the possible range of outcomes of potential disputes and differences.

Legal discourse, in large part, determines the rules of the game and informs the players of those
rules so that they can best seek out their potential within the confines of the law. Precedents serve as a
primary source of legal research, insights and analysis, while stimulating the development of law. They
illuminate the interpretive strides made by the Courts when wading through the statutes. Legal research
often begins with statutes or regulations, the primary law passed by the legislature or regulatory agency
in the relevant jurisdictions. However, matters interpreting the terms and intent of the statute are
invaluable sources of law. It is essential to acquire familiarity with this body of law to determine the
elements of a cause of action, the latest and updated stance of the Courts, and to increase an
understanding of the litigation process.
 In this milieu, this publication/compilation of Section-wise case laws is the sprouting of a seed long
implanted, nurtured, and caressed by the Insolvency and Bankruptcy Board of India. It is the culmination
of a scholarly and professional journey that began with the enactment of the Insolvency and Bankruptcy
Code in May, 2016. As a dynamic and progressive economic legislation, the Code has been interpreted
by the judiciary with deference to legislative intent in economic matters. Judicial pronouncements under
the Code are very important resources to understand the various provisions of this ever-evolving law.
This publication is unique, as it represents the largest up-to-date account of the jurisprudential
development into the nuances of corporate insolvency resolution and other processes. It is topical, since
it delineates the pronouncements, as per the statutory provisions applied and interpreted by the
judiciary in much simpler manner.

The overall idea of this compilation is to encourage and publish material that is of scholarly depth,
precision and independence, and at the same time, readable and engaging. Understood as a whole, this
publication attempts to cover the case laws emerged till 31st March 2023 and raises as many new questions
as it concomitantly provides answers to. The discourse will generate further fruitful debates, and will
continue with every emerging jurisprudence; undoubtedly, challenging the best minds in the field. It is
envisioned that this compilation serves as a worthy part of the changing face of insolvency and bankruptcy
law in the country.

31st March 2023.

Legal Affairs Division
Insolvency and Bankruptcy Board of India

Disclaimer: The contents of this publication are intended to provide inputs to the stakeholders more of academic value. The summary provided
against each case law shall not be used as opinion of the IBBI before any court/tribunal/legal forum/other authority. The readers are advised to
go through the original order/judgment as available on the concerned official websites for authentic usage. No claim orliability is to be cast on
the IBBI for any spelling/typographical/other mistakes.
 LIST OF ABBREVIATIONS

Abbreviation Full Form

AA Adjudicating Authority

AA Rules The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules,

2016.

AFA Authorisation for Assignment

Board/ IBBI Insolvency and Bankruptcy Board of India

CCI Competition Commission of India

CD Corporate Debtor

CIRP Corporate Insolvency Resolution Process

CIRP Regulations The Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulations, 2016

CoC Committee of Creditors

Code Insolvency and Bankruptcy Code, 2016

DRT Debts Recovery Tribunal

ED Enforcement Directorate

EPFO Employees’ Provident Fund Organisation

FC Financial Creditor

FSP Financial Service Provider

HC High Court
Abbreviation Full Form

ICD Insolvency Commencement Date

IP Insolvency Professional

IP Regulations The Insolvency and Bankruptcy Board of India (Insolvency Professional)

Regulations, 2016

IPE Insolvency Professional Entity

IRP Interim Resolution Professional

IU Information Utility

Liquidation Process The Insolvency and Bankruptcy Board of India (Liquidation Process)
Regulations Regulations, 2016

MSME Micro, Small and Medium Enterprise

MSME Act The Micro, Small and Medium Enterprises Development Act, 2006

NBFC Non-Banking Financial Company

NCLAT National Company Law Appellate Tribunal

NCLT National Company Law Tribunal

NCLT Rules National Company Law Tribunal Rules, 2016

NI Act Negotiable Instruments Act, 1881

OC Operational Creditor

PMLA The Prevention of Money-Laundering Act, 2002

RBI Reserve Bank of India

RP Resolution Professional
Abbreviation Full Form

SARFAESI Act Securitisation and Reconstruction of Financial Assets and Enforcement of Security
Interest Act, 2002

SC Supreme Court of India

SEBI Securities and Exchange Board of India

UNCITRAL Legislative UNCITRAL (United Nations Commission on International Trade

Guide Law) Legislative Guide on Insolvency Law

RERA Real Estate Regulatory Authority

Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
Long title
1. Objectives The Code is a beneficial legislation which Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
of Code puts the CD back on its feet and is not a Vs. Union of India & Ors. [WP
mere recovery legislation for creditors. The (Civil) No. 99, 100, 115, 459,
interests of the CD have, therefore, been 598, 775, 822, 849, and 1221 of
bifurcated and separated from that of its 2018, SLP (Civil) No. 28623 of
promoters/those who are in management. 2018 and WP (Civil) 37 of 2019]
The defaulter’s paradise is lost. In its place,
the economy’s rightful position has been
regained.
2. One of the important objectives of the Innoventive Industries Ltd. Vs. SC 31.08.2017
Code is to bring the insolvency law in India ICICI Bank & Anr. [Civil Appeal
under a single unified umbrella with the No. 8337-8338 of 2017]
objective of speeding up the insolvency
process.
3. CIRP is not a recovery proceeding to Prowess International Pvt. Ltd. NCLAT 18.08.2017
recover the dues of the creditors. The Code Vs. Parker Hannifin India Pvt.
is an Act relating to reorganisation and Ltd. [CA (AT) (Ins.) No. 89 of
insolvency resolution of corporate persons, 2017]
partnership firms and individuals in a time
bound manner for maximisation of value of
assets of such persons and to promote
entrepreneurship, availability of credit and
balance the interests of all the stakeholders
including the Government dues.
4. To get conversant to new law and to see DF Deutsche Forfait AG & Anr. NCLT, 10.04.2017
fruits of it, it will take time, but just for the Vs. Uttam Galva Steel Ltd. [C.P. Mumbai
sake of this reason, we cannot wish away No. 45/I &
the mandate of this nation which has come BP/NCLT/MAH/2017]
through Parliament.
5. In view of Statement of Objects and Tourism Finance Corporation of NCLAT 19.12.2019
Reasons of the Code read with section 53, India Ltd. Vs. Rainbow Papers
the Government cannot claim first charge Ltd. & Ors. [CA (AT) (Ins.) No.
over the property of the CD. 354 of 2019 and other appeals]
6. What is sought to be achieved in the Code V Hotels Ltd. Vs. Asset NCLT, 01.05.2019
is not shutting down of the CD, but reviving Reconstruction Company Mumbai
it by ousting the defaulter (India) Ltd. [MA 693/2018 in CP
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
promoters/directors who were in control No.
and management of the CD. 532/IBC/NCLT/MB/MAH/2018]
7. The object of the Code is no doubt to Bharatbhai Vrajlalbhai Selani NCLT, 21.08.2017
protect the genuine CD with a view to Vs. State Bank of India [C.P. (IB) Ahmedaba
maximise its value of assets and find out a No. 63/10/NCLT/AHM/2017] d
resolution plan to revive the CD.
8. The proceedings under Code are Action Ispat & Power Pvt. Ltd. HC, New 10.10.2019
independent and have an object different Vs. Shyam Metalics & Energy Delhi
from the one envisaged under the scheme Ltd. & Ors. [Company Appeal
of liquidation provided in the company law. 11/2019 & CM No. 31047/2019,
The former aims for resolution by way of CM No. 34726/2019]
revival in a manner that benefits all
stakeholders, the creditors as well as the
CD.
9. Time is a crucial facet of the scheme under Kridhan Infrastructure Pvt. Ltd. SC 01.03.2021
the Code and to allow such proceedings to (now known as Krish Steel and
lapse into an indefinite delay will plainly Trading Pvt. Ltd.) Vs.
defeat the object of the Code. Venkatesan Sankaranarayan &
Ors. [Civil Appeal No. 3299 of
2020]
10. One of the principal objects of the Code is K.N. Rajakumar Vs. V. SC 15.09.2021
providing for revival of the CD and to make Nagarajan & Ors. [Civil Appeal
it a going concern. Every attempt has to be No. 2901 of 2021]
first made to revive the concern and make
it a going concern, liquidation being the last
resort.
11. An objective of the Code is to free up Basavaraj Koujalagi & 82 Ors. NCLT, 03.05.2021
resources of unviable companies by Vs. Sumit Binani, Liquidator of Kolkata
permitting an easy exit. It cannot be Gujarat NRE Coke Ltd. [IA No.
misconstrued to keep unviable units afloat 865/KB/2020 in CP (IB) No.
by some sleight of hand under the guise of 182/KB/2017]
keeping it as a going concern, thereby
defeating a key objective of the Code.
12. One of the objects of the Code is to conduct Ram Ratan Modi Vs. ICICI Bank NCLT, 19.05.2021
the CIRP in a time bound manner, [IA No. 1477/KB/2020 in CP (IB) Kolkata
therefore, to save the time, upon coming to No. 184/KB/2018]
knowledge of the order of admission of the
CD into CIRP, the statutory authorities
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
should withdraw their direction of
attachment of the assets of the CD.
13. The provisions of the Code are essentially Invent Asset Securitisation and SC 25.04.2022
intended to bring the CD to its feet and are Reconstruction Pvt. Ltd. Vs.
not of money recovery proceedings as Girnar Fibres Ltd. [Civil Appeal
such. No. 3033 of 2022]
14. The provisions of the Code and the rules Asset Reconstruction Company SC 01.08.2022
and regulations framed thereunder be (India) Ltd. Vs. Tulip Star Hotels
construed liberally, in a purposive manner Ltd. & Ors. [Civil Appeal Nos.
to further the objects of enactment of the 84-85 of 2020]
statute. The Code is essentially a statute
which works towards the revival of a
corporate body, unable to pay its debts, by
appointment of a RP.
2 Application
15. Section 2(e), which was brought into force State Bank of India Vs. V. SC 14.08.2018
on 23.11.2017 would, when it refers to the Ramakrishnan & Anr. [Civil
application of the Code to a personal Appeal No. 3595 of 2018 with
guarantor of a CD applies only for limited 4553 of 2018]
purpose contained in sub-sections (2) and
(3) of section 60. This is what is meant by
strengthening the CIRP in the Statement of
Objects and Reasons of the Insolvency and
Bankruptcy Code (Amendment) Act, 2018.
3 Definitions
16. The CD cannot use the provisions of section Apeejay Trust Vs. Aviva Life NCLT, New 04.11.2019
3, as a blanket cover to claim exclusion Insurance Co. India Ltd. [(IB)- Delhi
from proceedings under the Code on the 1885(ND)2019]
ground that it is a financial service provider.
3(6) Claim
17. ‘Claim’ under section 3(6) means a right to Innoventive Industries Ltd. Vs. SC 31.08.2017
payment, even if it is disputed. ICICI Bank & Anr. [Civil Appeal
Nos. 8337-8338 of 2017]
18. ‘Claim’ gives rise to ‘debt’ only when it is Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
due and ‘default’ occurs only when debt Vs. Union of India & Ors. [WP
becomes due and payable and is not paid (Civil) Nos. 99, 100, 115, 459,
by the debtor. 598, 775, 822, 849, and 1221 of
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
2018, SLP (Civil) No. 28623 of
2018 and WP (Civil) 37 of 2019]
19. The different claim(s) arising out of International Road Dynamics NCLAT 01.08.2017
different agreements or work order, having South Asia Pvt. Ltd. Vs. Reliance
different amount and different dates of Infrastructure Ltd. and D. A.
default, cannot be clubbed together for Toll Road Pvt. Ltd. [CA (AT)
alleged default of debt, as the cause of (Ins.) No. 72 and 77 of 2017]
action is separate.
20. The tribunal cannot go in to roving enquiry K. K. V. Naga Prasad Vs. Lanco NCLT, 21.02.2017
into the disputed claims of parties as the Infratech Ltd. [CP (IB) No. Hyderabad
object of the Code is to ensure 9/9/HDB/2017]
reorganization and insolvency resolution of
corporate persons, individuals, etc., in a
time bound manner for maximisation of
value of assets.
21. Fees of an RP cannot be considered to be a CA Rita Gupta (Erstwhile RP in NCLAT 01.08.2022
claim and cannot be determined or verified the matter of Shilpi Cable
by a liquidator. Technologies Ltd.) Vs. Shilpi
Cable Technologies Ltd. & Ors.
[CA (AT) (Ins.) No. 10 of 2020]
22. The claims of the workmen/employees Kishore K. Lonkar Vs. Hindustan NCLAT 10.05.2022
may be classified as ‘service claims’ which Antibiotics Ltd. [CA (AT) (Ins.)
arise during the terms of employment and No. 934 of 2021]
‘welfare claims’ which arise after cessation
of employment.
3(7) Corporate Person
23. National Highway Authority of India (NHAI) Hindustan Construction SC 27.11.2019
is a statutory body which functions as an Company Ltd. & Anr. Vs. Union
extended limb of the Central Government of India & Ors. [WP (Civil) No.
and performs Governmental functions 1074 of 2019 with other Civil
which obviously cannot be taken over by an Appeals]
RP, or by any other corporate body nor can
NHAI ultimately be wound up under the
Code. For all these reasons, it is not
possible to either read in, or read down; the
definition of ‘corporate person’ in section
3(7) to include NHAI.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
24. There is no exemption provided under the Tamil Nadu Generation and HC, Madras 08.11.2021
Companies Act, 2013 or the Code from the Distribution Corporation
insolvency proceedings with regard to a Limited (TANGEDCO) Vs. The
company which is substantially owned by Union of India & Ors. [W.P. No.
the government. 19785 of 2021]

25. Under section 3(7) of the Code, Co- Asset Reconstruction Company NCLAT 03.08.2021
operative Societies are not ‘corporate (India) Ltd. Vs. Mohammadiya
persons’ to whom the provisions of the Educational Society and other
Code applies. matters [CA (AT) (Ins.) No. 495
and 496 of 2019]
3(8) Corporate Debtor
26. If a corporate person extends guarantee for Laxmi Pat Surana Vs. Union SC 26.03.2021
the loan transaction concerning a principal Bank of India & Anr. [Civil
borrower not being a corporate person, it Appeal No. 2734 of 2020]
would still be covered within the meaning
of expression "corporate debtor" in section
3(8).
3(10) Creditor
27. The parties who have entered into Nikhil Mehta and Sons Vs. AMR NCLAT 21.07.2017
agreement, for purchase of flat or shop or Infrastructure Ltd. [CA (AT)
any immovable property, which contains a (Ins.) No. 7 of 2017]
clause of assured or committed returns are
‘financial creditors’ under the Code.
28. A ‘decree holder’ though covered under the Biogenetics Drugs Pvt. Ltd. Vs. NCLT, 18.02.2021
definition of ‘creditor’ under section 3(10) Themis Medicare Ltd. [C.P. (I.B) Ahmedaba
would not fall within the class of FCs or OCs No. 696/ NCLT/ AHM/2019] d
and therefore, a decree holder cannot
initiate CIRP against the CD with an
objective to execute the decree.
29. To equate the unitholders in mutual funds Franklin Templeton Trustee SC 14.07.2021
with the creditors under the Code, will be Services Pvt. Ltd. and Anr. Vs.
unsound and incongruous. Amruta Garg and Ors. [Civil
Appeal No. 498-501 of 2021
with other appeals]
3(11) and Debt and Default
3(12)
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
30. When the definitions of ‘operational debt’, Brand Realty Services Ltd. Vs. NCLT, New 22.07.2020
‘debt’ and ‘default’ are read together, it can Sir John Bakeries India Pvt. Ltd. Delhi
be said that the definition of ‘debt’ as [(IB)1677(ND)/2019]
defined under the Code does not mean
‘operational debt’ only, rather it includes
‘financial debt’ as well as liability or
obligation in respect of a claim, which is
due from any person, and ‘default’ means
non-payment of ‘debt’, but in order to
trigger section 9 of the Code, an OC is
required to establish a ‘default’ for non-
payment of ‘operational debt’ as defined
under section 5(21) of the Code and if a
person fails to establish that, they cannot
initiate CIRP.
31. It is latently and patently clear that once Rita Kapur Vs. Invest Care Real NCLAT 02.09.2020
the ‘debt’ is converted into ‘capital’, it Estate LLP and Ors. [CA (AT)
cannot be termed as ‘financial debt’. (Ins.) No. 111 of 2020]
32. The ‘debt’ is disputed so long as the ‘debt’ Innoventive Industries Ltd. Vs. SC 31.08.2017
is ‘due’ i.e. payable unless interdicted by ICICI Bank & Anr. [Civil Appeal
some law or has not yet become due in the Nos. 8337-8338 of 2017]
sense that it is payable at some future date.
It is only when this is proved to the
satisfaction of the AA, that it may reject an
application and not otherwise.
33. Existence of an undisputed ‘debt’ is sine Transmission Corporation of SC 23.10.2018
qua non of initiating CIRP. Andhra Pradesh Ltd. Vs.
Equipment Conductors and
Cables Ltd. [Civil Appeal No.
9597 of 2018]
34. If in terms of any agreement, interest is Krishna Enterprises Vs. NCLAT 27.07.2018
payable to the OC or the FC, then ‘debt’ will Gammon India Ltd. [CA (AT)
include interest, otherwise, the principal (Ins.) No. 144 of 2018 and other
amount is to be treated as ‘debt’ which is appeals]
the liability in respect of the ‘claim’ which
can be made from the CD.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
35. Mere fact of ‘debt’ being due and payable Park Energy Pvt. Ltd. Vs. NCLAT 24.08.2020
is not enough to justify the initiation of CIRP Syndicate Bank and Anr. [CA
at the instance of the FC, unless the (AT) (Ins.) No. 270 of 2020]
‘default’ on the part of the CD is
established.
36. ‘Default’ is defined in section 3(12) in very Innoventive Industries Ltd. Vs. SC 31.08.2017
wide terms as non-payment of a ‘debt’ ICICI Bank & Anr. [Civil Appeal
once it becomes due and payable, which Nos. 8337-8338 of 2017]
includes non-payment of even part thereof
or an instalment amount.
37. The context of section 3(12) is actual non- B. K. Educational Services Pvt. SC 11.10.2018
payment by the CD when a ‘debt’ has Ltd. Vs. Parag Gupta and
become due and payable. Associates [Civil Appeal No.
23988 of 2017 and other
appeals]
38. An amount not released to FC due to R. Sridharan Vs. Assets Care & NCLAT 25.07.2018
misunderstanding between the consortium Reconstruction Enterprise Ltd.
of banks, cannot be treated as ‘default’. [CA (AT) (Ins.) No. 241 of 2018]
39. The legislature was conscious regarding Promila Taneja Vs. Surendri NCLAT 10.11.2020
liabilities arising from a particular type of Design Pvt. Ltd. [CA (AT) (Ins.)
lease and it made specific provision in No. 459 of 2020]
section 5(8)(d) to make it a ‘financial debt’.
No such provision was made in respect of
an operational debt.
40. CIRP can be initiated against a CD which has Anand Rathi Global Finance Ltd. NCLT, 19.02.2021
‘defaulted’ in repaying the loan in the Vs. Doshi Holdings Pvt. Ltd. Mumbai
capacity of co-borrower/pledgor, as the [C.P.(IB)-1220/(MB)/2020]
liability of borrower and co-
borrower/pledgor is co-extensive under
the Indian Contract Act, 1872.
41. It is beyond purview of the AA to venture State Bank of India Vs. Shri Lal NCLT, New 25.02.2021
into the question of the reason for the Mahal Ltd. [IB-613/ND/2019] Delhi
‘default’ and the intention behind the
‘default’ as submitted by the CD especially
when the application is filed under section
7 of the Code.
42. Share purchase with exit option of inter alia Hubtown Ltd. Vs. GVFL Trustee NCLT, 29.11.2021
“Annual Put Option” cannot be considered Company Pvt Ltd. [M.A Mumbai
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
as a debt which is disbursed against 2411/2019 in C.P.
consideration of time value for money. 4128/I&B/MB/2018 and other
Equity is not a debt and as such any MAs]
contract for acquisition of shareholding in a
company can never result in the formation
of a debt.
3(23) Person
43. A sole proprietary concern, not being a R.G. Steels Vs. Berrys Auto NCLT, New 23.09.2019
‘person’ under section 3(23) of the Code Ancillaries (P) Ltd. [IB- Delhi
and also when there is a pre-existing 722/ND/2019]
dispute, cannot file application under
section 9.
44. A ‘trade union’ is an entity established JK Jute Mill Mazdoor Morcha SC 30.04.2019
under a statute i.e. the Trade Unions Act, Vs. Juggilal Kamlapat Jute Mills
1926 and is therefore, a ‘person’ under Company Ltd. & Ors. [Civil
section 3(23) of the Code. Appeal No. 20978 of 2017]
45. A proprietorship concern does not fall Shri Shakti Dyeing Works Vs. NCLT, 25.01.2021
within the purview of “person” as per Berawala Textiles Pvt. Ltd. [CP Ahmedaba
section 3(23) for the purpose of filing an (IB) No. 854/NCLT/AHM/2019] d
application under section 9 of the Code.
Proprietorship concern cannot sue and be
sued unless it is represented by a
proprietor.
3(30) Secured Creditor
46. The State Tax Officer does not come within Tourism Finance Corporation of NCLAT 19.12.2019
the meaning of ‘secured creditor’ as India Ltd. Vs. Rainbow Papers
defined under section 3(30) read with Ltd. & Ors. [CA (AT) (Ins.) No.
section 3(31). 354 of 2019 and other appeals]
4 Application of Part-II
47. The enhancement of threshold vide Madhusudan Tantia Vs. Amit NCLAT 12.10.2020
Notification dated 24.03.2020 issued by the Choraria & Anr. [CA (AT) (Ins.)
Ministry of Corporate Affairs, is prospective No. 557 of 2020]
in nature and would not apply to the
pending applications filed prior to the
issuance of the said Notification.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
48. The Notification dated 24.03.2020 issued Al Sadiq Sweets Vs. Krisenter NCLT, Kochi 26.02.2021
by the Ministry of Corporate Affairs, Impex Pvt. Ltd.
whereby the minimum amount of default [IBA/35/KOB/2020]
limit was specified as ₹ 1 crore, is
prospective in nature and not a
retrospective one.
49. The law is very clear that it is enough if Manipal Media Network Ltd. NCLAT 21.06.2021
under section 4 of the Code the unpaid Vs. Vishwakshara Media Pvt.
debt is more than the threshold value of ₹ Ltd. [CA (AT) (Ins.) No. 369 of
1 lakh for acceptance of application under 2020]
section 9 of the Code.
50. Where the default has occurred prior to the BLS Ploymers Ltd. Vs. RMS NCLT, New 27.07.2021
issuance of Notification dated 24.03.2020 Power Solutions Pvt. Ltd. [CP Delhi
and demand notice was also delivered prior No. IB-340(ND)/2021]
to that notification but the application has
been filed after 24.03.2020, the
enhancement of the threshold limit from ₹
1 lakh to ₹ 1 crore rupees is not applicable.
51. The interest amount cannot be clubbed CBRE South Asia Private Ltd. Vs. NCLT, New 19.01.2022
with the principal amount of debt to arrive United Concepts and Solutions Delhi
at the minimum threshold of Rs.1 crore for Pvt. Ltd. [(IB)-797(ND)2021]
complying with the provisions of section 4
of the Code, for an application filed under
section 9 of the Code. The threshold has to
be applicable on the date of filing of the
application.
52. From the date of amendment, Part II of the Tharakan Web Innovations Pvt. HC, Kerala 01.02.2022
Code can apply only to matters relating to Ltd Vs. National Company Law
insolvency and liquidation of CD, where the Tribunal & Anr. [W.P(C) 27636
minimum amount of default is ₹ 1 Crore. of 2020]
The application of Part II itself is taken away
with effect from 24.03.2020 as far as
defaults less than ₹ 1 Crore are concerned
and hence, no application can be filed after
24.03.2020 regarding an amount where the
default is less than ₹ 1 Crore.
5(5A) Corporate Guarantor
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
53. If CIRP has been initiated against the CD, State Bank of India Vs. D. S. NCLAT 18.04.2018
the insolvency and bankruptcy process Rajender Kumar [CA (AT) (Ins.)
against the personal guarantor can be filed No. 87 to 91 of 2018]
under section 60(2) before the same NCLT
and not before the DRT.
54. Without initiating CIRP against the principal Rai Bahadur Shree Ram and SC 11.02.2019
borrower, it is open to the FC to initiate Company Pvt. Ltd. Vs. Rural
CIRP under section 7 against corporate Electrification Corporation Ltd.
guarantors as the creditor is also the FC qua & Ors. [Civil Appeal No. 1484 of
corporate guarantor. 2019]
55. The principal debtor (CD) is discharged State Bank of India Vs. NCLT, 04.09.2019
under the Code not on the instance of a Sungrowth Shares & Stocks Ltd. Kolkata
creditor but due to operation of law, i.e., [CP (IB) No. 796/KB/2018]
approval of resolution plan. Hence, the
guarantor is not discharged of its liability
merely because the creditor consented to a
resolution plan of the principal debtor.
56. The corporate guarantees given by the CD Export Import Bank of India Vs. NCLAT 16.01.2019
can be invoked only in the event of a CHL Ltd. [CA (AT) (Ins.) 51 of
default on the part of the borrower. 2018]
57. It makes no difference as to whether the The Karur Vysya Bank Ltd. Vs. NCLT, 08.04.2019
corporate person stood as guarantor to an Maharaja Theme Parks and Chennai
individual or a corporate person, and as so Resorts Pvt. Ltd.
long as the obligation in respect of a claim [CP/1314/IB/2018]
is due from a corporate person falling
within the definition of ‘financial debt’,
then it is obvious that the creditor can
proceed under section 7 of the Code
against such corporate person.
58. The Code is at a nascent stage and it is Insolvency and Bankruptcy SC 29.10.2020
better that the interpretation of the Board of India Vs. Lalit Kumar
provisions is taken up by the SC to avoid any Jain & Ors. [TP (Civil) No.(s)
confusion and to authoritatively settle the 1034/2020 with other TPs]
law. It directed that no further petitions
involving the challenge to the notification
dated November 15, 2019, which brought
into force certain provisions relating to the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
personal guarantors (PGs) to CDs, shall be
entertained by any High Court.
59. Neither section 14 nor section 31 of the Kiran Gupta Vs. State Bank of HC, New 02.11.2020
Code place any fetters on a bank/financial India & Anr. [W.P.(C) Delhi
institutions from initiation and 7230/2020 & [Link].
continuation of proceedings against the 24414/2020 (stay)]
guarantor for recovering of their dues. The
liability of the principal borrower and
guarantor remain co-extensive and a
bank/financial institution is entitled to
initiate proceedings against the personal
guarantor under the SARFAESI Act during
the continuation of the CIRP against the
principal borrower.
60. CIRP can be proceeded against the principal State Bank of India Vs. Athena NCLAT 24.11.2020
borrower as well as guarantor. Energy Ventures Pvt. Ltd. [CA
(AT) (Ins.) No. 633 of 2020]
61. A resolution applicant, who is guarantor in Mathuraprasad c Pandey & Ors. NCLAT 14.12.2022
individual capacity, shall not be covered Vs. Partiv Parikh, RP of M. V.
with any immunity given under the Omni Projects (india) Ltd. &
resolution plan. anr. [ CA (AT) (Ins) No.
201/2021 with 266/2021
5(6) Dispute
62. Any observations with regard to individual Yogendra Yasupal Vs. Jigsaw NCLAT 16.10.2017
officer if made by a court of law or in any Solutions & Anr. [CA (AT) (Ins.)
communication made by the operational No. 222 of 2017]
creditor, the same cannot be treated to be
an existence of dispute.
63. The test of existence of a dispute is: (a) Mobilox Innovations Pvt. Ltd. SC 21.09.2017
whether the corporate debtor has raised a Vs. Kirusa Software Pvt. Ltd.
plausible contention requiring further [Civil Appeal No.9405 of 2017]
investigation which is not a patently feeble
legal argument or an assertion of facts
unsupported by evidence (b) whether the
defence is not spurious, mere bluster,
plainly frivolous or vexatious (c) a dispute,
if it truly exists in fact between the parties,
which may or may not ultimately succeed.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
64. The dispute should not be a mere eyewash Simplex Infrastructures Ltd. Vs. NCLT, New 10.08.2017
and attempt to derail the OC's entitlement Agrante Infra Ltd. [IB No. (IB)- Delhi
to initiate the proceedings under sections 8 167(ND)/2017]
and 9 of the Code.
65. A unilateral transfer of liability does not Chetan Sharma Vs. Jai Lakshmi NCLAT 10.05.2018
constitute a 'dispute' within the meaning of Solvents (P) Ltd. & Anr. [CA (AT)
section 5(6) and an inter-se dispute (Ins.) No. 66 of 2017 and other
between two groups of shareholders of the appeals]
CD does not constitute a 'dispute' in
reference to OCs. The 'dispute' under
section 5(6) of the Code must be between
the CD and the OCs.
66. On the ‘existence of a dispute’, it was Anuj Khanna Vs. Wishwa NCLAT 25.11.2020
observed that section 5(6) is an inclusive Naveen Traders & Anr. [CA (AT)
provision and does not confine the AA from (Ins.) No. 555 of 2020]
considering the existence of a dispute from
a broader angle. Therefore, dispute in
terms of section 8(2)(a) of the Code shall
not be limited to instances specified in the
definition under section 5(6).
67. The dispute between the parties is not Krishna Hi-tech Infrastructure NCLAT 06.12.2022
supposed to be decided, examined and Pvt. Ltd. Vs. Bengal Shelter
adjudicated by AA in CIRP. Housing Development Ltd. [CA
(AT)(Ins.) No. 1375 of 2022 &
I.A. No. 4297, 4296 of 2022]
68. The scheme of insolvency proceedings Jain Irrigation Systems Ltd. Vs. NCLAT 21.03.2023
contemplate that the proceeding shall go Pragyawan Technologies Pvt.
on only when there is an admitted debt and Ltd. [CA (AT) (Ins.) No. 311 of
default. NCLT is not the forum for deciding 2023]
and adjudicating the contractual dispute
between the parties.
5(7) Financial Creditor
69. Mere invocation of pledge of shares will not State Bank of India Vs. NCLT, 07.11.2019
result in automatic conversion of debt into Meenakshi Energy Ltd. [CP(IB) Hyderabad
equity and repayment of debt. 184/7/HDB/2019]
70. The assignee of the debt is also entitled to Edelweiss Asset Reconstruction NCLT, 05.09.2017
file application and such assignee steps into Company Limited Vs. Kalptaru Ahmedaba
the shoes of the FC. d
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
Alloys Pvt. Ltd. [CP (IB) No.
84/7/NCLT/AHM/2017]
71. The grouping of FCs in accordance with the Canara Bank Ltd. Vs. Deccan NCLT, 09.05.2019
amount of security holding is not Chronicle Holdings Ltd. [IA 121 Hyderabad
discriminatory. and 24/2019 in CP(IB)No.
41/7/HDB/2017]
72. Essential criteria for being an FC: (i) A B.V.S. Lakshmi Vs. Geometrix NCLAT 22.12.2017
person to whom a financial debt is owed Laser Solutions Pvt. Ltd. [CA
and includes a person whom such debt has (AT) (Ins.) No. 38 of 2017]
been legally assigned or transferred to (ii)
The debt along with interest, if any, is
disbursed against the consideration for
time value of money and include any one or
more mode of disbursed as mentioned in
clause (a) to (i) of sub-section (8) of Section
5.
73. The allottees/home buyers were included Pioneer Urban Land and SC 09.08.2019
in the main provision, i.e., section 5(8)(f) Infrastructure Ltd. & Anr. Vs.
with effect from the inception of the Code. Union of India & Ors. [WP (C)
The Explanation was added in 2018 merely No. 43 of 2019 with other
to clarify doubts that had arisen. The appeals]
deeming fiction that is used by the
Explanation is to put beyond doubt the fact
that allottees are to be regarded as
financial creditors within section 5(8)(f) of
the Code.
74. Home buyers are brought within the Chitra Sharma and Ors. Vs. SC 09.08.2018
purview of the financial creditors under the Union of India and Ors. [WP
Code. (Civil) 744 of 2017 and other
appeals]
75. In a ‘Recurring Investment Plan’ wherein Mohanlal Dhakad Vs. BNG NCLAT 22.02.2021
the CD failed in its commitment to offer the Global India Ltd. [CA (AT) (Ins.)
allotment of plots of land as promised by it No. 684 of 2020]
or pay the assured returns, or repay the
sums collected by it along with interest on
the maturity of the schemes etc, the
investor’s position is that of a FC as per
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
section 5(7) read with section 5(8) of the
Code.

76. The SC reiterated that a person having only Phoenix ARC Pvt. Ltd. Vs. SC 03.02.2021
security interest over the assets of CD, even Ketulbhai Ramubhai Patel [Civil
if falling within the description of 'secured Appeal No. 5146 of 2019]
creditor' by virtue of collateral security
extended by the CD, would not be covered
by the definition of ‘financial creditor’
under the Code. It held that the CD in the
matter has only extended security through
pledge of shares and there was no liability
to repay the loan taken by the borrower on
the CD. Therefore, the creditor in such a
case will at best be secured creditor qua CD
and not the FC qua CD.
77. Banks/Financial Institutions which have Axis Bank Ltd. Vs. Value NCLAT 20.12.2021
advanced loans to home buyers cannot be Infracon India Pvt. Ltd. & Anr.
considered as FCs and included in CoC [I.A. No. 1502 of 2020 & I.A. No.
specifically in the light of the fact that the 1503 of 2020 in CA (AT) (Ins.)
liability to repay the home loan is on the No. 582 of 2020]
individual home buyers.
78. A liability in respect of a claim arising out of Kotak Mahindra Bank Ltd. Vs. SC 30.05.2022
a recovery certificate would be a financial A. Balakrishnan & Anr. [Civil
debt and the holder of a recovery Appeal No. 689 of 2021]
certificate would be a FC. A person would
be entitled to initiate CIRP, within a period
of three years from the date of issuance of
the recovery certificate.
79. A landowner in a development agreement Ashoka Hi-Tech Builders Pvt. NCLAT 18.01.2023
is not a financial creditor and cannot be Ltd. Vs. Sanjay Kundra & Anr.
included in the CoC. [CA (AT) (Ins.) No. 46 of 2023]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
80. The definition of ‘creditor’ includes a Darshan Gandhi Vs. USV NCLAT 16.11.2022
decree holder and application cannot be Private Limited [CA (AT) (Ins.)
dismissed on the ground that no steps No. 644 of 2019 & I.A. Nos.
were taken for filing execution case in a 2106, 4316, 2609 & 2614 of
civil court. 2019]
5(8) Financial Debt
81. The Joint Development Agreement Vipul Limited Vs. Solitaire NCLAT 18.08.2020
entered, is a contract of reciprocal rights Buildmart Pvt. Ltd. [CA (AT)
and obligations, both parties are (Ins.) No. 550 of 2020]
admittedly Joint Development Partners,
who entered into a consortium of sorts for
developing an Integrated Township and for
any breach of terms of contract, section 7
Application is not maintainable as the
amount cannot be construed as financial
debt as defined under section 5(8) of the
Code.
82. Pledge of shares would not fall within the Vistara ITCL (India) Ltd. & Ors. NCLAT 24.08.2020
concept of guarantee and indemnity so as Vs. Dinkar
to bring it within the meaning of financial Venkatasubramanian & Ors.
debt. [CA (AT) (Ins.) No. 703 of 2020]
83. The payment received for shares, duly Radha Exports (India) Pvt. Ltd. SC 28.08.2020
issued to a third party at the request of the Vs. K.P. Jayaram & Anr. [Civil
payee as evident from official records Appeal No. 7474 of 2019]
would not be a debt.
84. In order to satisfy the requirement of this Nikhil Mehta and Sons Vs. AMR NCLAT 21.07.2017
provision, the financial transaction should Infrastructure Ltd. [CA (AT)
be in the nature of debt and no equity has (Ins.) No. 07 of 2017]
been implied by the opening words of
section 5(8) of the Code.
85. A transaction will be considered as an DF Deutsche Forfait AG & Anr. NCLT, 10.04.2017
operational debt if the payment is made to Vs. Uttam Galva Steel Ltd. [C.P. Mumbai
goods or services and if money is lent in No. 45/I & P/NCLT/MAH/2017]
contemplation of returns in the form of
interest will be a financial debt.
86. It is manifestly clear that money advanced Shailesh Sangani Vs. Joel NCLAT 30.01.2019
by a Promoter, Director or a Shareholder of Cardoso & Anr. [CA (AT) (Ins.)
the CD as a stakeholder to improve No. 616 of 2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
financial health of the Company and boost
its economic prospects, would have the
commercial effect of borrowing on the part
of CD notwithstanding the fact that no
provision is made for interest thereon.
87. In real estate projects, money is raised from Pioneer Urban Land and SC 09.08.2019
the allottee, against consideration for the Infrastructure Ltd. & Anr. Vs.
time value of money. Thus, allottees are to Union of India & Ors. [WP (C)
be regarded as FCs. No. 43 of 2019 with other
appeals]
88. If Inter-Corporate Deposit is made for a Narendra Kumar Agarwal & NCLAT 19.01.2021
certain period which was to be paid back Anr. Vs. Monotrone Leasing
with interest, then such transaction will fall Pvt. Ltd. & Anr. [CA (AT) (Ins.)
in the definition of 'financial debt'. No. 549 of 2020]
89. The amount raised under a Forward State Bank of India Vs. Rajendra NCLT, 06.01.2021
Purchase Agreement (FPA) would not come Bhuta, IRP of Prabhat Mumbai
within the definition of a ‘financial debt’ Technologies (India) Ltd. & Ors.
unless it bears the dual attributes of (i) [IA No. 440 of 2020 in C.P. No.
having been disbursed against the 1874/MB/2019]
consideration for time value of money and
(ii) has the commercial effect of a
borrowing.
90. The definition of ‘financial debt’ does not Orator Marketing Pvt. Ltd. Vs. SC 26.07.2021
expressly exclude an interest free loan. Samtex Desinz Pvt. Ltd. [Civil
‘Financial debt’ would have to be construed Appeal No. 2231 of 2021]
to include interest free loans advanced to
finance the business operations of the
corporate body.
91. When lease involves real estate with a fair New Okhla Industrial NCLAT 16.04.2021
value different from its carrying amount, Development Authority Vs.
the lease can be classified as a finance lease Anand Sonbhadra, RP [CA (AT)
if the lease transfers ownership of the (Ins.) No. 1183 of 2019]
property to the lessee with substantially all
the risks and also rewards incidental to
ownership of the asset.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
92. ‘Security Deposit’ and the interest thereon Sach Marketing Pvt. Ltd. Vs. RP NCLAT 07.11.2021
would fall within the ambit of the definition of Mount Shivalik Industries
of ‘Financial Debt’ as defined under section Ltd. [CA (AT) (Ins.) No. 180 of
5(8)(f) of the Code. The said amount of debt 2021]
was treated as ‘Financial Debt’.
93. Being a profit sharing owner, who in the Mukesh N. Desai Vs. Piyush NCLAT 24.02.2022
event of the success of the Project would Patel & Ors. [CA (AT) (Ins.) No.
receive the residual gain, the amount 780 of 2020]
invested in the land cannot be said to be a
‘Financial Debt’ under section 5(8) of the
Code.
94. The refund of share application money in Kushan Mitra Vs. Amit Goel & NCLAT 16.12.2021
the event of non-allotment of shares Anr. [CA (AT) (Ins.) No. 128 of
attracts interest as provided for under 2021]
section 42(6) of the Companies Act, 2013
and therefore qualifies the essential
ingredients of ‘Financial Debt’ under
section 5(8) of the Code.
95. The refundable security deposit arranged Magnate Industries LLP Vs. NCLT, 06.10.2021
by ‘the Joint Developer’ through a third Safal Developers Pvt. Ltd. [CP Mumbai
entity cannot constitute a ‘financial debt’ (IB) No. 1167/MB-IV/2020]
under section 5(8) of the Code.

Further, the mere fact of dishonouring of

cheques, by itself, cannot be construed as
existence of ‘financial debt’ and ‘default’.
96. Speculative investor, cannot claim status Nidhi Rekhan Vs. Samyak NCLAT 31.01.2022
and benefits as ‘financial creditor’ under Projects Pvt. Ltd. [CA (AT) (Ins.)
explanation (i) of section 5(8)(f) of the No. 1035 of 2020]
Code.
97. Interest per se in any business contract Budhpur Buildcon Pvt. Ltd. Vs. NCLAT 09.09.2022
cannot be termed to make the debt as a Abhay Narayan Manudhane,
financial debt, if it is in the nature of RP of HDIL [CA (AT) (Ins.) No.
liquidated damages or in the nature of 589 of 2021 & I.A. No.
penal interest, which is a result of 1739/2021 & 753/2022]
compensation for breach of contract which
is stipulated for penal interest.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
98. A financial debt is a debt together with Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
interest, if any, which is disbursed against Vs. Union of India & Ors. [WP
the consideration for time value of money. (Civil) Nos. 99, 100, 115, 459,
598, 775, 822, 849, and 1221 of
2018, SLP (Civil) No. 28623 of
2018 and WP (Civil) 37 of 2019]
99. The nature of financial debt would not Priyal Kantilal Patel Vs. IREP NCLAT 01.02.2023
change in respect of application filed on Credit Capital Pvt. Ltd. & Anr.
account of breach of the consent terms in [CA (AT) (Ins.) No. 1423 of 2022]
respect of the original financial debt.
5(13) Insolvency Resolution Process Cost
100. If any cost is incurred towards supply of Dakshin Gujarat VIJ Company NCLAT 08.02.2018
essential services during the period of Ltd. Vs. ABG Shipyard Ltd. &
moratorium, it may be accounted towards Anr. [CA (AT) (Ins.) No. 334 of
the insolvency resolution process costs. 2017]
101. In case where a CoC has not been S3 Electricals and Electronics SC 05.08.2019
appointed as a result of non-initiation of Pvt. Ltd. Vs. Brian Lau & Anr.
the interim resolution process, it is clear [Civil Appeal No. 103 of 2018]
that, whatever the AA fixes as expenses will
be borne by the creditor who moved the
application.
102. The direction requiring the appellant to Newogrowth Credit Pvt. Ltd. NCLAT 10.12.2020
bear 27% of the CIRP cost is in consonance Vs. RP, Bhaskar Marine Services
with and proportionate to the share of the Pvt. Ltd. & Ors. [CA (AT) (Ins.)
appellant, is not arbitrary and No. 1053 of 2020]
unreasonable.
5(14) Insolvency Resolution Process Period
103. It is always open to the NCLT/NCLAT to Quinn Logistics India Pvt. NCLAT 08.05.2018
exclude certain period for the purpose of Ltd. Vs. Mack Soft Tech Pvt. Ltd.
counting the total period of 270 days. The & Ors. [CA (AT) (Ins.) No. 185 of
grounds include the following: (i) If the CIRP 2018]
is stayed by a court of law or the
NCLT/NCLAT/Supreme Court (ii) If no RP is
functioning for one or other reason during
the CIRP (iii) The period between the date
of order of admission/moratorium is
passed and the actual date on which the RP
takes charge for completing the CIRP (iv)
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
On hearing a case, if order is reserved by
the NCLT/NCLAT/Supreme Court and finally
pass order enabling the RP to complete the
CIRP (v) If the CIRP is set aside by the NCLAT
or order of the NCLAT is reversed by the
Supreme Court and CIRP is restored (vi) Any
other circumstances which justifies
exclusion of certain period.
5(20) Operational Creditor
104. The OCs can be classified in three different Standard Chartered Bank Vs. NCLAT 04.07.2019
classes for determining the manner in Satish Kumar Gupta, R.P. of
which the amount is to be distributed to Essar Steel Ltd. & Ors. [CA (AT)
them (as per section 5(21). However, they (Ins.) No. 242 of 2019 and Other
are to be given the same treatment, if appeals]
similarly situated.
105. Custom Duty as a statutory due is only IRK Raju Vs. Immaneni Eswara NCLAT 30.01.2020
operational in nature when it is paid to the Rao & Ors. [CA (AT) (Ins.) No.
relevant authority, and not when it is 1058 of 2019]
repaid to a party that has paid such
statutory authority.
106. It is clear that an OC who has assigned or Cooperative Rabobank U.A. NCLAT 29.04.2019
legally transferred any operational debt to Singapore Branch Vs.
an FC, the assignee or transferee shall be Shailendra Ajmera [CA (AT)
considered as an OC to the extent of such (Ins.) No. 261 of 2018]
assignment or legal transfer.
107. The workmen of a Company come within Suresh Narayan Singh Vs. Tayo NCLAT 26.09.2018
the meaning of an OC in terms of section Rolls Ltd. [CA (AT) (Ins.) No. 112
5(20) r/w section 5(21) of the Code. of 2018]
108. An OC means a person to whom an Innoventive Industries Ltd. Vs. SC 31.08.2017
operational debt is owed, and an ICICI Bank & Anr. [Civil Appeal
operational debt under section 5(21) Nos. 8337-8338 of 2017]
means a claim in respect of provision of
goods or services.
109. A Trade Union or Association of JK Jute Mill Mazdoor Morcha NCLAT 12.09.2017
workmen/employee does not come within Vs. Juggilal Kamlapat Jute Mills
the meaning of OC as no services is Co. Ltd. [CA (AT) (Ins.) No. 82 of
rendered by the Workmen's 2017]
Association/Trade Union to the CD to claim
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
any dues which can be termed to be debt
as defined in sub-section (11) of section 3.
110. There is no embargo for classification of Excel Engineering & Ors. Vs. NCLAT 16.11.2022
the ‘operational creditors’ into separate Mr. Vivek Murlidhar Dabhade
classes for deciding the distribution of & Anr. [CA (AT) (Ins.) No. 85-
money to them. 86 of 2020]
5 (21) Operational Debt
111. The advance amount paid for supply of Andal Bonumalla Vs. Tomato NCLAT 20.08.2020
sugar is not an operational debt. Trading LLP & Anr. [CA (AT)
(Ins.) No. 752 of 2019
112. The dues towards the Government, be it Shree Ram Lime Products Pvt. NCLT, New 22.10.2019
tax on income or on sale of properties, Ltd. Vs. Gee Ispat Pvt. Ltd. [CA - Delhi
would qualify as operational debt and must 666/2019 in (IB)-
be dealt with accordingly. 250(ND)/2017]

113. In case assets seized by the ED were JSW Steel Ltd. Vs. Mahender NCLAT 25.10.2019
purchased out of the proceeds of crime, the Kumar Khandelwal & Ors. [CA
amount as may be generated out of the (AT) (Ins.) No. 957 and other
assets would come within the meaning of appeals]
operational debt payable to the ED for
which it may file claim in terms of the Code.
114. Lease of immovable property cannot be M. Ravindranath Reddy Vs. G. NCLAT 17.01.2020
considered as supply of goods or rendering Kishan & Ors. [CA (AT) (Ins.) No.
of any services. For a debt to be 331 of 2019]
operational, claim must be regarding
provision of goods, services, employment
or the Government dues.
115. Claim arising out of lease of immovable Sudhir Garg Vs. ASG Hospital NCLT, 10.01.2020
property neither falls in the category of Pvt. Ltd. [CP No. (IB)- Jaipur
goods or services including employment 12/9/JPR/2019]
nor is it a debt of repayment of dues arising
under any law.
116. Lease of immovable property cannot be Parmod Yadav & Anr. Vs. Divine NCLT, New 28.09.2017
considered as a supply of goods or Infracon Pvt. Ltd. [IB - No. (IB) Delhi
rendering of any services and thus cannot 229 (ND)/2017]
fall within the definition of operational
debt.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
117. All statutory dues including Income Tax, Pr. Director General of Income NCLAT 20.03.2019
Value Added Tax, etc., come within the Tax (Admn. & TPS) Vs.
meaning of operational debt. Synergies Dooray Automotive
Ltd. & Ors. [CA (AT) (Ins.) No.
205 of 2017 & other appeals]
118. Operational debt would include a claim in Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
respect of the provision of goods or Vs. Union of India & Ors. [WP
services, including employment, or a debt (Civil) Nos. 99, 100, 115, 459,
in respect of payment of dues arising under 598, 775, 822, 849, and 1221 of
any law and payable to the Government or 2018, SLP (Civil) No. 28623 of
any local authority. 2018 and WP (Civil) 37 of 2019]
119. The amount due from the buyer of the Renish Petrochem FZE Vs. NCLT, 31.07.2017
goods, and which is due to the seller and is Ardor Global Pvt. Ltd. [C.P. (I.B) Ahmedaba
guaranteed by the guarantee agreement, is No. 33/9/NCLT/AHM/2017] d
also an operational debt.
120. Transaction of sale of share is an Samskar Financial Services Pvt. NCLT, 21.08.2019
operational debt. Ltd. Vs. Votary Trading Pvt. Ltd. Kolkata
[C.P. (IB) No. 735/KB/2019]
121. The property seized by Kolkata Municipal Kolkata Municipal Corporation HC, 29.01.2021
Corporation (KMC) towards recovery of and Anr. Vs. Union of India and Calcutta
municipal tax dues from CD, can be the Ors. [WPA No.977 of 2020]
subject-matter of the CIRP under the Code
as the claim of KMC had attained finality
and fastened a liability upon the CD, thus
constituting an 'operational debt' under
section 5(21) of the Code.
122. Dues of Central Government / Department Union of India Vs. Vijaykumar NCLAT 13.04.2021
of Telecommunications under the License V. Iyer [CA (AT) (Ins.) No.
Agreement fall within the ambit of 733/2020 with other appeals]
‘operational debt’ under the Code.
123. A ‘claim’ based on an agreement where the South Delhi Municipal NCLT, 08.10.2021
petitioner has appointed the respondent as Corporation Vs. MEP Mumbai
a contractor to collect toll tax from Infrastructure Developers Ltd.
commercial vehicles is not covered under [IA 1670 of 2021 in CP(IB)
the definition of ‘operational debt’ under 246/MB/2021]
section 5(21) of the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
124. The sales tax demand paid by the OC Transit Geo System Integrators NCLT, New 20.10.2021
cannot be claimed as reimbursement from Pvt. Ltd. Vs. Stahl Teeniks Pvt. Delhi
a CD as an ‘operational debt’ as it is neither Ltd. [(IB)-265/ND/2021]
arising out of provisions of goods and
services nor is a claim in respect of
employment nor represents the dues
payable to the Government. So the dues do
not fall within the meaning of section 5(21)
of the Code.
125. Listing fees comes under the ambit of BSE Ltd. Vs. KCCL Plastic Ltd. NCLAT 17.12.2021
regulatory dues and is not ‘operational [CA (AT) (Ins.) No. 134 of 2021]
dues’. Thus it cannot be recovered as an
‘operational debt’.

126. Section 5(21) defines ‘operational debt’ as Consolidated Construction SC 04.02.2022

a “claim in respect of the provision of goods Consortium Ltd. Vs. Hitro
or services”. The operative requirement is Energy Solutions Pvt. Ltd. [Civil
that the claim must bear some nexus with Appeal No. 2839 of 2020]
a provision of goods or services, without
specifying who is to be the supplier or
receiver.

A debt which arises out of advance

payment made to a CD for supply of goods
or services would be considered as an
‘operational debt’.
127. The journal entries not supported by any G.L. Engineering Industries Pvt. NCLAT 02.03.2022
other additional evidence cannot be ‘solely’ Ltd Vs. Supreme Engineering
relied upon to prove that the amount Ltd. [CA (AT) (Ins.) No. 431 of
claimed arises out of ‘supply of goods and 2021]
services’ to fall within the ambit of the
definition of ‘operational debt’.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
128. Granting an exclusive right and license to Somesh Choudhary Vs. Knight NCLAT 18.08.2022
the CD to use, manufacture, sell, distribute Riders Sports Pvt. Ltd. & Ors.
and advertise the licensed products and to [CA (AT) (Ins.) No. 501 of 2021]
use the trademark in association with the
licensed products as well as on packaging,
promotional advertising material has a
direct nexus with the business operations
and sales and also with the actual product
supplied by the CD. The claim in respect of
such ‘goods and services’ is an operational
debt.
5(24) Related Party in relation to a corporate debtor
129. The interchange of the managerial Bank of India Through Its NCLT, 05.10.2021
personnel between various legal entities Authorised Representative Ahmedaba
inter-se without any association with the Chandra Pal Vs. Naren Sheth, d
CD is not a valid basis to hold that such RP for Jaybharat Textiles & Real
parties fall under the category of related Estate Ltd. [IA 296 of 2020 in
party of the CD, though they may be CP(IB) 266 of 2019]
belonging to the same group.
The object of provisions relating to
exclusion of related parties from the CoC is
to maintain the independence of CoC in the
interest of all the stakeholders but that
does not mean that parties who were
related at some point of time and now they
are not related parties, should be excluded
from CoC.
7 Initiation of CIRP by FC
130. The Joint Development Agreement entered Vipul Limited Vs. Solitaire NCLAT 18.08.2020
into, is a contract of reciprocal rights and Buildmart Pvt. Ltd. [CA (AT)
obligations, both parties are admittedly (Ins.) No. 550 of 2020]
‘Joint Development Partners’, who entered
into a consortium of sorts for developing an
integrated township and for any breach of
terms of contract, section 7 application is
not maintainable as the amount cannot be
construed as financial debt as defined
under section 5(8) of the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
131. An application under section 7 admitted by Action Barter Pvt. Ltd. Vs. SREI NCLAT 21.09.2020
the AA being an independent proceeding Equipment Finance Ltd. &Anr.
has to be decided in terms of the provisions [I.A. Nos. 811/2020, 917/2020,
of the Code and the CIRP has to proceed 962/2020 & 1587/2020 in CA
unhindered and notwithstanding pendency (AT) (Ins.) No. 1434 of 2019]
of any other proceedings.
132. Decree holders under UP RERA seeking Sushil Ansal Vs. Ashok Tripathi NCLAT 14.08.2020
execution of decree/recovery of money & Ors. [CA (AT) (Ins.) No. 452 of
due under the Recovery Certificate, cannot 2020]
claim to be allottees of a real estate project
and the application under section 7 is
impermissible. Though decree holder is
included in the definition of ‘creditor’, they
do not fall within the definition of FC and
hence cannot seek initiation of CIRP as FC.
133. There being a continuous cause of action Mack Soft Tech Pvt. Ltd. Vs. NCLAT 21.05.2018
evident from the books of account of the Quinn Logistics India Ltd. [CA
CD wherein liability of loan payable to the (AT) (Ins.) No. 143 of 2017 and
FC is accepted, the application under other appeals]
section 7 cannot be held to be barred by
limitation.
134. The CD is NBFC and being FSP, section 7 Saumil A. Bhavnagri Vs. Nimit NCLAT 21.11.2019
application could not be admitted against Builders & Anr. [CA (AT) (Ins.)
it. No.710 of 2019]
135. The AA exceeded its jurisdiction while Univalue Projects Pvt. Ltd. Vs. HC, 18.08.2020
directing that all FCs should submit The Union of India & Ors. [W.P. Calcutta
information of default of CDs from the IU No. 5595 (W) of 2020 With
while filing applications under section 7. C.A.N. 3347 of 2020 and
This is beyond section 424 of the another appeal]
Companies Act, 2013, and section 7(3)(a) of
the Code r/w rule 4 of AA Rules and
regulation 8 of CIRP Regulations.
136. The SC held that the RBI circular dated 12th Dharani Sugars and Chemicals SC 02.04.2019
February, 2018, by which the RBI Ltd. Vs. Union of India & Ors.
promulgated a revised framework for [Transferred Case (Civil) No. 66
resolution of stressed assets is ultra vires of of 2018 in Transfer Petition
section 35AA of the Banking Regulation Act, (Civil) No. 1399 of 2018 and
1949 and all actions taken under the said other appeals]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
circular which has triggered the CIRP under
section 7 will fall along with the circular.
137. The order of admission by NCLT, which was Sunrise 14 A/S Denmark Vs. SC 03.08.2018
set-aside by the NCLAT, was restored Ravi Mahajan [Civil Appeal Nos.
stating that FC being a foreign company 21794-21795 of 2017]
need not observe the requirement of
section 7(3)(a) for filing of statutory form
and that the application can be filed by an
advocate.
138. If the two CDs collaborate and form an Mamatha Vs. AMB Infrabuild NCLAT 30.11.2018
independent corporate unit entity for Pvt. Ltd. & Ors. [CA (AT) (Ins.)
developing the land and allotting the No. 155 of 2018]
premises to its allottee, the application
under section 7 will be maintainable
against both of them jointly and not
individually against one or other.
139. The time limit of 7 days for removal of Surendra Trading Company Vs. SC 19.09.2017
defects in the application as provided in Juggilal Kamlapat Jute Mills
proviso to sub-section (5) of section 7, is Company Ltd. & Ors. [Civil
directory and not mandatory in nature. Appeal No. 8400 of 2017and
other appeals]
140. The 7 days for rectification of defects is to Palogix Infrastructure Pvt. Ltd NCLAT 20.09.2017
be counted not from the ‘date of the order’ Vs. ICICI Bank Ltd. [CA (AT)
passed by the AA but from the ‘date of (Ins.) No. 30 of 2017 and other
receipt’ of such notice from the AA to appeals]
rectify the defects in the application.
Further, the holidays such as Saturdays,
Sundays and other holidays of the AA are to
be excluded.
141. The filing of an application may not result Essar Steel India Ltd. Vs. HC, Gujarat 17.07.2017
into mechanical admission of application. Reserve Bank of India [Special
The AA in exercise of judicial discretion Civil Application 12434 of 2017]
needs to deal with such application in
accordance with law and based upon facts,
evidence and circumstance placed before
it. The AA is certainly required to extend
hearing and reasonable opportunity to the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
company to explain as to why such an
application should not be entertained.
142. The scheme of section 7 stands in contrast Innoventive Industries Ltd. Vs. SC 31.08.2017
with the scheme under section 8 where an ICICI Bank & Anr. [Civil Appeal
OC is, on the occurrence of a default, to first Nos. 8337-8338 of 2017]
deliver a demand notice of the unpaid debt
to the operational debtor in the manner
provided in section 8(1) of the Code.
143. A perusal of Form – 1 prescribed under AA Bank of India Vs. Tirupati NCLT, New 03.07.2017
Rules would reveal that there is no Infraprojects Pvt. Ltd. [C.P. No. Delhi
requirement specified in any part of the IB-104(PB)/2017]
proforma with regard to power of attorney.
It does not however lead to the conclusion
that there is no requirement of filing a
power of attorney. But then it is a different
matter and would not be hit by the defect
in the proforma. It is not that every defect
is hit by section 7(2) of the Code.
144. Initiation of a CIRP is not an adversary AVON Capital Vs. Tattva & NCLAT 09.08.2018
litigation nor is a money claim. If the Mittal Lifespaces Pvt. Ltd. [CA
application is complete and the AA is (AT) (Ins.) No. 256 of 2017]
satisfied that there is a ‘debt’ and ‘default’
on the part of the CD, the application is to
be admitted.
145. Application under section 7 is not a V. R. Hemantraj Vs. Stanbic NCLAT 29.08.2018
recovery proceeding or a proceeding for Bank Ghana Ltd. & Anr. [CA (AT)
determination of claim on merit, which can (Ins.) No. 213 of 2018]
be decided only by a court of competent
jurisdiction. Application under section 7 or
9 or 10 of the Code being not money claim
or suit and not being an adversarial
litigation, the AA is only required to be
satisfied that there is a ‘debt’ and default
has occurred.
146. In the application filed for commencement V. R. Hemantraj Vs. Stanbic SC 12.10.2018
of CIRP, the AA is not required to get into Bank Ghana Ltd. & Anr. [Civil
the merits of a foreign decree, because the Appeal No. 9980 of 2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
AA under the Code does not have the
powers of a Civil Court.
147. The AA being not a Court of law and as the Naveen Luthra Vs. Bell Finvest NCLAT 29.11.2018
AA does not decide a money claim or suit, (India) Ltd. & Anr. [CA (AT) (Ins.)
it cannot exercise any of the power vested No. 336 of 2017 and other
under sections 3 or 4 of the Usurious Loans appeals]
Act, 1918.
148. When the NCLT receives an application Sree Metaliks Ltd. & Anr. Vs. HC, 07.04.2017
under section 7, it must afford a reasonable Union of India & Anr. [W.P. Calcutta
opportunity of hearing to the CD as section 7144 (W) of 2017]
424 of the Companies Act, 2013, mandates
it to ascertain the existence of default as
claimed by the FC in the application.
149. Section 7 application filed under the Code Forech India Ltd. Vs. Edelweiss SC 22.01.2019
is an independent proceeding and must run Assets Reconstruction Co. Ltd.
its entire course, which has nothing to do [Civil Appeal No. 818 of 2018]
with the pendency of winding up
proceedings before the HC.
150. Once the application under section 7 of the Micro Dynamics Vs. Cosmos NCLAT 12.10.2020
Code, which was the basic edifice for order Cooperative Bank Ltd. & Anr.
of admission, was dismissed and [CA (AT) (Ins.) No. 875 of 2020]
proceedings emanating therefrom and
consequential thereto were closed, the
incidental and ancillary applications will not
survive for further consideration.
151. The AA directed the CD to provide Supertech Township Project NCLAT 18.01.2021
information about the allottees of the Ltd. Vs. Inderpal Singh
project to the respondent for meeting the Khandpur HUF [CA (AT) (Ins.)
threshold criteria to initiate the class No. 17 of 2021]
action. While dismissing the appeal, the
NCLAT observed that no legal right vested
in the CD has been infringed by such
direction and no prejudice can be claimed
by the CD on account of providing such
information. It directed the CD to display
the information about the allottees with
full particulars on its website within two
weeks.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
152. i. The term ‘allotment’ under second Manish Kumar Vs. Union of SC 19.01.2021
proviso to section 7 means allotment in the India & Anr. [Writ Petition (C)
sense of documented booking as No.26 of 2020 with other writ
mentioned in section 11(1)(b) of the Real petitions]
Estate (Regulation and Development) Act,
2016. A person to whom allotment of a
plot, apartment, or a building has been
made is an allottee. The allottee would also
include a person who acquires the
allotment either through sale, transfer or
otherwise. What is required is allotment
qua apartments, and not promised flats as
per a brochure.

ii. The default under section 7 need not be

qua the applicant or applicants. Any
number of applicants, without any amount
being due to them, could move an
application under section 7, if they are
financial creditors (FCs) and there is a
default, even if such default is owed to
none of the applicants but to any other FC.

iii. It does not matter whether a person has

one or more allotments in his name or in
the name of his family members. As long as
there are independent allotments made to
him or his family members, all of them
would qualify as separate allottees.
153. An action under section 7 of the Code could Laxmi Pat Surana Vs. Union SC 26.03.2021
be legitimately invoked against a corporate Bank of India & Anr. [Civil
guarantor concerning guarantee offered by Appeal No. 2734 of 2020]
it in respect of a loan account of the
principal borrower, who had committed
default and is not a “corporate person”.
154. Purely contractual disputes cannot be Ketaki Shah Talati Vs. Mirador NCLT, 02.03.2021
decided by the AA under section 7 of the Constructions Pvt. Ltd. [C.P.(IB) Mumbai
Code in a summary proceedings. 1707/MB/2019]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
155. Any proceeding which is pending before Indus Biotech Pvt. Ltd. Vs. SC 26.03.2021
the AA under section 7 of Code and if the Kotak India Venture (Offshore)
petition is admitted by the AA recording the Fund (earlier known as Kotak
satisfaction with regard to the default and India Venture Ltd.) & Ors.
the debt being due from the CD, any [Arbitration Petition (Civil) No.
application under section 8 of the 48/2019 with another appeal]
Arbitration and Conciliation Act, 1996
made thereafter will not be maintainable.
156. The burden of prima facie proving Rajendra Narottamdas Sheth & SC 30.09.2021
occurrence of the default and that the Anr. Vs. Chandra Prakash Jain &
application filed under section 7 is within Anr. [Civil Appeal No. 4222 of
the period of limitation, is entirely on the 2020]
FC.
157. An FC can simultaneously or one after Kanwar Raj Bhagat Vs. Gujarat NCLAT 11.05.2021
another initiate CIRP against the CD as well Hydrocarbons and Power SEZ
as corporate guarantor for the same debt Ltd. & Anr [CA (AT) (Ins.) No.
and default. 1096 of 2020]
158. The AA is empowered only to verify E S Krishnamurthy & Ors. Vs. SC 14.12.2021
whether a default has occurred or not. Bharath Hi Tech Builders Pvt.
Based upon its decision, the AA must then Ltd. [Civil Appeal No. 3325 of
either admit or reject an application. These 2020]
are the only two courses of action which
are open to the AA in accordance with
section 7(5). The AA cannot compel a party
to the proceedings before it, to settle a
dispute.

159. Application under section 7 of the Code is Bishal Jaiswal Vs. Asset NCLAT 10.12.2021
not akin to a plaint in a civil suit. Reconstruction Company &
Anr. [CA (AT) (Ins.) No. 385 of
The filing of an application under section 7 2020]
in Form-1 is procedural requirement. The
requirement in procedural rule was not to
read in a manner, which may preclude an
affected party from bringing other
materials on records to bring home his
point.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
160. Threshold limit of Rs. 1 crore will be Jumbo Paper Products Vs. NCLAT 04.10.2021
applicable for applications filed under Hansraj Agrofresh Pvt. Ltd. [CA
section 7 or 9 on or after 24.03.2020 even (AT) (Ins.) No. 813 of 2021]
if the debt is of a date earlier than
24.03.2020.

161. The AA is not a ‘court of law’ and that CIRP Drip Capital Inc. Vs. Concord NCLAT 08.11.2021
is not a litigation. The AA, at the time of Creations (India) P. Ltd. [CA
determination as to whether to admit or (AT) (CH) No. 167 of 2021]
reject an application under section 7 of the
Code, is not to take into account the
reasons for the CD’s default.

162. The acceptance of the settlement proposal Ananta Charan Nayak Vs. State NCLAT 10.11.2021
by the FC is a matter entirely in the ambit Bank of India & Ors. [CA (AT)
of the FC and the proceedings before the (Ins.) No. 870 of 2021]
AA should not have been held up and
delayed, waiting for a response by the FC.

The Code does not provide for keeping the

proceedings in abeyance and the
application for admission has to be decided
in a stipulated timeframe. If a settlement
would have been reached, the appellant
would have had recourse to section 12A of
the Code.
163. Debenture holders are FCs under the Code T. Prabhakar Vs. S. Krishnan & NCLAT 03.12.2021
and have a valid and legal right to file Ors. [CA (AT) (CH) (Ins.) No. 217
section 7 application under the Code. of 2021]

164. The petitioner has absolute rights in the Beacon Trusteeship Limited Vs. NCLT, 07.10.2021
mortgaged property and cannot initiate Neptune Ventures and Mumbai
any action under section 7 upon non- Developers Private Limited
payment of dues under the Debenture [CP(IB)993/MB/C-IV/2020]
Trust Deed, when the petitioner has
agreed to recourse and sell the mortgaged
assets and recover the money due.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
165. The AA observed that the IBBI has been Bank of India Vs. B.B Foods Pvt NCLT, 09.11.2021
made respondent in the application when Ltd [ CP No. (IB) 349/ALD/2018] Allahabad
there was absolutely no need for the RP to
do so. Due to such inclusion of IBBI in the
array of parties, the AA had to issue notice
to IBBI although IBBI is not concerned with
the relief sought. AA ordered cost 25000/-
on the RP personally for unnecessary
making the IBBI, as a party.
166. Inter-Corporate Deposits are financial Seaview Merchants Pvt. Ltd. Vs. NCLT, 15.12.2021
debts but in a transaction of a deposit of Ashish Vincon Pvt. Ltd. [C.P (IB) Kolkata
money or a loan, a relationship between No. 2011/KB/2019]
the parties must come into existence. Mere
transfer of money from one account to
another would not constitute
loan/deposits unless the intention of the
parties is considered and substantiated
with valid documents.
167. If the ‘CIRP’ is initiated by admitting the Vallal RCK Vs. Siva Industries NCLAT 28.01.2022
application under section 7 or 9 or 10, it and Holdings Ltd. (In
cannot be set aside or withdrawn except Liquidation) & Anr. [CA (AT)
for any illegality, to be exhibited or if it is (CH) (Ins.) No. 211 & 212/2021]
without jurisdiction or for some other
justiciable ground.

Just because a promoter desires to pay all

dues including the default amount, cannot
be a ground to set aside the CIRP.

168. Mere filing of the proceedings under Jasani Realty Pvt. Ltd. Vs. Vijay HC 25.04.2022
section 7 of the Code cannot be treated as Corporation [Commercial
an embargo on the court exercising Arbitration Application (L) No.
jurisdiction under section 11 of the 1242 of 2022]
Arbitration and Conciliation Act, 1996.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
169. At the stage of admission of the Rajesh Kedia Vs. Phoenix ARC NCLAT 11.04.2022
application, the only requirement is that Pvt. Ltd. [CA (AT) (Ins.) No. 996
the minimum outstanding debt should be of 2021]
more than the threshold amount provided
for under the Code. The actual amount of
claim is to be ascertained by the RP after
collating the claims and their verification
which comes at a later stage.
170. In case the record of IU shows that there is Vipul Himatlal Shah & Anr. Vs. NCLAT 18.05.2022
a debt which is in default, the AA or the Teco Industries [CA (AT) (Ins.)
Appellate Authority are not required to No. 470 of 2022]
further examine the record maintained by
the IU.
171. Section 7(5)(a) of the Code confers Vidarbha Industries Power Ltd. SC 12.07.2022
discretionary power on the AA to admit the Vs. Axis Bank Ltd. [Civil Appeal
application of the FC. Considering the facts No. 4633 of 2021]
and circumstances including the overall
financial health and viability of the CD, the
AA can admit, reject or keep the admission
in abeyance. &
and

On review, the SC had observed that Axis Bank Ltd. Vs. Vidarbha
“observations in judgments are not to be Industries Power Ltd. [Review
read as provisions of statute. Judicial Petition (Civil) No. 1043 of 2022
utterances and/or pronouncements are in in Civil Appeal No. 4633 of 22.09.2022
the setting of the facts of a particular case.” 2021]
172. Merely because there is a ‘debt’ and Ocean Deity Investment NCLAT 08.09.2022
‘default’, it cannot be construed that a Holdings Ltd., PCC Vs. Suraksha
section 7 application is required to be Asset Reconstruction Ltd. and
admitted. Anr. [CA (AT) (Ins.) No. 795 of
2021 & other IAs]
173. An appeal being the continuation of Kotak Mahindra Bank Ltd. Vs. SC 05.08.2022
original proceedings, the provision of Kew Precision Parts Pvt. Ltd. &
section 7(5)(b) of the Code, would be Ors. [Civil Appeal No. 2176 of
attracted. 2020]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
174. FC can proceed against the guarantor K. Paramasivam Vs. The Karur SC 06.09.2022
without first suing the principal borrower. Vysya Bank Ltd. & Anr. [Civil
Appeal No. 9286 of 2019]
175. A group of FCs can converge and join hands Vishnu Oil Mill Pvt. Ltd. Vs. HC, 07.07.2022
to touch the threshold limit, under section Union of India & Ors. [D.B. Civil Rajasthan
7 of the Code. Writ Petition No. 2507/2022]

8 Insolvency Resolution by OC- Demand Notice

176. The CD did not raise the dispute before the Gaurang Nipinbhai Nagarsheth NCLAT 20.08.2020
statutory notice and the dispute raised in Vs. POSCO - India Pune
reply to the application does not require Processing Center Pvt. Ltd. &
any investigation. Such dispute is a patently Anr. [CA (AT) (Ins.) No. 214 of
feeble legal argument and is not supported 2020]
by evidence.
177. A dispute must truly exist in facts and Vishal Vijay Kalantri Vs. DBM SC 20.07.2020
should not be spurious, hypothetical and Geotechnics & Constructions
illusory. Pvt. Ltd. & Anr. [Civil Appeal
No. 2730 of 2020]
178. The expression ‘existence of a dispute, if Kuntal Construction Pvt. Ltd. NCLAT 04.09.2020
any’, infers that a dispute shall not only be Vs. Bharat Hotels Ltd. [CA (AT)
limited to instances specified in the (Ins.) No. 542 of 2020]
definition as provided under section 5(6) of
the Code, as it has far arms, apart from
pending Suit or Arbitration.
179. The moment there is pre-existence of a Innoventive Industries Ltd. Vs. SC 31.08.2017
dispute, the OC gets out of the clutches of ICICI Bank & Anr. [Civil Appeal
the Code. Nos. 8337-8338 of 2017]
180. The expression ‘an operational creditor Macquarie Bank Limited Vs. SC 15.12.2017
may on the occurrence of a default deliver Shilpi Cable Technologies Ltd.
a demand notice’ under section 8 of the [Civil Appeal No. 15135 of 2017
Code must be read as including an OCs and other appeals]
authorised agent and lawyer, as has been
fleshed out in Forms 3 and 5 appended to
the AA Rules.
181. So long as a dispute truly exists in fact and Mobilox Innovations Pvt. Ltd. SC 21.09.2017
is not spurious, hypothetical or illusory, the Vs. Kirusa Software Pvt. Ltd.
AA has to reject the application. [Civil Appeal No.9405 of 2017
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
182. OCs cannot use the Code either K. Kishan Vs. Vijay Nirman SC 14.08.2018
prematurely or for extraneous Company Pvt. Ltd. [Civil Appeal
considerations or as a substitute for debt Nos.21824 & 21825 of 2017]
enforcement procedures.
183. Pendency of the case under section Sudhi Sachdev Vs. APPL NCLAT 13.11.2018
138/141 of the Negotiable Instruments Act, Industries Ltd. [CA (AT) (Ins.)
1881, even if accepted as recovery No. 623 of 2018]
proceeding, cannot be held to be a dispute
pending before a court of law. Such
pendency actually amounts to admission of
debt and not an existence of dispute.
184. The legislative intent of issuance of demand Prajna Prakash Nayak Vs. ASAP NCLAT 11.07.2018
notice under section 8(1) is not a mere Info Systems Pvt. Ltd. &Anr. [CA
formality but a mandatory provision. (AT) (Ins.) No. 196 of 2018]
185. Due to the demand notice not being served Era Infra Engineering Ltd. Vs. NCLAT 03.05.2017
by the OC, the NCLAT quashed all orders, Prideco Commercial Projects
interim arrangement, moratorium, Pvt. Ltd. [CA (AT) (Ins.) No. 31 of
appointment of IRP, as declared earlier by 2017]
AA.
186. The CD can show and satisfy the AA that a Neha Himatsingka & Anr. Vs. NCLAT 30.11.2018
default has not occurred in the sense that Himatsingka Resorts Pvt. Ltd. &
the debt, which may also include a disputed Anr. [CA (AT) (Ins.) No. 201 and
claim, is not due or payable in law or in fact. another appeal]
187. The OC had a relief open under the MSME iValue Advisors Pvt. Ltd. Vs. NCLAT 13.01.2020
Act and utilising the same does not mean Srinagar Banihal Expressway
that there is a pre-existing dispute. The Ltd. [CA (AT) (Ins.) No. 1142 of
context of the word ‘dispute’ in section 18 2019]
of the MSME Act takes colour from section
17 thereof and is different from the context
of section 5(6) read with section 8 of the
Code.
188. Since arbitration proceedings u/s 37 of CG Power & Industrial Solutions NCLT, 16.02.2018
Arbitration and Conciliation Act, 1996, on Ltd. Vs ACC Ltd. [CP No. 1681/IB Mumbai
the same subject matter was pending, the &C/2017]
AA dismissed the application holding that
the dispute has already been in pre-
existence in between the petitioner and the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
CD even before section 8 notice was issued
by the petitioner.
189. A mistake in a demand notice does not Rajendra Bhai Panchal Vs. Jay NCLAT 20.10.2020
necessarily mean it is defective, and if a CD Manak Steels & Anr. [CA (AT)
wants to question the validity of the (Ins.) No. 592 of 2020]
demand it must show that a prejudice was
suffered as a result of such defect.
190. If the CD did not choose to appear in Ravinder Kumar Kalra (Director NCLAT 01.02.2021
response to the notice issued upon it at the of Suspended Board of
pre-admission stage and did not take stand Evershine Solvex Pvt. Ltd.) Vs.
as regards a pre-existing dispute qua the Ricela Health Foods Ltd. & Ors.
operational debt, then it cannot be said [CA (AT) (Ins.) No. 54 of 2020]
that no opportunity of being heard was
provided to it.
191. As the arbitration was invoked after the Naresh Sevantilal Shah Vs. NCLAT 19.01.2021
service of the first demand notice, the AA Malharshanti Enterprises &
rightly concluded that there was no pre- Anr. [CA (AT) (Ins.) No. 415 of
existing dispute prior to the demand notice, 2020]
in terms of section 8 of the Code preventing
the initiation of CIRP.
192. In case of a CD who refuses to accept the D. Srinivasa Rao Vs. Vaishnovi NCLAT 05.01.2021
delivery of notice under section 8 of the Infratech Ltd. [CA (AT) (Ins.) No.
Code, it would not be justified to say that 880 of 2020]
the notice has not been served on the CD.
193. Mere fact that reply to notice under section Brand Realty Services Ltd. Vs. NCLAT 10.03.2022
8(1) having not been given within 10 days Sir John Bakeries India Pvt. Ltd.
or no reply to demand notice having been [CA (AT) (Ins.) No.958 of 2020]
filed by the CD, does not preclude the CD to
bring relevant materials before the AA to
establish that there are pre-existing dispute
which may lead to the rejection of section
9 application.
194. An operational creditor can issue a notice in Consolidated Construction SC 04.02.2022
relation to an operational debt either Consortium Ltd. Vs. Hitro
through a demand notice or an invoice. As Energy Solutions Pvt. Ltd. [Civil
such, the presence of an invoice (for having Appeal No. 2839 of 2020]
supplied goods or services) is not a sine qua
non, since a demand notice can also be
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
issued on the basis of other documents
which prove the existence of the debt.

195. After the transfer of winding up Rajeev Srivastava Vs. Ahluwalia NCLAT 21.02.2023
proceedings as per Companies (Transfer of Contracts (India) Limited and
Pending Proceedings) Rules, 2016 read Ors. [CA (AT) (Ins.) No. 976 of
with section 434 of the Companies Act, 2022]
2013, if the winding up petition has been
filed on the ground that the company is
unable to pay its debt, notice under section
8 of the Code is not necessary.
9 Application for initiation of CIRP by OC
196. Except the CD, no other party has the right Damont Developers Pvt. Ltd. NCLAT 24.04.2019
to intervene at the stage of admission of an Vs. Bank of Baroda & Anr. [CA
application under section 7 or 9 of the (AT) (Ins.) No. 436-437 of 2019]
Code.
197. Non-payment of ‘LTC’ and ‘EL Encashment’ Kishore K. Lonkar Vs. Hindustan NCLAT 10.05.2022
dues, is not a ground to initiate CIRP. Antibiotics Ltd. [CA (AT) (Ins.)
No. 934 of 2021]
198. The AA is empowered to restore the name Hemang Phopalia Vs. The NCLAT 05.09.2019
of the Company and all other persons in Greater Bombay Co-operative
their respective position for the purpose of Bank Ltd. & Anr. [CA (AT) (Ins.)
initiation of CIRP under sections 7 and 9 of No. 765 of 2019]
the Code based on the application, if filed
by an FC or OC or workman within twenty
years from the date the name of the
Company is struck off under sub-section (5)
of section 248 of the Companies Act, 2013.
199. While admitting an application under Shashikant Thakar Vs. Windsor NCLT, 04.09.2020
section 9 of the Code, the AA directed the Paper Pvt. Ltd. [CP(IB)No. Ahmedaba
OC to pay an advance of Rs. 25,000/- to the 701/9/NCLT/AHM/2019] d
IRP within two weeks from the date of
receipt of the order, for the purpose of
smooth conduct of the CIRP and that the
IRP has to file a proof of receipt of such
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
amount to the AA with the First Progress
Report.
200. Starting of CIRP against a functional Vinod Mittal Vs. Rays Power NCLAT 18.11.2019
company is a serious matter and parties Experts & Anr. [CA (AT) (Ins.)
cannot be allowed to play hide and seek. A No. 851 of 2019]
cost of Rs. 5 lakh was imposed on the OC.
201. CIRP is not a ‘suit’, a ‘litigation’ or a ‘money Excel Metal Processors Ltd. Vs. NCLAT 21.08.2019
claim’ for any litigation and no one is selling Benteler Trading International
or buying the CD a ‘resolution plan’. It is not GMBH and Anr. [CA (AT) (Ins.)
an auction or a recovery or liquidation. It is No. 782 of 2019]
a resolution process so that the CD does
not default on dues.
202. Once an application under sections 7 or 9 is NUI Pulp and Paper Industries NCLAT 17.07.2019
filed, it is not necessary for the AA to await Pvt. Ltd. Vs. Roxcel Trading
hearing of the parties for passing order of GMBH [CA (AT) (Ins.) No. 664 of
moratorium under section 14 of the Code. 2019]
To ensure that one or other party may not
abuse the process or for meeting the ends
of justice, it is always open to the AA to pass
appropriate interim order.
203. The applicability of Form 3 or Form 4 under Neeraj Jain Vs. Cloudwalker NCLAT 24.02.2020
of the AA Rules depends on whether Streaming Technologies Pvt.
invoices were generated during the course Ltd. & Anr. [CA (AT) (Ins.) No.
of transaction or not. Further, a copy of 1354 of 2019]
invoice is not mandatory if the demand
notice is issued in Form 3 provided the
documents to prove the existence of
operational debt and the amount in default
is attached with the application. Also,
submission of a copy of the invoice along
with the application in Form 5 is not a
mandatory requirement, if demand notice
is delivered in Form 3 and documents to
prove the existence of operational debt
and the amount in default is attached with
the application.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
204. Unless the decree of a foreign court and Peter Johnson John (Employee) NCLAT 03.07.2019
decretal amount is adjudicated upon by a Vs. KEC International Ltd. [CA
Civil Court as a legally payable claim, the (AT) (Ins.) No. 188 of 2019]
same would not constitute a debt in the
hands of OC and unless the debt is
crystallized and payable in law, the issue of
default would not be attracted.
205. A copy of the certificate required under Macquarie Bank Ltd. Vs. Shilpi SC 15.12.2017
section 9(3)(c) of the Code Cable Technologies Ltd. [Civil
from the financial institution maintaining Appeal No. 15135 of 2017 and
accounts of the OC confirming that there is other appeals]
no payment of an unpaid operational debt
by the CD is certainly not a
condition precedent to triggering
the insolvency process under the Code.
206. The definition of the word ‘dispute’ is not Annapurna Infrastructure Pvt. NCLT, New 24.03.2017
exhaustive but is, in fact illustrative. In Ltd. & Ors Vs. Soril Infra Delhi
other words, a CD is not left with the only Resources Ltd. [C.P. No. (IB)-
option of showing the existence of dispute 22(PB)/2017]
by way of a pending suit, arbitration or to
show the breach of representation or
warranty. The CD would be well within its
right to show that ‘goods’ and services
were not supplied at all or the supply was
far from satisfactory in case of demand
raised by an OC. Hence, a CD would be well
within its rights to reject the demand on
any sustainable grounds. It would
therefore, depend on the facts and
circumstances of each case.
207. In view of Rule 8 of AA Rules, it was open to Mother Pride Dairy India Pvt. NCLAT 13.07.2017
the OC to withdraw the application under Ltd. Vs. Portrait Advertising &
section 9 before its admission but once it Marketing Pvt. Ltd. [CA (AT)
was admitted, it cannot be withdrawn even (Ins.) No. 94 of 2017]
by the OC, as other creditors are entitled to
raise claim pursuant to public
announcement under section 15 read with
section 18 of the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
208. The ‘operational debt’ under the Code is a Vinod Awasthy Vs. AMR NCLT, New 20.02.2017
claim in respect of provision of goods or Infrastructures Ltd. [C.P No. Delhi
services, including dues on account of (IB)-10 (PB)/2017]
employment or a debt in respect of
repayment of dues arising under any law
for the time being in force and payable to
the Central/State Government/local
authority. Hence, it is confined to four
categories like goods, services,
employment and the Government dues.
209. Since the OC has not submitted the Transparent Technologies Pvt. NCLAT 25.10.2017
information as required for admission of Ltd. Vs. Multi Trade [CA (AT)
application under section 9 before the AA, (Ins.) No. 207 of 2017]
and in the absence of non-supply of
requisite information in terms of Rule 5 of
the AA Rules, the application cannot be
treated as an application under section 9
for initiation of CIRP against the CD.
210. A dispute could be proved by showing that One Coat Plaster Vs. Ambience NCLT, New 01.03.2017
a suit has been filed or arbitration is Pvt. Ltd. [CA No. (I.B.) Delhi
pending. 07/PB/2017 and [CA (I.B.) No.
08/PB/2017]
211. The OC had no account in India and it was Rio Glass Solar SA Vs. Shriram NCLT, 10.08.2017
not possible to produce a certificate from EPC Ltd. [CP/537/(IB)/CB/2017] Chennai
any bank in India in terms of definition of
‘financial institution’ in section 3(14) of the
Code. The AA observed that this
interpretation will render the provisions of
the Code otiose and the purpose and object
of the legislation would be defeated.
212. Section 16G(1)(c) of the Tea Act, 1953, A.J. Agrochem Vs. Duncans NCLAT 20.06.2019
relates to winding up, while section 9 of the Industries Ltd. [CA (AT) (Ins.)
Code is for initiation of CIRP to ensure No. 710 of 2018]
revival and continuation of the CD.
Therefore, these provisions occupy
different fields. Accordingly, no permission
of the Central Government is required for
initiation of CIRP of the CD in terms of
section 16G (1) of the Tea Act, 1953.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
213. As the amount is due from the partnership Gammon India Ltd. Vs. NCLAT 19.12.2018
firm, application under section 9 is not Neelkanth Mansions &
maintainable against one of the members Infrastructure Pvt. Ltd. [CA (AT)
of the partnership firm. (Ins.) No. 698 of 2018]
214. Since money was paid as advance for Roma Infrastructures India Pvt. NCLAT 22.04.2019
supply of goods but the goods were not Ltd. Vs. A.S. Iron & Steel (I) Pvt.
supplied, the payment cannot be Ltd. [CA (AT) (Ins.) No. 223 of
considered to be an ‘operational debt’ and 2019]
hence, application under section 9 was not
maintainable.
215. ‘Proceedings’ under section 138 of the Shailendra Sharma Vs. Ercon NCLAT 13.01.2021
Negotiable Instruments Act, 1881 as well as Composites & Ors. [CA (AT)
Order 37 of the Code of Civil Procedure, (Ins.) No. 159 of 2020]
1908, will not prohibit an application under
section 9 of the Code.
216. Dismissal of an application under section 9 Silvassa Cement Products Pvt. NCLAT 22.01.2021
of Code as being non-maintainable for a Ltd. Vs. Noor India Buildcon
technical defect such as incomplete Form 5, Pvt. Ltd. [CA (AT) (Ins.) No. 675
is not warranted. of 2020]
217. The SC upheld the direction of NCLAT which Rajkumar Brothers and SC 22.01.2021
ordered OC to pay the CIRP costs and fees Production Pvt. Ltd. Vs. Harish
of the IRP/RP, after the dismissal of its Amilineni Shareholder and
section 9 application by NCLAT. erstwhile Director of Amilionn
Technologies Pvt. Ltd. & Anr.
[Civil Appeal No. 4044 of 2020]
218. The CD is a healthy company, not Anoop Kumar Chhawchharia NCLAT 26.07.2021
substantiated by the corresponding Vs. Emgreen Impex Ltd. & Anr.
balance sheet, cannot be a sole basis to [CA (AT) (Ins.) No. 350 of 2021]
substantiate that it does not require to go
to CIRP. High turnover with positive net
worth may reflect good fund flow but it
does not substantiate a good cash flow.
219. The CD calling the representative of the OC State of West Bengal Vs. Keshav NCLAT 08.12.2021
with all the papers to settle the dispute Park Private Ltd. & Anr. [CA
cannot be considered as an Appeal (AT) (Ins.) No.330-331
acknowledgement of debt in terms of of 2020]
section 18 the Limitation Act, 1963.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
220. The Code is not a recovery mechanism to BSE Ltd. Vs. Asahi NCLAT 21.12.2021
recover dues of listing fees etc. The code is Infrastructure & Projects Ltd.
not to be resorted to for recovery of such [CA (AT) (Ins.) No.346 of 2019]
dues from creditors.

221. A mediation order and dishonoured Ravi Iron Ltd. Vs. Jia Lal Kishori NCLAT 08.02.2022
cheques shall not give extension of the Lal & Ors. [CA (AT) (Ins.) No. 122
limitation for the application under section of 2022]
9 of the Code.

222. An application filed by an OC under section Mukul Agarwal Vs. Royale NCLAT 30.03.2022
9 of the Code cannot be said to be non- Resinex Pvt. Ltd. & Anr. [CA
maintainable on the ground that CD is a (AT) (Ins.) No.777 of 2020]
going concern.
223. CIRP under section 9 of the Code cannot be Amitabh Roy Vs. Master NCLAT 18.05.2022
initiated on non-payment of the TDS Development Management
amount by the CD. (India) Pvt. Ltd. & Anr. [CA (AT)
(Ins.) No. 274 of 2022]
224. For application under section 9 of the Code, Mr. Prashat Agarwal Vs. Vikash NCLAT 15.07.2022
the interest component can be included Parasrampuria & Anr. [CA (AT)
with the principal debt to arrive at the (Ins.) No. 690 of 2022]
default threshold, if the interest payment
for delay is stipulated in the invoice.
225. Section 9 application is not a suit and the Rourkela Steel Syndicate Vs. NCLAT 06.02.2023
provisions of the section 69(2) of the Indian Metistech Fabricators Pvt. Ltd.
Partnership Act, 1932 are not attracted in [CA (AT) (Ins.) No. 924 of 2022]
respect of such application.
10 Initiation of CIRP by Corporate Applicant
226. Since the applicant was not a director and Neesa Infrastructure Ltd. Vs. NCLT, 17.09.2020
was disqualified under section 164 of the State Bank of India & Ors. [C.P. Ahmedaba
Companies Act, 2013, he had no authority (I.B.) 61/10/NCLT/AHM/2018] d
to file the application.
227. The IRP moved the AA stating that the Alpfly Private Ltd. Vs. Ravi Kant NCLT, New 30.09.2019
application filed by the CD under section 10 Gupta & Ors. [CA No. 448-C/3- Delhi
of the Code was based on fraud and non- ND of 2019 in C.P. IB No. in
disclosure of material particulars. While 358/ND/2018]
holding that the application had been
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
actuated by fraudulent and malicious
intent, the order of admission and initiation
of CIRP was recalled. The corporate veil was
also pierced to identify the persons behind
fraudulent initiation of CIRP.
228. Section 10 does not empower the AA to go Unigreen Global Pvt. Ltd. Vs. NCLAT 01.12.2017
beyond the records as prescribed under Punjab National Bank & Ors.
section 10 and the information as required [CA (AT) (Ins.) No. 81 of 2017]
to be submitted in Form 6 of the AA Rules,
subject to ineligibility prescribed under
section 11.
229. The shareholder has a right to decide Export-Import Bank of India & NCLAT 04.12.2018
whether approving or disapproving the Anr. Vs. Astonfield Solar
decision be proceeded with the CIRP under (Gujarat) Pvt. Ltd. & Anr. [CA
section 10 of the Code. (AT) (Ins.) No. 754 of 2018]
230. CIRP was ordered to speed up preferably Amit Spinning Industries Ltd. NCLT, New 01.08.2017
within a period of 100 days as the [IB-131 (PB)/2017] Delhi
Corporate Applicant had already availed
the moratorium as provided under section
22(1) of the Sick Industrial Companies
(Special Provisions) Act, 1985.
231. An order of CIRP under section 10 cannot Prithivraj Spinning Mill Pvt. Ltd. NCLT, 09.12.2020
be passed, as the applicant obtained a fresh Vs. Indian Overseas Bank, Chennai
certificate of incorporation as well as new Coimbatore & Ors.
registered office address, and the name of [IBA/120/2020]
CD as appearing in the application is not in
existence. It is necessary to relook the
provisions of section 10 and tighten the
same to avoid any further misuse. If a
company chooses to file application under
section 10, the company ought to maintain
a status quo as on the date of filing of the
application and this status quo shall not
prevent the creditors and others from
proceeding against it, till the disposal of the
application by the AA.
10A Suspension of initiation of CIRP
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
232. The Explanation given under section 10A Siemens Gamesa Renewable NCLT, 09.07.2020
reinforces the retrospectivity in the Power Pvt. Ltd. Vs. Ramesh Chennai
applicability of section 10A and because of Kymal [IA/395/2020 in
the applicability of the newly inserted IBA/215/2020]
section, the primary application under
section 9 cannot be proceeded with as the
date of default was beyond the prescribed
date under the section.
233. The substantive part of section 10A is to be Ramesh Kymal Vs. Siemens SC 09.02.2021
construed harmoniously with the first Gamesa Renewable Power Pvt.
proviso and the explanation. Reading the Ltd. [Civil Appeal No. 4050 of
provisions together, it is evident that 2020]
Parliament intended to impose a bar on the
filing of applications for the
commencement of CIRP in respect of a CD
for a default occurring on or after March
25, 2020. The retrospective bar on the filing
of applications for the commencement of
CIRP during the stipulated period does not
extinguish the debt owed by the CD or the
right of creditors to recover it.

The decision of the NCLAT was upheld that

the bar on filing application for initiation of
CIRP applies to defaults committed after
March 25, 2020 though such application
was filed after March 25, 2020 but before
June 5, 2020.

11 Persons not entitled to make application

234. Since the HC already admitted the winding Innoventive Industries Ltd. Vs. NCLAT 09.02.2018
up proceedings and ordered for winding up Kumar Motors Pvt. Ltd. [CA (AT)
of the CD, therefore the question of (Ins.) No. 181 of 2017]
initiation of CIRP against same CD does not
arise.
235. Two parallel insolvency proceedings cannot Jai Ambe Enterprise Vs. S.N. NCLT, 06.02.2018
run against a CD. Plumbing Pvt. Ltd. [MA Mumbai
78/2018 in CP
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
1268/I&BC/NCLT/MB/
MAH/2017]
236. CD under liquidation is not entitled to make
Abhay N. Manudhane Vs. NCLAT 01.10.2019
an application to initiate CIRP in terms ofGupta Coal India Pvt. Ltd. [CA
section 11(d). (AT) (Ins.) No. 786 of 2019]
237. Section 11 is of limited application and only
Forech India Ltd. Vs. Edelweiss SC 22.01.2019
bars a CD from initiating an application Assets Reconstruction Co. Ltd.
under section 10 of the Code in respect of [Civil Appeal No. 818 of 2018]
whom a liquidation order has been made.
From a reading of the section, it does not
follow that until a liquidation order has
been made against the CD, an insolvency
application may be filed under section 7 or
9 of the Code.
238. The intention of the legislature was always Manish Kumar Vs. Union of SC 19.01.2021
to target the CD only insofar as it purported India & Anr. [Writ
to prohibit application by the CD against Petition(C)No.26 of 2020 with
itself, to prevent abuse of the provisions of other writ petitions]
the Code. It could never had been the
intention to create an obstacle in the path
of the CD, in any of the circumstances
contained in section 11, from maximizing
its assets by trying to recover the liabilities
due to it from others.
12 Time-limit for completion of insolvency resolution process
239. The matter was admitted on 16.08.2017 Velamur Varadan Anand Vs. NCLAT 16.05.2018
and on intimation, the RP took charge on Union Bank of India & Anr. [CA
14.09.2017. Accordingly, NCLAT directed (AT) (Ins.) No. 161 of 2018]
AA to exclude the 30 days for the purpose
of counting the period of CIRP.
240. The resolution plan, which had consumed Committee of Creditors of SC 24.09.2019
the time available under section 12 of the Amtek Auto Ltd. Vs. Dinkar T.
Code, has failed owing to nonfulfillment of Venkatsubramanian & Ors.
the commitment by Liberty House. [Civil Appeal No(s). 6707/2019
However, the SC noted that the Insolvency and another appeal]
and Bankruptcy Code (Amendment) Act,
2019 (w.e.f. 16.08.2019) permits resolution
process to be completed within 90 days
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
from the date of the commencement of the
Amendment Act. Accordingly, it permitted
the RP to invite fresh offers within a period
of 21 days.
241. The NCLAT was not inclined to set-aside the Sunil S. Kakkad Vs. Parag Sheth NCLAT 19.11.2019
order for re-starting the CIRP, even if there & Anr. [CA (AT) (Ins.) Nos. 1260-
was some infirmity in the impugned order 1261 of 2019 and another
during the resolution process as almost two appeal]
years had elapsed since the time CIRP was
initiated.
242. Time is of essence in seeing whether the Innoventive Industries Ltd. Vs. SC 31.08.2017
corporate body can be put back on its feet, ICICI Bank & Anr. [Civil Appeal
so as to stave off liquidation. Nos. 8337-8338 of 2017]
243. The statutory scheme laying down time Surendra Trading Company Vs. SC 19.09.2017
limits sends a clear message that time is the Juggilal Kamlapat Jute Mills
essence of the Code. Company Ltd. & Ors. [Civil
Appeal No. 8400 of 2017 and
other appeals]
244. It was AA’s duty to extend the period to find Quantum Limited Vs. Indus NCLAT 20.02.2018
out whether a suitable resolution plan is to Finance Corporation Ltd. [CA
be approved instead of going for (AT) (Ins.) No. 35 of 2018]
liquidation, which is the last recourse on
failure of resolution process.
245. The AA can extend the time limit provided RBL Bank Ltd. Vs. MBL NCLT, 18.04.2018
under section 12 of the Code if it is satisfied Infrastructures Ltd. [CA (IB) Kolkata
that grave injustice would be caused in case Nos. 270/KB/2017,
the prayer of extension is made for no fault 238/KB/2018, 288/KB/2018 in
of the applicant. CP (IB) No. 170/KB/2017]
246. It is always open to the AA/Appellate Quinn Logistics India Pvt. Ltd. NCLAT 08.05.2018
Tribunal to exclude certain period for the Vs. Mack Soft Tech Pvt. Ltd. &
purpose of counting the total period of 270 Ors. [CA (AT) (Ins.) No. 185 of
days, if the facts and circumstances justify 2018]
exclusion, in unforeseen circumstances.
247. Section 12, construed in the light of the Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
object sought to be achieved by the Code, Satish Kumar Gupta & Ors.
and in the light of the consequence [Civil Appeal Nos. 9402-9405 of
provided by section 33, makes it clear that 2018 and other appeals]
the periods mentioned are mandatory and
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
cannot be extended. Regulation 40A of the
CIRP Regulations presents a model timeline
of the CIRP, and it is of utmost importance
for all authorities concerned to follow this
model timeline as closely as possible.
248. While leaving the provision otherwise Committee of Creditors of Essar SC 15.11.2019
intact, the term “mandatorily” was struck Steel India Ltd. Vs. Satish
down from second proviso to section 12(3), Kumar Gupta & Ors. [Civil
as being manifestly arbitrary under Article Appeal No. 8766-67 of 2019
14 of the Constitution and as being with other Civil Appeals
unreasonable restriction on the litigant’s andWP(C)s]
right to carry on business under Article
19(1)(g) of the Constitution. The effect of
this declaration is that ordinarily the time
taken in relation to the CIRP must be
completed within the outer limit of 330
days from the insolvency commencement
date, including extensions and the time
taken in legal proceedings. If the delay or a
large part thereof is attributable to the
tardy process of the AA and/or the NCLAT
itself, it may be open in such cases for the
AA and/or NCLAT to extend time beyond
330 days.
249. CIRP must be conducted and carried on in Maharashtra Seamless Ltd. Vs. NCLAT 07.12.2020
accordance with the Code which prescribes State Bank of India & Ors. [CA
timelines. Although withdrawal of the (AT) (Ins.) No. 1039 of 2020]
applications based on the consideration by
the CoC and settlement are part of the
same process, but whatever emerges s
should materialise within the prescribed
timelines.
250. The time period can very well be extended IDBI Bank Ltd. Vs. Cyclo NCLT, 07.10.2020
beyond 330 days. It further observed that it Transmissions Ltd. [IA No. 1053 Mumbai
will be in the best interest of the CD as well of 2020 in CP(IB) No. 381 of
as the stakeholders if the resolution plan is 2018]
considered, liquidation being the last
resort.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
251. The extension of time period enabling for Abhilash Lal, RP of Sevenhills NCLT, 06.10.2020
completion of CIRP would be in the interest Healthcare Pvt. Ltd. [IA No. 137 Amravati
of all stakeholders, to allow the completion of 2020 in CP(IB) No.
of CIRP rather than going into liquidation of 282/7/HDB/2018]
the CD which should only be initiated as a
last resort. It approved the extension of the
period by 90 days.
252. The extension of CIRP period beyond 330 Committee of Creditors of NCLAT 02.02.2021
days was allowed to prevent the CD from Trading Engineers International
being pushed into liquidation and a viable Ltd. Vs. Trading Engineers
resolution plan being approved by the CoC. International Ltd. through RP
[CA (AT) (Ins.) No. 61 of 2021]

253. RP should file an application to the AA for George Vinci Thomas & Ors. Vs. NCLT, Kochi 12.02.2021
extension of the period of the CIRP, only if Sasitharan Ramaswamy,
instructed to do so by a resolution passed Resolution Professional in the
at a meeting of the CoC by a vote of 75% of matter of India Techs Ltd. &
the voting shares. Ors. [IA/218/KOB/2020 &
MA/22/KOB/2020 in
TIBA/14/KOB/2019]
254. The approved resolution plan has to be Committee of Creditors of SC 01.12.2021
implemented at the earliest and that is the Amtek Auto Limited through
mandate under the Code. Corporation Bank Vs. Dinkar T.
Venkatsubramanian and Ors.
The entire resolution process has to be [Civil Appeal No. 6707 of 2019]
completed within the period stipulated
under section 12 and any deviation would
defeat the object and purpose of providing
such time limit.
255. Where CIRP is pending and not completed Committee of Creditors of NCLAT 25.10.2021
within 330 days within which the resolution Meenakshi Energy Ltd. Vs.
of stressed asset is to take place, only in an Consortium of Prudent ARC Ltd.
exceptional/ extraordinary case, the outer & Vizaag Minerals and Logistics
time limit of 330 days can be extended with Pvt. Ltd. [CA (AT) (CH) (Ins.)
a view to secure the ends of justice. no.166 of 2021]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
256. The transfer of plot cannot be affected Greater Noida Industrial NCLAT 30.01.2023
without approval of the GNIDA. Resolution Development Authority
plan could not have contained clause for (GNIDA) Vs. Roma Unicon
transfer of land without there being any Designex Consortium and Ors.
approval of the GNIDA for such transfer as [CA (AT) (Ins.) Nos. 180, 629 and
GNIDA is a necessary party to the 630 of 2022]
processes. Further, the assets of the
subsidiary company cannot be dealt with in
the CIRP of holding company without the
permission of the lessor. Holding company
and subsidiary company have separate
legal status and the assets of subsidiary
cannot be taken into consideration in CIRP
of holding company.

12A Withdrawal of application admitted under section 7, 9 or 10

257. Section 12A of the Code enacted with Shipra Hotels Ltd. Vs. Value SC 03.08.2018
effect from 06.06.2018 will not come into Lines Interiors Pvt. Ltd. [Civil
the picture since the admission of the Appeal No. 7405 of 2018]
petition was on 01.06.2018.
258. The exit route prescribed in section 12A is Maharashtra Seamless Ltd. SC 22.01.2020
not applicable to a Resolution Applicant. Vs. Padmanabhan Venkatesh
The procedure envisaged in the said & Ors. [Civil Appeal No. 4242
provision only applies to applicants of 2019 and other appeals]
invoking sections 7, 9 and 10 of the Code.
259. At any stage where the CoC is not yet Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
constituted, a party can approach the NCLT Vs. Union of India & Ors. [WP
directly, which Tribunal may, in exercise of (Civil) Nos. 99, 100, 115, 459,
its inherent powers under Rule 11 of the 598, 775, 822, 849, and 1221 of
NCLT Rules, allow or disallow an application 2018, SLP (Civil) No. 28623 of
for withdrawal or settlement. This will be 2018 and WP (Civil) 37 of 2019]
decided after hearing all the concerned
parties and considering all relevant factors
on the facts of each case.
260. Regulation 30A of the CIRP Regulations Brilliant Alloys Pvt. Ltd. Vs. S. SC 14.12.2018
must be read along with section 12A of the Rajagopal & Ors. [Petition(s) for
Code. Accordingly, the stipulation in Special Leave to Appeal (C)
regulation 30A can only be construed as No(s). 31557/2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
directory depending on the facts of each
case.
261. It is the promoter who can settle the matter Sukhbeer Singh Vs. Dinesh NCLAT 07.08.2019
with creditors and submit such proposal to Chandra Agarwal & Ors. [CA
RP and that he is bound to place it before (AT) (Ins.) No. 259 of 2019]
the CoC which is supposed to consider such
application in the light of section 12A.
262. Regulation 30A of the CIRP Regulations Francis John Kattukaran Vs. The NCLAT 13.11.2018
cannot override the substantive provisions Federal Bank Ltd. & Anr. [CA
of section 12A of the Code, according to (AT) (Ins.) No. 242 of 2018]
which the applicant can only move
application for withdrawal before the AA
and not by the RP.
263. As CoC has already been constituted, the A. K. Corporation Vs. Anupam NCLT, 14.08.2019
application for withdrawal can only be filed Extraction Ltd. [MA 2746/2019 Mumbai
to the RP and not directly in the court under in CP (IB) 2781/(MB)/2018]
section 60(5) of the Code read with Rule 11
of NCLT Rules.
264. Once the terms of settlement providing a Himadri Foods Ltd. Vs. Credit NCLAT 07.01.2021
repayment schedule was incorporated in Suisse Funds AG [CA (AT) (Ins.)
the order, thereby making it an order/ No. 1060 of 2020]
decree of the Court, the grant of liberty to
the FC to come back in case of breach of
settlement terms could only be interpreted
to mean that the revival of CIRP would be
sought for non-compliance with the terms
of settlement.
265. The application under section 12A having Shweta Vishwanath Shirke & NCLAT 28.08.2019
been approved by the CoC with more than Ors. Vs. The Committee of
90% of the voting share, it was not open to Creditors & Anr. [CA (AT) (Ins.)
the AA to reject the same and that too on a No. 601 of 2019 and other
ground of ineligibility under section 29A, appeals]
which is not applicable.
266. Once the CIRP is triggered in relation to a In the matter of Siva Industries NCLT, 12.08.2021
CD, the same is an order in rem and not in and Holdings Limited Chennai
personam and that whether the CD is [MA/43/CHE/2021 &
required to be wriggled out of the CIRP is to IA/647/IB/2020 & IA-
be decided by the AA by exercising its
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
judicial wisdom and cannot be carried away 586/CHE/2021 in
by the commercial wisdom of CoC. IBA/453/2019]
267. Once an application for insolvency Bank of Baroda & Anr. Vs. MBL SC 18.01.2022
resolution is admitted on behalf of a Infrastructures Ltd. & Ors. [Civil
creditor then the process would be one of Appeal No. 8411 of 2019]
rem, and therefore, all creditors of the
same class would have their respective
rights at par with each other.
268. When 90% and more of the creditors, in Vallal RCK Vs. Siva Industries SC 03.06.2022
their wisdom after due deliberations, find and Holdings Ltd. & Ors. [Civil
that it will be in the interest of all the Appeal Nos. 1811-1812 of 2022]
stakeholders to permit settlement and
withdraw CIRP, AA or the NCLAT cannot sit
in an appeal over the commercial wisdom
of CoC. The interference would be
warranted only when the AA or the NCLAT
finds the decision of the CoC to be wholly
capricious, arbitrary, irrational and de hors
the provisions of the statute or the rules.
269. Regulation 30A of the CIRP Regulations Sintex Plastics Technology Ltd. NCLAT 03.01.2023
must be read harmoniously with the v. Mahatva Plastic Products and
provisions of the Code. There is no Building Materials Pvt. Ltd
inconsistency between section 12A and [CA(AT) (Ins.) No. 729 & 730 of
regulation 30A to make regulation 30A 2022 & 475 I.A. No. 1813 of
unworkable. 2021, 577, 674, 814 of 2021]
270. Regulation 30A of the CIRP Regulations Abhishek Singh Vs. Huhtamaki SC 28.03.2023
allows withdrawal applications before the PPL Ltd. and Anr. [Civil Appeal
constitution of CoC and is not violative of No(s). ____ of 2023 (Arising out
section 12A. of SLP (Civil) No. 6452 of 2021)]

14 Moratorium
271. A conjoint reading of section 14(1)(a) and Sundaresh Bhat Vs. Assistant NCLT, 22.09.2020
section 238 of the Code clearly shows that Commissioner of State Tax and Mumbai
the Code overrides section 44 of the Anr. [IA No. 1043 of 2020 in
Gujarat Value Added Tax Act, 2003, as the CP(IB)No. 490/MB/2018]
same is inconsistent with the provisions of
the Code and thus the action of the
Assistant Commissioner of State Tax
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
directing a payment out of the account of
the CD is clearly barred by the provisions of
section 14(1)(a).
272. The sale of goods by custom department Ramsarup Industries Ltd. Vs. NCLT, 03.07.2018
through e-auction notice was violative of ICICI Bank Ltd. [CA (IB) No. Kolkata
section 14 of the Code. 116/KB/2018 in CP(IB) No.
349/KB/2017]
273. ‘Security Interest’ does not include Indian Overseas Bank Vs. NCLAT 28.09.2020
‘Performance Bank Guarantee’ and it is not Arvind Kumar [CA (AT) (Ins.)
covered by section 14 of the Code. No. 558 of 2020]
274. Section 14(1)(d) of the Code prohibits Vijaykumar V. Iyer Vs. Union of NCLT, 27.11.2019
recovery of any property by an owner or India [MA-337/2018 in C.P. (IB)- Mumbai
lessor in possession of the CD. This 298/(MB)/2018 and MA-
prohibition is also applicable to 336/2018 in C.P. (IB)-
Department of Telecom (DoT). Use of 302/(MB)/2018]
licence / spectrum is akin to “essential
goods or services” without which the CD
cannot run its telecom business. The AA
instructed the DoT not to make any
attempt to cancel the CD’s licence.
275. The asset in question being owned by a Weather Makers Pvt. Ltd. Vs. NCLT, 26.04.2019
third party but in possession of the RP, that Parabolic Drugs Ltd. [CA Chandigarh
too due to a contractual arrangement, 206/2019 in CP(IB)-
must not be retained but to be returned. 102/CHD/2018]
276. Once the counterclaims are adjudicated SSMP Industries Ltd. Vs. Perkan HC, New 18.07.2019
and the amount to be paid/recovered is Food Processors Pvt. Ltd. [CS Delhi
determined, at that stage, or in execution (COMM) 470/2016 &
proceedings, depending upon the situation CC(COMM) 73/2017]
prevalent, section 14 could be triggered.
277. Any amount deposited by any person in the State Bank of India Vs. NCLAT 27.04.2018
account of CD cannot be appropriated by Debashish Nanda [CA (AT) (Ins.)
bank towards its own dues, during the No. 49 of 2018]
period of moratorium.
278. Once moratorium is over, no further Sirpur Paper Mills Ltd. Vs. I.K. HC, 10.01.2020
embargo remains for continuing to hear Merchants Pvt. Ltd. [A.P. No. Calcutta
suits and other proceedings to which the 550 of 2008]
CD is a party.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
279. The appropriation of Fixed Deposit Alchemist Asset NCLT, New 25.04.2018
Receipts (FDRs) was barred by section 14 as Reconstruction Co. Ltd. Vs. Delhi
it was initiated after the initiation of CIRP. Moser Baer India Ltd. [(IB)-
Any withdrawal from the account/FDR by 378(PB)/2017]
the bank will be regarded as violation of
Regulation 19 of the CIRP Regulations and
in the absence of such a bar, it will not be
possible for RP to verify the claims and the
object of moratorium will be defeated.
280. Once the proceedings under the Code had Anand Rao Korada Vs. Varsha SC 18.11.2019
commenced and an order declaring Fabrics (P) Ltd. & Ors. [Civil
moratorium has been passed by the AA, Appeal Nos. 8800-8801 of 2019]
then if the assets of the CD are alienated
during the pendency of the proceedings
under the Code, it will seriously jeopardise
the interest of all the stakeholders.
281. Since the moratorium has expired, the ICICI Bank Ltd. Vs. Gopalsamy NCLAT 05.07.2019
appellant may pursue the suit pending Ganesh Babu [CA (AT) (Ins.) No.
before the subordinate court in the light of 655 of 2019]
section 60(6) of the Code.
282. Section 14 has created a piquant situation SSMP Industries Ltd. Vs. Perkan HC, New 18.07.2019
i.e., that the CD undergoing insolvency Food Processors Pvt. Ltd. [CS Delhi
proceedings can continue to pursue its (COMM) 470/2016 & CC
claims, but the counterclaim would be (COMM) 73/2017]
barred under section 14(1)(a). When such
situations arise, the court has to see
whether the purpose and intent behind the
imposition of moratorium is being satisfied
or defeated. A blinkered approach cannot
be followed, and the court cannot blindly
stay the counterclaim and refer the
defendant to the NCLT/RP for filing its
claims.
283. The mandate of the Code is that the Alchemist Asset Reconstruction SC 23.10.2017
moment an insolvency application is Company Ltd. Vs. Hotel
admitted, the moratorium that comes into Gaudavan Pvt. Ltd. & Ors. [Civil
effect under section 14(1)(a) expressly Appeal No. 16929 of 2017]
interdicts institution or continuation of
pending suits or proceedings against CD.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
284. Moratorium will also not affect the power Canara Bank Vs. Deccan NCLAT 14.09.2017
of the HC under Article 226 of the Chronicle Holdings Ltd. [CA (AT)
Constitution. However, so far as suit, if filed (Ins.) No. 147 of 2017]
before any HC under original jurisdiction
which is a money suit or suit for recovery,
against the CD, such suit cannot proceed
after declaration of moratorium under
section 14.
285. The Debts Recovery Appellate Tribunal Amira Pure Foods Pvt. Ltd. Vs. HC, New 20.05.2019
should have recalled its order so that the Canara Bank & Ors. [W.P.(C) Delhi
IRP/RP could take over the assets of the CD No. 5467/2019]
in exercise of its mandate under the Code,
during the period of moratorium.
286. The word ‘its’ used in section 14(1)(c) was Schweitzer Systemtek India NCLT, 03.07.2017
interpreted to denote the property owned Pvt. Ltd. Vs. Phoenix ARC Pvt. Mumbai
by the CD, thus the property not owned by Ltd. [T.C.P. No.
CD would not fall within the ambit of 1059/I&BP/NCLT/MB/MAH/20
moratorium. 17]
287. On determination, even if it is found that Jharkhand Bijli Vitran Nigam NCLAT 03.08.2018
the CD is liable to pay certain amount, still Ltd. Vs. IVRCL Ltd. & Anr. [CA
no recovery can be made during the period (AT) (Ins.) No. 285 of 2018]
of moratorium.
288. Moratorium imposed by section 14 is in the Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
interest of the CD itself, thereby preserving Vs. Union of India & Ors. [WP
its assets during the CIRP. (Civil) Nos. 99, 100, 115, 459,
598, 775, 822, 849, and 1221 of
2018, SLP (Civil) No. 28623 of
2018 and WP (Civil) 37 of 2019]
289. The RP has the right to take control and Commissioner of Customs, NCLAT 20.06.2019
custody of any asset, though the customs (Preventive) West Bengal Vs.
authority is in possession of the same Ram Swarup Industries Ltd. &
during the period of moratorium. Ors. [CA (AT) (Ins.) No. 563 of
2018]
290. The termination of the mining lease with Vasudevan Vs. State of NCLT, 03.05.2019
the CD during the moratorium has taken Karnataka & Ors. Chennai
away the interest created in favour of the [MA/632/2018 in CP/39/2018]
CD in relation to the mining operations and
the CD cannot carry on mining business as
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
a going concern, which frustrates the
object of CIRP.
291. Freezing of the bank accounts in the name Kitply Industries Ltd. Vs. NCLT, 15.11.2018
of CD is a proceeding of quasi-judicial Assistant Commissioner of Guwahati
nature and being so, such a proceeding is a Income Tax (TDS) & Anr. [I.A.
proceeding before any other authority as No. 54/2018 in C.P.
contemplated in the provision of law, and (IB)/02/GB/2018]
as such, continuation of the same during
the period when the moratorium is in
operation is illegal in view of the
prohibitions, rendered in section 14(1)(a)
of the Code.
292. Section 14 of the Code only prohibits a suit Tayal Cotton Pvt. Ltd. Vs. State HC, 06.08.2018
or a proceeding of a like nature and does of Maharashtra & Ors. Bombay
not include any criminal proceeding. [Criminal Writ Petition No.
1437of 2017]
293. Moratorium will not affect any suit or case Canara Bank Vs. Deccan NCLAT 14.09.2017
pending before the SC under Article 32 of Chronicle Holdings Ltd. [CA (AT)
the Constitution or where an order is (Ins.) No. 147 of 2017]
passed under Article 136 of the
Constitution.
294. ‘Essential service’ is for survival of ICICI Bank Ltd. Vs. Innoventive NCLT, 23.08.2017
humankind, but not for making business Industries Ltd. [MA 157 in CP Mumbai
and earn profits without making payment 01/I&BP/2016]
to the services used. When company is
using it for making profit, then the
company must make payment to the
services/goods utilised in manufacturing
purpose.
295. Essential goods or services, including Dakshin Gujarat VIJ Company NCLAT 03.02.2018
electricity, water, telecommunication Ltd. Vs. ABG Shipyard Ltd. &
services and information technology Anr. [CA (AT) (Ins.) No. 334 of
services, if they are not direct input to the 2017]
output produced or supplied by the CD,
cannot be terminated, or suspended or
interrupted during moratorium period.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
296. ‘Profit Petroleum’ is not out of the ambit of Videocon Industries Ltd. Vs. NCLT, 13.03.2019
section 14 of the Code and moratorium is State Bank of India & Ors. [MA Mumbai
applicable. 1300/2018 in C.P. (IB)-
02/(MB)/2018]
297. Section 14 of the Code is not applicable to Varrsana Ispat Limited Vs. NCLAT 02.05.2019
the criminal proceeding, or any penal Deputy Director, Directorate of
action taken pursuant to the criminal Enforcement [CA (AT) (Ins.) No.
proceeding or any act having essence of 493 of 2018]
crime or crime proceedings under the
PMLA.
298. Imposition of fine cannot held to be a Shah Brothers Ispat Pvt. Ltd. Vs. NCLAT 31.07.2018
money claim or recovery against the CD nor P. Mohanraj & Ors. [CA (AT)
order of imprisonment, if passed by the (Ins.) No. 306 of 2018]
court of competent jurisdiction and cannot
come within the purview of section 14.
Further, no criminal proceeding is covered
under section 14 of the Code.
299. Sections 96 and 101, when contrasted with State Bank of India Vs. V. SC 14.08.2018
section 14, would show that section 14 Ramakrishnan & Anr. [Civil
cannot possibly apply to a personal Appeal No. 3595, 4533 of 2018]
guarantor.
300. ‘Moratorium’ shall be declared for Alpha and Omega Diagnostics NCLAT 31.07.2017
prohibiting any action to recover or enforce (India) Ltd. Vs. Asset
any security interest created by the CD in Reconstruction Company of
respect of ‘its’ property. India Ltd. & Ors. [CA (AT) (Ins.)
No. 116 of 2017]
301. In terms of section 14 of the Code, all the Haravtar Singh Arora Vs. NCLAT 20.09.2018
proceedings pending before any court Punjab National Bank & Ors.
against the CD automatically comes to halt [CA (AT) (Ins.) No. 567 of 2018]
and cannot be decided.
302. Section 14 of the Code will prevail over Anju Agarwal Vs. Bombay Stock NCLAT 23.04.2019
section 28A of the Securities and Exchange Exchange & Ors. [CA (AT) (Ins.)
Board of India Act, 1992, and SEBI cannot No. 734 of 2018]
recover any amount including any penalty
from the CD.
303. The Government of India issued show Monnet Ispat & Energy Ltd. Vs. NCLAT 30.11.2018
cause notice to the CD before issuance of Government of India, Ministry
the termination letter much prior to
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
initiation of the CIRP. The CD having failed of Coal [CA (AT) (Ins.) No. 26 of
to act in terms of the said show cause 2018]
notice and the order of cancellation passed
by the Government being before
declaration of moratorium, it cannot be
held to be in violation of section 14(1)(d).
304. It is always fit to appoint local professional, Sojitz India Pvt. Ltd. Vs. Oren NCLT, 12.02.2019
instead of airlifting a person from Delhi, Hydrocarbons Pvt. Ltd. Chennai
which will be taxing the stressed CD and [CP/1182/IB/2018]
there is every chance of delay in
proceeding.
305. After admission of application under Indian Overseas Bank Vs. NCLAT 15.11.2017
section 7, once moratorium is declared, it is Dinkar T. Venkatsubramaniam
neither open to any person including FCs [CA (AT) (Ins.) No. 267 of 2017]
and the appellant bank to recover any
amount from the account of the CD, nor it
can appropriate any amount towards its
own dues.
306. During the moratorium period, a guarantee RBL Bank Ltd. Vs. MBL NCLT, 18.12.2017
cannot be invoked. Infrastructures Ltd. [C.A. (I.B.) Kolkata
No. 543/2017 arising out of
C.P(IB)/170/KB/2017)]
307. Once moratorium is declared in a CIRP, UCO Bank Vs. G. Ramachandran NCLAT 03.11.2020
adjustment of fixed deposits of CD by the [CA (AT) (Ins.) No. 761 of 2020
appellant against an outstanding loan of with IA No. 2038 of 2020]
CD, cannot be maintained. The plea of lack
of knowledge of initiation of CIRP is not
relevant.
308. Once the moratorium is declared, it is not Alliance Broadband Services NCLT, 10.12.2020
open to any person, including FCs, to Pvt. Ltd. Vs. Manthan Kolkata
recover any amount from the account of Broadband Service Pvt. Ltd. [IA
the CD nor can it appropriate any amount No. 853/KB/2020 in CP (IB) No.
towards its own dues. It held the actions of 1634/KB/2018]
the bank to be in violation of section 14 and
directed it to reverse the amount along
with any interest accrued as per the nature
of the deposit.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
309. The bank guarantee can be invoked even Bharat Aluminium Co. Ltd. Vs. NCLAT 26.02.2021
during the period of moratorium in view of J.P Engineers Pvt. Ltd. and Anr.
section 14(3)(b). [CA (AT) (Ins.) No. 759 of 2020]

310. On the issue as to whether institution or P. Mohanraj & Ors. Vs. Shah SC 01.03.2021
continuation of a proceeding under section Brothers Ispat Pvt. Ltd. [Civil
138 of the Negotiable Instruments Act, Appeal No. 10355 of 2018 with
1881 (NI Act) can be said to be covered other appeals]
under moratorium, the SC held as under:

i. A quasi-criminal proceeding which would

result in the assets of the CD being
depleted as a result of having to pay
compensation which can amount to twice
the amount of the cheque that has
bounced would directly impact the CIRP in
the same manner as the institution,
continuation, or execution of a decree in
such suit in a civil court for the amount of
debt or other liability. Judged from the
point of view of this objective, it is
impossible to discern any difference
between the impact of a suit and a section
138 proceeding, insofar as the CD is
concerned, on it getting the necessary
breathing space to get back on its feet
during the CIRP.

ii. Section 14(1)(a) refers to monetary

liabilities of the CD and section 14(1)(b)
refers to the CD’s assets, and together,
these two clauses form a scheme which
shields the CD from pecuniary attacks
against it during the moratorium period so
that the CD gets breathing space to
continue as a going concern in order to
ultimately rehabilitate itself. Any crack in
this shield is bound to have adverse
consequences.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement

iii. A moratorium does not extinguish any

liability, civil or criminal, but only casts a
shadow on proceedings already initiated
and on proceedings to be initiated, and
such shadow is lifted when the moratorium
period comes to an end.

iv. A section 138 proceeding can be said to

be a “civil sheep” in a “criminal wolf’s”
clothing, as it is the interest of the victim
that is sought to be protected, the larger
interest of the State being subsumed in the
victim alone moving a court in cheque
bouncing cases.

v. A quasi-criminal proceeding contained in

Chapter XVII of the NI Act would, given the
object and context of section 14 of the
Code, amount to a “proceeding” within the
meaning of section 14(1)(a) and therefore,
the moratorium attaches to such
proceeding.

vi. Moratorium would apply only to the CD,

and the natural persons mentioned in
section 141 of the NI Act shall continue to
be statutorily liable under Chapter XVII of
the NI Act.
311. On deferment of payment of loan as per Small Scale Industrial SC 23.03.2021
the notification of RBI dated 27.03.2020, Manufactures Association
the SC held, that there shall not be any (Regd.) Vs. Union of India and
charge of interest on interest/compound Ors. [Writ Petition (C) No. 476
interest/ penal interest for the period of 2020]
during the loan moratorium and any
amount already recovered under the same
head, shall be refunded to the concerned
borrowers and to be given credit/adjusted
in the next instalment of the loan account.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
312. Moratorium creates no hindrance to a Gouri Prasad Goenka Vs. State HC, 21.06.2021
proceeding for declaration of a wilful Bank of India [WPO No. 171 of Calcutta
defaulter. An act of wilful default is not 2021]
obliterated automatically by the filing of an
application under section 7.
313. Moratorium is only in relation to CD and Anjali Rathi and Others Vs. SC 08.09.2021
not in respect of the director and Today Homes & Infrastructure
management of CD. Pvt. Ltd. and Others [SLP (C) No.
12150 of 2019 with other
appeals]

314. The power under Section 482 of the Code Sandeep Khaitan, Resolution SC 22.04.2021
of Criminal Procedure, 1973 may not be Professional Vs. JSVM Plywood
available to the court to countenance the Industries Ltd.& Anr. [Criminal
breach of a statuary provision. The words Appeal No. 447 of 2021]
‘to secure the ends of justice’ in section 482
cannot mean to overlook the undermining
of a statutory dictate, which in this case is
section 14, and section 17 of the Code.
315. In the event of telecom spectrum being Union of India Vs. Vijaykumar NCLAT 13.04.2021
subjected to proceedings under the Code, V. Iyer [CA (AT) (Ins.) No. 733 of
protection would be available to telecom 2020 with other appeals]
licenses and spectrum under section 14(1).
316. Section 14 of the Code is not applicable to Directorate of Economic NCLAT 04.05.2021
the criminal proceeding or any penal action Offences Vs. Binay Kumar
taken pursuant to the criminal proceedings Singhania & Ors. [CA (AT) (Ins.)
or any Act having essence of crime or crime No. 935 of 2020]
proceeds.
317. If the supply of electricity is for managing Executive Engineer Uttar NCLAT 27.05.2021
the operations of the CD, the supply cannot Gujarat VIJ Company Ltd. Vs
be interrupted during moratorium except Devang RP Samapat, RP [CA
where CD has not paid dues arising from (AT) (Ins.) No. 371 and 372 of
such supply during the moratorium. 2021]

318. Attachment of assets of a company Astutosh Agarwala, Resolutio NCLT, 01.12.2021

undergoing CIRP following section 79 of the Professional Vs. Joint Mumbai
GST Act 2017 constitute violation of the Commissioner of State & Ors.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
‘moratorium’ imposed under section 14 of [I.A. 2422/2020 in C.P(IB)-
the Code. 2640(MB)/2019]

Therefore, no notice issued u/s 79 of the

State GST/ CGST Act can be acted upon by
any Central/ State Authority against the CD
undergoing CIRP.
319. The prohibition in transferring the assets of Jet Aircraft Maintenance NCLAT 14.02.2022
the CD under section 14 is on the CD and Engineers Welfare Association
the said prohibition ipso-facto does not Vs. Ashish Chhawchharia,
prohibit RP or CoC, who were empowered Resolution Professional for Jet
by specific provision of the Code to Airways (India) Ltd. & Ors. [CA
undertake any such sale. (AT) (Ins.) No. 628 of 2020]

Despite declaration of moratorium under

section 14(1)(b), the RP is empowered to
conduct sale of unencumbered assets, if he
is of the opinion that it is necessary for
better realization of value.
320. FC cannot continue the proceedings under Indian Overseas Bank Vs. RCM SC 18.05.2022
SARFAESI Act once the CIRP is initiated and Infrastructure Ltd. Anr. [Civil
moratorium was ordered. Appeal No. 4750 of 2021]

321. The banks guarantees are beyond the IDBI Bank Ltd. Vs. Indian Oil NCLAT 10.01.2023
scope of moratorium and can be invoked Corporation Ltd. [CA (AT) (Ins.)
during moratorium. Banks are bound to No. 543 of 2021]
encash the unconditional bank guarantees
without any demur as and when the same
is demanded by the beneficiary.
322. Section 14 seeks to preserve the ‘going Sundaresh Bhat RP of JBF NCLT, 09.03.2023
concern’ status ‘if’ the CD is a running unit. Petrochemical Limited Vs. Ahmedaba
Manglore Refinery and d
Petrochemicals Limited [CP(IB)
No. 232 of 2018]

16 Appointment and tenure of IRP

Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
323. An ex-employee of the FC cannot be State Bank of India Vs. NCLAT 22.05.2020
appointed as an IRP. Metenere Ltd. [CA (AT) (Ins.)
No. 76 of 2020]
324. An IP must refrain from accepting too many IDBI Bank Ltd. Vs. Lanco NCLT, 07.08.2017
assignments if he is unlikely to be able to Infratech Ltd. [C.P. (IB) No. Hyderabad
devote adequate time to each of his 111/7/HDB/2017]
assignment.
325. Once an IP is appointed to manage the Innoventive Industries Ltd. Vs. SC 31.08.2017
company, the erstwhile directors who are ICICI Bank & Anr. [Civil Appeal
no longer in management, obviously Nos. 8337-8338 of 2017]
cannot maintain an appeal on behalf of the
CD.
326. IBBI vide its letter dated 01.01.2018, has Innovsource Pvt. Ltd. Vs Getit NCLT, New 08.01.2018
recommended a panel of IPs for Grocery Pvt. Ltd. [IB- Delhi
appointment as IRPs in compliance with 295(PB)/2017]
section 16(3)(a) of the Code to cut delay.
The list of recommended IP provides
instant solution to the AA to pick up the
name and make appointment. It helps in
meeting the timeline given in the Code and
helps unnecessary time wasted, first by
asking the IBBI to recommend the name
and then appointing such IRP by AA.
327. It was clarified that IRP is acting as a court Asset Reconstruction Company NCLT, 02.01.2019
officer and any hindrance in the work of (India) Pvt. Ltd. Vs. Shivam Mumbai
CIRP will amount to contempt of court. Water Treaters Pvt. Ltd. [C.P.
No. (IB) 1882 (MB)/2018]
17 Management of affairs of CD by IRP
328. To ensure that the CD remains a going Subasri Realty Pvt. Ltd. Vs. N. NCLAT 22.02.2018
concern, all the directors/employees are Subramanian & Anr. [CA (AT)
required to function and assist the RP who (Ins.) No. 290 of 2017]
manages the affairs of the CD during
moratorium. If an officer or employee had
the power to sign a cheque on behalf of the
CD prior to the order of moratorium, such
power does not stand suspended on the
suspension of the Board of Directors nor
can be taken away by the RP.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
329. Once CIRP has commenced with the State Bank of India Vs. Essar NCLT, 02.08.2017
appointment of IRP, no doubt the Board of Steel India Ltd. [C.P. (I.B) No. Ahmedaba
Directors would be suspended. That does 40/7/NCLT/AHM/2017)] d
not mean the entire machinery of the CD is
suspended. Even after appointment of IRP,
all the employees of the CD, top to bottom,
would continue to function under the
control of IRP instead of the Board of
Directors.
330. IRP has not vested with any specific power Steel Konnect (India) Pvt. Ltd. NCLAT 29.08.2017
to sue any person on behalf of the CD. Vs. Hero Fincorp Ltd. [CA (AT)
However, in case of such difficulty, it is (Ins.) No. 51 of 2017]
always open to IRP to bring to the notice of
the AA for appropriate order.
331. RP is required to act in terms of section Bohar Singh Dhillon Vs. Rohit NCLAT 09.05.2019
17(2)(e) of the Code for complying with the Sehgal (IRP) & Ors. [CA (AT)
requirements under SEBI and the (Ins.) No. 665 of 2018]
Regulations framed thereunder as well as
the guidelines.
332. The phrase used in section 17(1)(d) of the Union Bank of India Vs. Mr. NCLAT 27.01.2022
Code that financial institution "shall act on Dinkar T. Venkatasubramanian,
the instructions of the IRP" does not mean Resolution Professional of
that it authorises IRP/RP to compel the Amtek Auto Limited & Ors. [CA
financial institution for maintaining the (AT) (Ins.) No. 729 of 2020]
accounts of the CD to continue the Non-
Fund Based Facility comforted by bank
guarantee.
18 Duties of IRP
333. It is the duty of the IRP to take control and Encore Asset Reconstruction NCLAT 14.05.2019
custody of any asset over which the CD has Company Pvt. Ltd. Vs. Charu
ownership rights as recorded in the balance Sandeep Desai & Ors. [CA (AT)
sheet of the CD. (Ins.) No. 719 of 2018]
334. The RP will come into picture after IRP Rajendra K. Bhutia Vs. NCLT, 02.04.2018
having exercised his duties under section Maharashtra Housing and Area Mumbai
18, so that IRP will hand over the custody of Development Authority [MA
the assets as well as other records that 96/2018 in C.P. No.
have already been taken into custody, to 1061/I&BC/2017]
the RP.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
335. In terms of section 21(1), RP is only Avil Menezes, Resolution NCLAT 03.02.2021
supposed to collate the claims which Professional of AMW Auto
implies comparison with the record and Component Ltd. Vs. Shah Coal
verification. Unlike a liquidator who is Pvt. Ltd. [CA (AT) (Ins.) No. 63 of
empowered to admit or reject a claim 2021]
under section 40 of the Code against which
an appeal lies to the AA, the RP is not
vested with any adjudicatory powers. All
actions taken by RP are subject to control
of the AA.
336. ‘Maturity of claim’, ‘default of claim’ or Mohanlal Dhakad Vs. BNG NCLAT 22.02.2021
‘invocation of guarantee’ has no nexus in Global India Ltd. [CA (AT) (Ins.)
regard to the filing of claim before the IRP. No. 684 of 2020]
337. RP does not have the jurisdiction to Punjab National Bank Vs. Mr. NCLAT 21.10.2022
review or revise the admitted claims. Ashish Chhawchharia and
Ors. [CA (AT) (Ins.) No. 584 of
2021 & IA NO. 2720 of 2021
338. The claim of gratuity is payable only at a Varrsana Employee Welfare NCLAT 25.11.2022
future date in the happening of any event Association Vs. Anil Goel
like retirement, resignation, termination, Liquidator [CA (AT) (Ins.) No.
death, etc., and therefore, it cannot be 544 of 2021]
construed as a ‘claim subsisting’ so as to
include the employee in the list of
stakeholders and consequently seeking a
place in the SCC.
339. During CIRP, the creditor is obligated to DLF Ltd. Vs. IL&FS Engineering HC, New 21.12.2022
necessarily lodge claims before RP. A and Construction Company Delhi
successful resolution applicant cannot be [2022/DHC/ 005697]
faced with undecided claims. This would
amount to “Hydra-head popping up”.
19 Personnel to extend co-operation to IRP
340. Section 19 of the Code latently and patently Shailesh Chawla & Anr. Vs. NCLAT 23.09.2020
imposes an obligation on the personnel and Vinod Kumar Mahajan, RP &
promoters of the CD to extend all Ors. [CA (AT) (Ins.) No. 571 of
assistance and cooperation which the IRP 2020 and another appeal]
will require in running / managing the
affairs of the CD.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
341. All the personnel connected with the CD, its Bank of India Vs. Tirupati NCLT, New 03.07.2017
promoters or any other person associated Infraprojects Pvt. Ltd. [CP No. Delhi
with the management of the CD are under IB-104(PB)/2017]
legal obligation under section 19 of the
Code to extend every assistance and
cooperation and in case there is any
violation, the IRP would be at liberty to
make appropriate application to the AA
with a prayer for passing an appropriate
order.
342. Any interference in RP’s discharge of Punjab National Bank Vs. NCLT, 22.12.2017
duty/work, action shall be initiated against Divyajyoti Sponge Iron Pvt. Ltd. Kolkata
the CD and it will be presumed that the CD [C.P. (IB) No.363/KB/17)]
is not obeying the order of the Court. It is
expected that CD should fully cooperate
with the RP.
20 Management of operations of corporate debtor as going concern
343. Section 20(2)(e) gives power to the IRP Tuf Metallurgical Pvt. Ltd. Vs. NCLAT 03.02.2021
(subsequently RP) to take all actions as are Impex Metal & Ferro Alloys Ltd.
necessary to keep the CD as a going & Ors. [CA (AT) (Ins.) No. 190 of
concern. In such a process of managing the 2020]
business operations of the CD, if advance
payments for supply of goods is received, it
cannot be treated as raising an interim
finance. It is an advance for payment of
goods which the CD as a going concern may
be manufacturing. Such amount received
as an advance payment for the supply of
goods during the CIRP would have to be
treated as CIRP cost.
21 Committee of Creditors
344. It is the settled law of the land that CoC M.P. Agarwal Vs. Shri Lakshmi NCLAT 27.07.2020
enjoys primacy in the matter of approval or Cotsyn Ltd. & Anr. [CA (AT)
rejection of resolution plan/settlement (Ins.) No. 620 of 2020]
proposal and the AA as well as the
appellate tribunal would be exceeding its
jurisdiction in approving or rejecting such
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
plan/proposal which is essentially based on
the commercial wisdom of the CoC.
345. The CoC has no role in the matter of Standard Chartered Bank Vs. NCLAT 04.07.2019
distribution of amount amongst the Satish Kumar Gupta & Ors. [CA
creditors, including the FCs or OCs. The (AT) (Ins.) No. 242 of 2019 and
members of the CoC being interested other appeals]
parties are not supposed to decide the
manner of distribution. The inter se
distribution amongst the FCs and OCs
cannot be held to be purely commercial in
nature to be in the domain of the CoC.
346. CoC is the fit person to take its own State Bank of India Vs. Orissa NCLT, 22.06.2018
business decision and no reason has been Manganese & Minerals Ltd. [CA Kolkata
found to disturb or sit on the decision of the (IB) Nos. 402 and others in CP
CoC taken on by majority vote share. (IB) No. 371/KB/2017]
347. The CoC is required to evaluate the Swiss Ribbons Pvt. Ltd. &Anr. SC 25.01.2019
resolution plan on the basis of feasibility Vs. Union of India & Ors. [WP
and viability. (Civil) Nos. 99, 100, 115, 459,
598, 775, 822, 849, and 1221 of
2018, SLP (Civil) No. 28623 of
2018 and WP (Civil) 37 of 2019]
348. The CoC has no absolute power to change Rama Subramaniam Vs. Sixth NCLT, 13.03.2019
the IRP/RP at their whims and fancies Dimension Projects Solutions Mumbai
without any valid or tenable reasons. The Ltd. [M.A. No. 1626/2018 in
change of RP must be C.P. No. 587/I&BP/2018]
rational/tenable/reasonable and not at the
whims and fancies of the CoC.
349. All members of the CoC are bound by the Sai Regency Power Corporation NCLT, 21.08.2019
resolution approved by it with requisite Pvt. Ltd. Vs. CoC of Sai Regency Chennai
majority. Power Corporation Pvt. Ltd.
[MA/872/2019 in IBA/92/2019]
350. The decision of CoC taken by requisite IFCI Ltd. Vs. Era Housing & NCLT, New 26.04.2019
majority cannot be questioned by non- Developers (India) Ltd. [(IB)- Delhi
applicant respondent and no one is 489(PB)/2017]
permitted to strangulate the CIRP by
refusing to contribute their share of
expense.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
351. All decisions of COC shall be taken by a vote Asset Reconstruction Company NCLT, 26.02.2019
of not less than 51% of voting share of FCs. (India) Ltd. (ARCIL) Vs. Hyderabad
It is just like a general provision that all Koteswara Rao Karuchola and
matters other than those referred to in Anr. [IA No. 344 of 2018 in CP
section 28 of the Code require to be (IB) No. 219/7/HDB/2018]
approved by a voting of not less than 51%
of voting share of FCs.
352. In a number of cases, it has now been seen SBJ Exports & Mfg. Pvt. Ltd. Vs. NCLT, New 07.06.2018
that members of the CoC are nominated by BCC Fuba India Ltd. [CP- Delhi
FCs like Banks without conferring upon 659/2016]
them the authority to take decision on the
spot which acts as a block in the time bound
process contemplated by the Code.
Suchlike speed brakers and roadblocks
obviously cause obstacles to achieve the
targets of speedy disposal of the CIRP.
353. The FCs/Banks must send only those Jindal Saxena Financial Services NCLT, New 04.07.2018
representatives who are competent to take Pvt. Ltd. Vs. Mayfair Capital Delhi
decisions on the spot. The wastage of time Pvt. Ltd. [C.A. No. 523(PB)/2018
causes delay and allows depletion of value in C.P. No. (IB)-84(PB)/2017)]
which is sought to be contained.
354. It is time to recognise the OC’s voice in the Bank of Baroda and Binani NCLT, 04.05.2018
CoC for payment of minimum amount Cements Limited & Ors. Vs. Kolkata
payable to them as required under the Vijaykumar V. Iyer [CA (IB) No.
Code. 201/KB/18 and other CAs/IAs in
C.P.(IB) No. 359/KB/2017]
355. In case of deadlock in voting share in the Nikhil Mehta & Sons (HUF) & NCLT, New 29.09.2018
appointment of RP under section 22 of the Ors. Vs. AMR Infrastructure Ltd. Delhi
Code, preference can be given to the [CA No. 811(PB)/2018 in (IB)-
decision taken by highest percentage of the 02(PB) /2017]
votes in the COC.
356. The CoC is also a creature of statute, and, Numetal Ltd. Vs. Satish Kumar NCLT, 19.04.2018
can be termed as the instrumentality of the Gupta & Anr. [I.A. Nos. 98 & Ahmedaba
State, hence, they are under statutory other IAs in CP (IB) No. 40 of d
obligation to follow the basic principles of 2017]
administrative law. The instrumentality of
the State has to act in transparent and fair
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
manner and not to take arbitrary decision
or to adopt discriminatory practice.
357. Only the members of the CoC who attend Tata Steel Limited Vs. Liberty NCLAT 04.02.2019
the meeting directly or through video House Group Pte. Ltd. & Ors.
conferencing, can exercise its voting [CA (AT) (Ins.) No. 198 of 2018]
powers after considering the other
requirements as may be specified by the
IBBI. Those members of the CoC who are
absent, their voting shares cannot be
counted.
358. The CoC cannot take an adverse decision as Bank of Baroda and Binani NCLT, 04.05.2018
against the prospective bidding plan Cements Ltd.& Ors. Vs. Kolkata
submitted more so by a leading company Vijaykumar V. Iyer [CA (IB) No.
who is capable of effectively taking over the 201/KB/18 and other CAs/IAs in
CD without giving a reasonable opportunity C.P.(IB) No. 359/KB/2017]
of being heard and the same amounts to
being unjust and arbitrary.
359. It is absurd to put the employees of CD at Anil N. Surwade & Ors. Vs. NCLAT 03.12.2020
par with the erstwhile board of directors Prashant Jain, RP, Sejal Glass
seeking information regarding resolution Ltd. [CA (AT) (Ins.) No. 1006 of
plan and proceedings before the CoC. Once 2020]
their claims have been admitted, no role is
ascribed to them in the deliberation of the
CoC.
360. The CoC has no role in deciding or changing Rajnish Jain Vs. Manoj Kumar NCLAT 18.12.2020
the status of a creditor either as FC or OC Singh, IRP & Ors. [CA (AT) (Ins.)
and such decision of CoC can never be No. 519 of 2020]
treated as an exercise under its commercial
wisdom.
361. AA had no power to impose RP of its choice. Prakash Shanker Mishra & Ors. NCLAT 13.01.2021
Even for Authorised Representative, the Vs. Ashok Kriplani & Anr. [CA
decision of the majority is to be respected. (AT) (Ins.) No. 34 of 2020 and
another appeal]
362. The SC held: (a) The collusive commercial Phoenix Arc Pvt. Ltd. Vs. Spade SC 01.02.2021
arrangements between FCs and the CD Financial Services Ltd. & Ors.
would not constitute a ‘financial debt’; (b) [Civil Appeal No. 2842 of 2020
The objects and purposes of the Code are with 3063 of 2020]
best served when the CIRP is driven by
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
external creditors, so as to ensure that the
CoC is not sabotaged by related parties of
the CD. The purpose of excluding a related
party of a CD from the CoC is to obviate
conflicts of interest; (c) Exclusion under the
first proviso to section 21(2) is related not
to the debt itself but to the relationship
existing between a related party FC and the
CD.; and (d) The FC, who in praesenti is not
a related party, would not be debarred
from being a member of the CoC. However,
in case where the related party FC divests
itself of its shareholding or ceases to
become a related party in a business
capacity with the sole intention of
participating in the CoC and sabotage the
CIRP, it would be in keeping with the object
and purpose of the first proviso to section
21(2), to debar the former related party
creditor.
363. The AA reiterated that they have no power Sunit Jagdishchandra Shah, RP NCLT, 18.02.2021
to interfere in the commercial wisdom of for Sungracia Tiles Pvt. Ltd. Vs. Ahmedaba
the CoC, until and unless there is gross Sungracia Tiles Pvt. Ltd. and d
violation of principle of law. Ors. [IA 678 of 2020 in C.P. (IB)
No. 750/NCLT/AHM/2019]
364. By exercising the commercial wisdom, the STCI Finance Limited through NCLT, 31.05.2021
CoC cannot avoid compliance with the Subhash Modi, RP [(IA) No.264 Mumbai
provisions of the Code and Regulations. of 2021 in CP No. (IB)
4147/MB/2019]
365. ‘Commercial wisdom’ of the CoC has been Ngaitlang Dhar Vs. Panna SC 17.12.2021
given paramount status without any Pragati Infrastructure Pvt. Ltd.
judicial intervention, for ensuring & Ors. [Civil Appeal Nos. 3665-
completion of the processes within the 3666, 3742-3743 of 2020]
timelines prescribed by the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
366. A removed director from the board of Dheeraj Wadhawan Vs. The NCLAT 27.01.2022
directors cannot interfere in the company's Administrator, Dewan Housing
affairs per contra a suspended director Finance Corporation Ltd. [CA
always remains on the erstwhile Board of (AT) (Ins.) No. 785 of 2020 &
the Company and assist the IRP/RP as per 647 of 2021]
requirement.
367. NCLAT observed that superseded directors Dheeraj Wadhawan Vs. The NCLAT 27.01.2022
are those directors who have been Administrator, Dewan Housing
removed or deemed to have demitted Finance Corporation Limited
office and who were not holding the [CA (AT) (Ins.) No. 785 of 2020
position of director on the CIRP & 647 of 2021]
commencement date, cannot be
considered a director simpliciter to benefit
from participating in the meeting of CoC.
After vacation or removal from the office of
the director, the said person cannot claim
their entitlement to participate in the CoC
of the CD. A removed director from the
board of directors cannot interfere in the
company's affairs per contra a suspended
director always remains on the erstwhile
Board of the Company and assist the
IRP/RP as per requirement.
368. It is neither commercial wisdom nor a Bank of India Vs. Agnipa Energo NCLT, 04.02.2022
commercial decision of the CoC /FC to Pvt. Ltd [IA No.10 of 2021 in Guwahati
reject a resolution plan which offers to CP(IB) No.37//2019]
them an amount of twenty times more
than the liquidation value.
369. A valuation consisting of mere naked values Periasamy Palani Gounder Vs. NCLAT 17.02.2022
without a detailed report is not valid. It is a Radhakrishnan Dharmarajan &
settled proposition that the valuation Anr. [CA (AT) (CH) (Ins.) No.
exercise is conducted to facilitate the CoC's 164, 176, 218 & 219 of 2021]
decision-making process. Therefore, the
existence of a valid and accurate valuation
report is sine qua non for the CoC to
exercise its commercial wisdom.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
370. The CoC is fully competent to revise the Khushvinder Singhal, Erstwhile NCLAT 04.05.2022
professional fee even if it was earlier RP of Bestways Transport
approved by any earlier CoC decision. (India) Pvt. Ltd. Vs. Reena
Tiwari [CA (AT) (Ins.) No. 469 of
2022]
371. It is open to CoC to deliberate the plan in Noble Marine Metals Co WLL NCLAT 09.02.2023
accordance with law which directions Vs. Kotak Mahindra Bank Ltd. &
cannot be faulted with; more so when the Ors. [CA (AT) (Ins.) No. 653 of
resolution applicant himself consented 2022]
before the AA.
372. After approval of a resolution plan by CoC, Hem Singh Bharana Vs. Pawan NCLAT 05.01.2023
it is binding on itself and the CoC cannot be Doot Estate Pvt. Ltd. & Ors [CA
allowed to go back from its decision and (AT) (Ins.) No. 1481 of 2022]
pass any other resolution. This should be
accepted to give finality on different steps
and for timely conclusion of the resolution
process.
373. The obligation of the AA to direct for Hero Fincorp Ltd. Vs. Hema NCLAT 06.01.2023
liquidation shall rise only when decision of Automotive Pvt. Ltd. [CA (AT)
the CoC is in accordance with the Code. (Ins.) No. 1540 of 2022]

374. So long as the provisions of the Code and Paramvir Singh Tiwana & Ors. NCLAT 22.12.2022
the regulations have been met, it is for the Vs. Puma Realtors Pvt. Ltd. &
CoC to negotiate and accept the resolution Anr. [CA (AT) (Ins.) No. 554 of
plan, which may involve differential 2021]
payments to different classes of creditors.
22 Appointment of RP
375. When there is a conflict and no consensus Allahabad Bank Vs. Anil Kumar NCLT, 28.07.2020
is reached in the CoC where FCs comprising [IA No. 691 of 2019 and other Ahmedaba
of financial institutions and non-financial IAs in C.P. (IB) 397 of 2018] d
institutions by the majority of voting shares
to appoint the IRP/RP, proposed by the
applicant under section 9 of the Code, it is
expedient to appoint an independent
IRP/RP to break stalemate between the
FCs.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
376. The decision of appointment of IRP as RP or Committee of Creditors of LEEL NCLAT 21.12.2020
replacement of IRP by another RP falls Electricals Ltd. Through State
within the ambit of section 22 of the Code Bank of India Vs. Leel Electricals
and is a decision based on commercial Ltd. through its IRP, Arvind
wisdom of CoC which is not amenable to Mittal [CA (AT) (Ins.) No. 1100
judicial review. When the CoC has passed of 2020]
the resolution with the requisite majority,
it is not proper to say that the legal rights of
IRP have been infringed.
377. The IRP has no locus standi to maintain an Ranjeet Kumar Verma Vs. NCLAT 04.01.2021
appeal against the decision of the CoC with Committee of Creditors of
a 100% majority to replace him with Straight Edge Contract Pvt. Ltd.
another RP. The outgoing IRP cannot claim through Resolution
invasion of any of his legal rights under the Professional [CA (AT) (Ins.) No.
Code as he is not a stakeholder. 1129 of 2020]
378. When no order is passed by the AA to Invent Assets Securitisation & NCLAT 26.11.2021
continue IRP under section 22(5), he cannot Reconstruction Pvt. Ltd & Anr.
claim continuance. IRP. His claim of Vs. Rajmal Labhchand Mogra &
continuance will be contrary to the Ors. [CA (AT) (Ins.) No. 709 of
statutory scheme. 2019]

Regulation 17(3) of the CIRP Regulations

cannot be read in a manner which may
have effect of defeating the purpose and
object of section 22(5) by allowing the IRP
to continue without there being any order
of the AA in a case where decision has been
taken to replace the IRP.
24 Meeting of committee of creditors
379. A combined reading of the Code as well as Vijay Kumar Jain Vs. Standard SC 31.01.2019
the Regulations leads to the conclusion that Chartered Bank & Ors. [Civil
members of the erstwhile Board of Appeal No. 8430 of 2018]
Directors of the CD being vitally interested
in resolution plans that may be discussed at
meetings of the CoC, must be given a copy
of such plans as part of documents that
have to be furnished along with the notice
of such meetings.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
380. If the claim of OCs, on verification is found Consolidated Engineering NCLAT 12.12.2018
to be less than 10%, the OCs have no right Company & Anr. Vs. Golden
to claim representation in the meeting of Jubilee Hotels Pvt. Ltd. [CA (AT)
the CoC. (Ins.) No. 501 of 2018]
25 Duties of RP
381. The goods lying in the form of KEC International Ltd. Vs. NCLT, 04.09.2020
raw material in the custody of CD Bhuvan Madan & Anr. [IA Ahmedaba
for processing is under the contract of No.139 of 2019 in CP (IB) No. d
bailment preventing the RP 137/7/NCLT/AHM/2018]
from withholding the same. The
RP was directed to handover the goods of
the applicant with the liberty to proceed
against the applicant under section 25(2) to
recover any sum, if due.
382. The act of RP to accept the resolution plan Kotak Investment Advisors Ltd. NCLAT 05.08.2020
after opening of other bid cannot be Vs. Krishna Chamadia & Ors.
justified by any means and is a blatant [CA (AT) (Ins.) No. 344-345 of
misuse of the authority invested in the RP 2020]
to conduct CIRP. It was further observed
that the material irregularity in exercise of
powers by the RP, even with the approval
of the CoC in the conduct of CIRP, cannot
be treated as an exercise of commercial
wisdom.
383. While making physical verification of Union Bank of India Vs. NCLT, 12.04.2018
debtors appearing in the records of the CD, Paramshakti Steel Ltd. [MA No. Mumbai
the RP found that some of them are not 243/2018 in C.P. No. (IB) 727
even aware of the CD. The AA suggested (MB)/2017]
the RP to initiate all steps available under
the Code to proceed against the
promoters/directors of the CD.
384. It is pertinent to mention that RP is duty State Bank of India Vs. Jet NCLT, 25.09.2019
bound to maintain CD as going concern. Airways (India) Ltd. [MA Mumbai
2955/2019 in C.P.(IB)-
2205/(MB)/2019]
385. 1. The RP has administrative powers as Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
opposed to quasi-judicial powers. Vs. Union of India & Ors. [WP
(Civil) Nos. 99, 100, 115, 459,
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
2. The RP is really a facilitator of the 598, 775, 822, 849, and 1221 of
resolution process, whose administrative 2018, SLP (Civil) No. 28623 of
functions are overseen by the CoC and by 2018 and WP (Civil) 37 of 2019]
the AA. Under the CIRP Regulations, the RP
has to vet and verify claims made, and
ultimately, determine the amount of each
claim.
386. The action or rather inaction by the RP in BMW India Financial Services NCLT, 16.10.2019
not taking a decision on the claim is his Pvt. Ltd. Vs. SK Wheels Pvt. Ltd. Mumbai
abuse of the power under the Code, and [MA No. 2319/2019 in CP(IB)
contrary to justice and public policy. 4301/ 2018]
387. The RP cannot go into investigations and Amit Gupta Vs. Yogesh Gupta NCLAT 20.12.2019
enquiries whether or not a CD is an MSME, [CA (AT) (Ins.) No. 903 of 2019]
and the AA is also not expected to make
such investigations, enquiries on such
evidence or give findings on such issues.
388. Whether a person is a secured or Tourism Finance Corporation of NCLAT 19.12.2019
unsecured creditor is a question of fact India Ltd. Vs. Rainbow Papers
normally determined by the RP or the CoC. Ltd. & Ors. [CA (AT) (Ins.) No.
354 of 2019 and other appeals]
389. RP has no jurisdiction to determine a claim. S. Rajendran Vs. Jonathan NCLAT 01.10.2019
He can only collate it, based on evidence Mouralidarane [CA (AT) (Ins.)
and the record of the CD, or as filed by the No. 1018 of 2019]
FC.
390. After the constitution of the CoC, without Asset Reconstruction Company NCLAT 18.11.2019
its permission, the RP was not competent (I) Ltd. (ARCIL) Vs. Koteswara
to entertain more applications after three Rao Karuchola & Ors. [CA (AT)
months to include one or other person as (Ins.) No. 633 of 2018]
FC.
391. The very object of the Code is to revive a Sunrise Polyfilms Pvt. Ltd. Vs. NCLT, 04.05.2018
company under CIRP and not to liquidate it. Punjab National Bank [Inv P.5 Ahmedaba
In the instant case, it is clear that the RP has of 2018 in IA 27 of 2018 in C.P. d
omitted to perform his statutory duties. It (I.B) No.
is amply clear that the RP has not invited 89/7/NCLT/AHM/2017]
prospective resolution applicants as per
section 25 of the Code. Therefore, the RP
was directed to act as per section 25 of the
Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
392. The nature of duties as assigned to the RP Numetal Ltd. Vs. Satish Kumar NCLT, 19.04.2018
is/are similar to public servant because he Gupta & Anr. [I.A. Nos. 98 & Ahmedaba
is appointee of the Court. other IAs in CP (IB) No. 40 of d
2017]
393. RP had acted against the mandate of Panna Pragati Infrastructure NCLAT 19.10.2020
provisions contained in sections 25(2) and Pvt. Ltd. & Anr. Vs. Amit Pareek
30(3) of the Code by not placing the revised & Ors. [CA (AT) (Ins.) No. 515 of
resolution plan before the CoC for 2020 and another appeal]
consideration. This was also contrary to the
objective of maximisation of value of assets
of CD.
394. RP should not be bombarded with criminal Subrata Monindranath Maity NCLT, 12.01.2021
prosecution and police investigation, (Bhatia Coke and Energy Ltd.) Chennai
because it would prevent the RP from Vs. Surender Singh Bhatia & 4
conducting CIRP without fear and favour. Ors. [IA/05/2021 in
AA while clarifying that it is not passing any IBA/307/2019]
orders on the merits of the FIRs filed
against RP by the erstwhile directors of the
CD, directed the police to give adequate
protection to the RP along with his team. It
further permitted the police to proceed as
per the Code of Criminal Procedure, 1973
but directed that no arrest shall be made
until the disposal of the application.
395. The SC was appalled with the Jaypee Kensington Boulevard SC 02.03.2021
developments leading to arrest of the IRP, Apartments Welfare
who was working pursuant to the order Association & Ors. Vs. NBCC
passed by the Court and entrusted with the (India) Ltd. & Ors. [Civil Appeal
functioning of the CD. It observed that the No(s). 3395/2020]
police official dealing with the case is not
familiar with the provision of privilege of
IRP appointed by the Court in terms of
section 233 of the Code. While directing
immediate release of the IRP, the SC
directed the investigation officer not to
take any coercive action against the IRP.
396. Allowing the advocate/chartered Propyl Packaging Ltd. Vs. NCLT, Kochi 21.01.2021
accountant/company secretary of the CD George Varkey, RP of Propyl
to attend CoC meetings would serve no Packaging Ltd. [M.A. No.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
purpose. The CD itself is sufficient to 162/KOB/2020 in IBA
provide any of the No.52/KOB/2019]
documents/papers/details sought by the
RP during the proceedings. Further, it is the
discretion of the RP to appoint
accountants, legal and other professionals
following the due process as specified by
the IBBI under section 25(2)(d) of the Code
and he is not permitted to disclose any
information pertaining to the CIRP to any
third parties including an
advocate/chartered accountant/company
secretary.
397. Regulation 36(2) of CIRP Regulations Periasamy Palani Gounder Vs. NCLAT 17.02.2022
provides the mandatory condition for Radhakrishnan Dharmarajan &
publication of ‘Form-G’ on the CD's website Anr. [CA (AT) (CH) (Ins.) No.
and the website designated by the Board 164, 176, 218 & 219 of 2021]
for the purpose. Non-publication of notices
of Form G is a material irregularity in
exercise of the powers by RP during the
CIRP.
27 Replacement of RP by CoC
398. CoC is not required to record any reason or Punjab National Bank Vs. Kiran NCLAT 06.08.2019
ground for replacing of the RP, which may Shah [CA (AT) (Ins.) No. 749 of
otherwise call for proceedings against such 2019]
RP. The CoC having decided to remove the
RP with 88% voting share, it was not open
to the AA to interfere with such decision, till
it is shown that the decision of the CoC is
perverse or without jurisdiction.
399. The proposed RP cannot be regarded as Mussadi Lal Kishan Lal Vs. Ram NCLT, New 15.05.2018
independent umpire to conduct CIRP as Dev Int. Ltd. [(IB)-178 Delhi
required by well settled practice. (PB)/2017]
400. The AA is also empowered to remove the Devendra Padamchand Jain Vs. NCLAT 31.01.2018
RP, apart from the CoC, but it should be for State Bank of India & Ors. [CA
the reasons and in the manner as provided (AT) (Ins.) No. 177 of 2017]
under the relevant provisions.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
401. The RP appealed against his replacement in Naveen Kumar Jain Vs. NCLAT 03.11.2020
a CIRP. While dismissing the appeal, it was Committee of Creditors of
observed that commercial wisdom of the K.D.K Enterprises Pvt. Ltd. &
CoC covers matters including replacement Ors. [CA (AT) (Ins.) No. 882 of
of the RP and it is neither under the limited 2020]
scope of judicial review nor it is justiciable.
402. GST amount is an amount of tax levied Bijoy Prabhakaram Pulipra, RP NCLAT 07.10.2021
under the assessment order as per the PVS Memorial Hospital Pvt. Ltd.
Goods and Service Act, 2017. It cannot be Vs. State Tax Officer (Works
edited or reduced by the RP himself as he is Contract) [CA (AT) (CH) (Ins.)
not having adjudicatory power under the No. 42 of 2021]
GST Act. If the IRP/RP is aggrieved, he can
file the appeal under section 107 of the
CGST/SGST Act, 2017, read with rule 108 of
the GST Rules 2017.
403. The scheme of section 27 does not indicate Sumat Kumar Gupta Vs. CoC of NCLAT 02.09.2022
that the erstwhile RP is entitled to be heard Vallabh Textiles Company Ltd.
before AA, when taking decision to appoint [CA (AT) (Ins.) No. 1037 of 2022]
another RP.
29A Persons not eligible to be resolution applicant
404. Section 29A or section 31 would not Sandip Kumar Bajaj & Anr. Vs. HC, 15.09.2020
provide a shield against the operation of State Bank of India & Anr. [I.A. Calcutta
section 14(3)(b) of the Code and that No. GA 1 of 2020 with (Old G.A.
CD/Promoter would not come under the 1062 of 2020) with W.P.O 236
immunity blanket of section 14 as the same of 2020]
is contrary to the law governing CIRP and
RBI guidelines.
405. The NCLAT held that if it comes to the State Bank of India Vs. Anuj NCLAT 18.11.2019
notice of the liquidator that a secured Bajpai [CA (AT) (Ins.) No. 509 of
creditor intends to sell the assets to a 2019]
person who is ineligible in terms of section
29A, it is always open to reject the
application under section 52(1)(b) read
with section 52(2) and (3) of the Code.
406. The certificate issued by the Ministry of K. Periyasamy & 1 another Vs. J. NCLT, 01.05.2019
MSME raises no objection to the fact that Manivannan [MA/347/2019 in Chennai
the CD is an MSME. Hence, clauses (c) and CP/422/IB/2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
(h) of section 29A are not applicable to the
CD.
407. Promoter, if ineligible under section 29A, Jindal Steel and Power Ltd. Vs. NCLAT 24.10.2019
cannot make an application for Arun Kumar Jagatramka & Anr.
compromise and arrangement for taking [CA (AT) No. 221 of 2018]
back the immovable and movable
properties or actionable claims of the CD.
408. The intention of the Legislature shows that Saravana Global Holdings Ltd. NCLAT 04.07.2019
the promoters of MSME should be & Anr. Vs. Bafna
encouraged to pay back the amount with Pharmaceuticals Ltd. & Ors. [CA
the satisfaction of the CoC to regain control (AT) (Ins.) No. 203 of 2019]
of the CD and entrepreneurship by filing
resolution plan, which is viable, feasible
and fulfils other criteria as laid down by the
IBBI.
409. The promoters/employees of the CD T. Johnson Vs. St. John Freight NCLAT 04.03.2020
without the knowledge of RP had secured Systems Ltd. & Anr. [CA (AT)
the registration certificate under the MSME (Ins.) No. 1402 of 2019]
Act to overcome the bar under section 29A
of the Code and submitted their resolution
plan. The same was not approved by the
CoC although no other resolution plan was
submitted and that the AA’s order of
liquidation of the CD does not have any
legal flaw.
410. Section 29A is a de facto as opposed to a de Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
jure position of persons mentioned therein. Satish Kumar Gupta and Ors.
This is a typical see through provision so [Civil Appeal Nos. 9402-9405 of
that one can see persons who are actually 2018 and other appeals]
in control, whether jointly or in concert. A
purposeful and contextual interpretation of
section 29A is imperative to pierce the
corporate veil to find out as to who are the
real individuals or entities who are acting
jointly or in concert for submission of a
resolution plan.
Sl. No. Section Dictum Citation Forum Date of
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Judgement
411. The defaulters disqualified under Section SBI Global Factors Ltd. Vs. NCLT, 08.04.2019
29A should not get any benefit under the Sanaa Syntex Pvt. Ltd. [MA Mumbai
Code. This is a clear message conveyed 1123/2018 in CP No. 172/
through section 29A. A defaulter must not IBC/NCLT/MB/MAH/2017]
be benefitted by entering into those very
assets through side doors, otherwise not
permitted to enter from the front doors, for
e.g. by submission of a resolution plan.
412. Constitutional validity of section 29A was Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
upheld. Vs. Union of India & Ors. [WP
(Civil) Nos. 99, 100, 115, 459,
598, 775, 822, 849, and 1221 of
2018, SLP (Civil) No. 28623 of
2018 and WP (Civil) 37 of 2019]
413. Upholding the constitutional validity of Arun Kumar Jagatramka Vs. SC 15.03.2021
regulation 2B of the Liquidation Process Jindal Steel and Power Ltd. &
Regulations, the SC held that prohibition in Anr. [Civil Appeal No. 9664 of
section 29A and section 35(1)(f) of the Code 2019 with other apeeals]
must also attach to a scheme of
compromise or arrangement under section
230 of the Companies Act, 2013 (scheme),
where a company is undergoing liquidation
under the Code. Even in the absence of said
regulation, a person ineligible under
section 29A read with section 35(1)(f) is not
permitted to propose a scheme for revival
of a company undergoing liquidation under
the Code. In case of a company undergoing
liquidation pursuant to the provisions of
Chapter III of the Code, a scheme is a facet
of the liquidation process. It would lead to
a manifest absurdity if the very persons
who are ineligible for submitting a
resolution plan, participating in the sale of
assets of the company in liquidation or
participating in the sale of the corporate
debtor as a ‘going concern’, are somehow
permitted to propose a scheme.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement

The same rationale which permeates the

resolution process under Chapter II (by
virtue of the provisions of section 29A)
permeates the liquidation process under
Chapter III (by virtue of the provisions of
section 35(1)(f)).
414. After CIRP was initiated former promoter/ Digambar Anandrao Pingle Vs. NCLAT 09.07.2021
director cannot suppress from IRP/RP and Shrikant Madanlal Zawar,
apply for MSME Certificate and tide over Erstwhile RP of M/s Pingle
ineligibility under section 29A of the Code. Builders Pvt. Ltd. & Ors. [CA
(AT) (Ins.) No. 43-43A of 2021]

415. The expression ‘control’ in section 29A(c) of

1. Telangana State Trade NCLAT 21.09.2021
the Code symbolizes only the positive Promotion Corporation Vs. A.P.
control i.e., that the mere power to block Gems & Jewellery Park Private
special resolutions of a Company cannot Limited & Anr. [CA (AT) (CH)
amount to control. In reality, the word (Ins.) No. 54 of 2021]
‘control’ juxtaposed with the term
‘management’ means de-facto control of
actual management or policy decisions that
may be or are in reality taken.
416. Section 29A(a) of the Code, which refers to2. Srei Multiple Asset Investment NCLAT 18.01.2022
‘an undischarged insolvent’ is applicable to Trust Vs. IDBI Bank Ltd. & Ors.
individuals and partnership firms. [CA (AT) (Ins.) No. 593 of 2020]

Section 29A(c) would not be applicable to

resolution applicants who acquire a CD
pursuant to a prior resolution plan
approved under the Code.
30 Submission of Resolution Plan
417. The AA, in law cannot enter into the arena CoC of Educomp Solutions Ltd. NCLAT 29.07.2020
of majority decision of the CoC other than Vs. Ebix Singapore Pte. Ltd. &
the grounds mentioned in section 32(a) to Anr. [CA (AT) (Ins.) No. 203 of
(e) of the Code. After due deliberations, 2020]
when the RP had accepted the conditions
of the resolution plan, especially keeping in
mind the ingredients of section 25(2)(h) of
the code to the effect that no change or
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
supplementary information to the
resolution plan shall be accepted after the
submission date of plan, then it is not open
to the resolution applicant to take a topsy
turvy stance and is not to be allowed to
withdraw the approved resolution plan.
418. The successful resolution applicant (SRA) Shree Sidhivinayak Cotspin Pvt. NCLAT 20.08.2020
cannot suddenly be faced with undecided Ltd. & Anr. Vs. RP of Marurti
claims after the resolution plan submitted Cotex Ltd. & Anr. [CA (AT) (Ins.)
by him has been accepted and that all No. 694 of 2020]
claims must be submitted to and decided
by the RP, so that a prospective resolution
applicant knows exactly, what has to be
paid, in order that it may then take over
and run the business of the CD.
419. The restructuring plan projected as a Bank of Baroda Vs. Sisir Kumar NCLAT 20.07.2020
resolution plan approved by the CoC could Appikatla Resolution & Ors. [CA
not be termed as a resolution plan within (AT) (Ins.) No. 579 of 2020]
the ambit of section 30 of the Code.

420. The RP, CoC and SRA already took note of The Karad Urban Cooperative SC 04.09.2020
the facts and yet took a conscious decision Bank Ltd. Vs. Swwapnil
to go ahead with the resolution plan, as Bhingardevay & Ors. [Civil
such it cannot be stated that the question Appeal Nos. 2955 of 2020 and
of viability and feasibility was not examined 2902 of 2020]
in the proper perspective.
421. No FC, including a secured creditor, can DBS Bank Ltd., Singapore Vs. NCLAT 18.11.2019
dissent on the ground that if it dissents Shailendra Ajmera & Anr. [CA
against the resolution plan, in spite of plan (AT) (Ins.) No. 788 of 2019]
being feasible and viable and in accordance
with section 30(2), just to get more amount
than the other secured creditor, can take
advantage of the amended section
30(2)(b)(ii).
422. The NCLAT concurred with the observation Superna Dhawan & Anr. Vs. NCLAT 14.05.2019
of the AA that resolution plan should be Bharti Defence and
planned for insolvency resolution of the CD Infrastructure Ltd. & Ors. [CA
as a going concern and not for addition of (AT) (Ins.) No. 195 of 2019]
value with intent to sell the CD. The
Sl. No. Section Dictum Citation Forum Date of
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Judgement
purpose to take up the company with the
intent to sell the CD is against the basic
object of the Code.
423. Section 30(2)(e) does not empower the RP Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
to decide whether the resolution plan does Satish Kumar Gupta and Ors.
or does not contravene the provisions of [Civil Appeal Nos. 9402 -9405 of
law. It is the CoC which will approve or 2018 and other appeals]
disapprove a resolution plan, given the
statutory parameters of section 30.
424. If goods have been supplied during the CIRP Sunil Jain Vs. Punjab National NCLAT 24.04.2019
period to keep the CD as going concern, it Bank & Ors. [CA (AT) (Ins.) No.
is the duty of the RP to include the costs on 156 of 2018 and other appeals]
such goods in the CIRP cost. If it is not
included, the resolution plan in question
can be held to be in violation of section
30(2)(a) of the Code.
425. While scrutinising the resolution plan Rajputana Properties Pvt. Ltd. NCLAT 15.05.2018
under section 30(2), the RP cannot hold or Vs. Ultra Tech Cement Ltd. &
decide as to who is ineligible under section Ors. [I.A. No. 594 of 2018 in CA
29A. Neither section 30(2) nor any other (AT) (Ins.) No. 188 of 2018]
provision in the Code confers such power
on the RP to scrutinise the eligibility of
resolution applicants.
426. Section 30(2) nowhere provides that each Rave Scans Pvt. Ltd. [(IB)- NCLT, New 17.10.2018
FC must get proportionately equivalent 01(PB)-2017] Delhi
share with other FCs. The only condition for
approving the resolution plan by the CoC is
by voting share of 75% as per the
requirements of section 30(4) (which has
now been reduced to 66% w.e.f.
06.06.2018).
427. The RP ought to follow provision of section Numetal Ltd. Vs. Satish Kumar NCLT, 19.04.2018
29A (c) read with section 30 (4) for the Gupta & Anr. [I.A. Nos. 98 & Ahmedaba
purpose of affording the opportunity to the other IAs in CP (IB) No. 40 of d
resolution applicants before declaring 2017]
them ineligible.
Sl. No. Section Dictum Citation Forum Date of
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Judgement
428. Primacy is given in the process to Chitra Sharma and Ors. Vs. SC 09.08.2018
commercial decisions. The success of the Union of India and Ors. [WP
process is contingent upon the competence (Civil) 744 of 2017 and other
of the IRP and the CoC. appeals]
429. Even though amended sub section (4) of SICOM Ltd. Vs. Alok Employees NCLAT 29.11.2018
section 30 came into force from Benefit and Welfare Trust &
06.06.2018, it is applicable to all resolution Ors. [CA (AT) (Ins.) No. 344 of
plans which were not approved by the CoC 2018]
or by the AA.
430. The CoC is empowered under section 30(4) State Bank of India Vs. NCLT, 20.03.2018
of the Code to independently consider the Electrosteel Steels Ltd. [CA (IB) Kolkata
question of eligibility of all applicants under No. 202-203/KB/2018 in CP (IB)
section 29A. No. 361/KB/2017]
431. The CoC has the primary responsibility of Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
financial restructuring. They are required to Vs. Union of India & Ors. [WP
assess the viability of a CD by taking into (Civil) Nos. 99, 100, 115, 459,
account all available information as well as 598, 775, 822, 849, and 1221 of
to evaluate all alternative investment 2018, SLP (Civil) No. 28623 of
opportunities that are available. The CoC is 2018 and WP (Civil) 37 of 2019]
required to evaluate the resolution plan on
the basis of feasibility and viability.
432. The word ‘may’ in section 30(4) is K. Sashidhar Vs. Indian SC 05.02.2019
ascribable to the discretion of the CoC to Overseas Bank & Ors. [Civil
approve the resolution plan or not to Appeal No. 10673 of 2018 and
approve the same. other appeals]
433. All OCs are ranked equal. Therefore, J.R. Agro Industries P Ltd. Vs. NCLT, 24’07.2018
resolution plan should not create classes of Swadisht Oils P Ltd. [CA No. 59 Allahabad
OCs and treat them differently. of 2018 in CP No. (IB)
13/ALD/2017]
434. Whenever, a resolution applicant's plan is Bank of Baroda and Binani NCLT, 04.05.2018
under consideration of CoC and that plan is Cements Ltd. & Ors. Vs. Mr. Kolkata
not at all placed before the AA for approval, Vijay Kumar V. iyer, [CA (IB)
and if another resolution applicant comes NO.201/KB/2018 and other
forward making an offer before the CIRP CAs/IAs in C.P.(IB) No.
duration expires, and that it satisfies all the 359/KB/2017]
stakeholders of the CD, then there is
nothing in the Code or Regulations to
Sl. No. Section Dictum Citation Forum Date of
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Judgement
prevent the CoC from considering a revised
offer of the other applicant.
435. Once the resolution plan has been Maharashtra Seamless Ltd. Vs. SC 22.01.2020
approved by the CoC, the AA ought to cede Padmanabhan Venkatesh &
ground to the commercial wisdom of the Ors. [Civil Appeal No. 4242 of
creditors rather than assess the resolution 2019 and another appeal]
plan itself.
436. If the resolution plan contemplates a Next Orbit Ventures Fund Vs. NCLAT 13.04.2021
change in the nature of business to another Print House (India) Pvt Ltd &
line when the existing business is obsolete Ors. [CA (AT) (Ins.) No. 417 of
or non-viable, it cannot be construed that 2020]
the resolution plan is not ‘feasible’ or
‘viable’. There is nothing in the Code which
prevents a resolution applicant from
changing the present line of business to
adding value or creating ‘synergy’ to the
existing assets and converting an obsolete
line of business to a more ‘viable and
feasible’ option.
437. At a belated stage when the resolution Harish Polymer Product Vs. NCLAT 18.06.2021
applicants are already before CoC with George Samuel & Anr. [CA (AT)
their resolution plans, if new claims keep (Ins.) No. 420 of 2021]
popping up and are entertained, the CIRP
would be jeopardized, and resolution
process may become more difficult.
438. A ‘resolution plan’ is not a recovery / sale / Dinesh Gupta Vs. Vikram Bajaj NCLAT 29.09.2021
auction / liquidation. Through a resolution Liquidator M/s Best Foods Ltd.
plan no individual is purchasing or selling [CA (AT) (Ins.) No.276 of 2021]
the CD.
439. There is no embargo for the classification of Gail India Ltd. Vs. Ajay Joshi NCLAT 04.10.2021
OCs into separate/different classes for (Resolution Professional of
deciding the way in which the money is to Alok Industries Ltd & Ors.) [CA
be distributed to them by the CoC because (AT) (Ins.) 492 of 2019]
of the fact, undoubtedly, they do have the
subjective final discretion of ‘Collective
Commercial Wisdom’ in relation to (the
quantum of money to be paid, to a certain
category or the incidental category of
Sl. No. Section Dictum Citation Forum Date of
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Judgement
creditors, of course, nicely balancing the
interests of the ‘stakeholders’ and the
‘OCs’, as the case may be.
440. The ‘Resolution Plan’ furnished by one or Committee of Creditors of NCLAT 25.10.2021
the other ‘Resolution Applicant’ is a Meenakshi Energy Ltd. Vs.
‘confidential’ one and it cannot be Consortium of Prudent ARC Ltd.
disclosed to any ‘Competing ‘Resolution & Vizaag Minerals and Logistics
Applicant’ nor any view can be taken, or Pvt. Ltd. [CA (AT) (CH) (Ins.)
objection can be asked for from other No.166 of 2021]
‘Resolution Applicants’ in regard to one or
the other ‘Resolution Plan’.
441. The resolution plan even prior to the Ebix Singapore Pvt. Ltd. Vs. SC 13.09.2021
approval of the AA is binding inter se the Committee of Creditors of
CoC and the SRA. The resolution plan Educomp Solutions Ltd. & Anr.
cannot be construed purely as a ‘contract’ [Civil Appeal No. 3224 of 2020
governed by the Indian Contract Act, in the with other appeals]
period intervening its acceptance by the
CoC and the approval of the AA.

The ability of the resolution plan to bind

those who have not consented to it, by way
a statutory procedure, indicates that it is
not a typical contract.
442. After adoption of swiss challenge method Jindal Stainless Ltd. Vs. Mr. NCLAT 18.01.2023
to find out the best plan, a resolution Shailendra Ajmera [CA (AT)
applicant cannot be allowed to submit a (Ins.) No. 1058 of 2022]
revised plan.
443. Even after completion of challenge Vistra ITCL (India) Ltd. Vs. NCLAT 02.03.2023
mechanism under regulation 39(1A)(b), the Torrent Investments Pvt. Ltd. &
CoC retain its jurisdiction to negotiate with Ors. [CA (AT) (Ins.) No. 132, 133
one or other resolution applicants, or to & 134 of 2023]
annul the resolution process and embark
on to re-issue RFRP. Regulation 39(1A)
cannot be read as a fetter on the powers of
the CoC to discuss and deliberate and take
further steps of negotiations with the RAs,
which resolutions are received after
completion of challenge mechanism.
Sl. No. Section Dictum Citation Forum Date of
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Judgement
444. Once a resolution plan is approved and Express Resorts and Hotels Ltd. NCLAT 09.02.2023
submitted to AA subsequently, CoC cannot Vs. Amit Jain, RP, Neesa Leisure
turn around and pray to the AA to send the Ltd. [CA (AT) (Ins.) No. 1158 of
plan back for consideration. The CoC being 2022]
satisfied that financial offer given by the RA
is satisfactory, exercises its commercial
wisdom, then even CoC cannot be allowed
to change its view, since it is bound by its
own decision taken in approving the
resolution plan.
445. The right to exclusive use of the trademarks SREI Multiple Asset Investment SC 17.03.2023
belonging to the CD is always available to Trust Vision India Fund Vs.
the SRA, but not the ownership rights. Deccan Chronicle Marketeers
Declaration of the ownership rights of the and Others [Civil Appeal No.
CD over trademarks, subsequent to 1706 of 2023 with other
approval of resolution plan, amounts to a appeals]
modification/alteration of the approved
resolution plan approved by CoC, which is
impermissible in law.
31 Approval of Resolution Plan
446. Once the resolution plan is approved under Shri Dutt India Pvt. Ltd Vs. NCLT, 21.09.2020
section 31 of the Code, all the assets and Office of the Sugar Mumbai
benefits of the contracts of the CD stands Commissioner [I.A. No. 1055 of
unconditionally transferred and assigned 2020 in C.P. (IB) No. 2956 of
and vested in the SRA free from all 2018]
encumbrances. All persons including
Central and State Governments as well as
the Local Authorities are bound by the said
Order.
447. A resolution applicant whose resolution Kundan Care Products Ltd. Vs. NCLAT 30.09.2020
plan stands approved by CoC, cannot be Amit Gupta and Ors. [CA (AT)
permitted to alter his position to the (Ins.) No. 653 of 2020]
detriment of various stake holders after
pushing out all potential rivals during the
bidding process, and the same fraught with
disastrous consequences for the CD which
may be pushed into liquidation, as the CIRP
period may by then be over thereby setting
at naught all possibilities of insolvency
Sl. No. Section Dictum Citation Forum Date of
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Judgement
resolution and protection of a CD, more so,
when it is a going concern.

448. Where the AA has approved a resolution Sunil Jain Vs. Punjab National NCLAT 24.04.2019
plan that provides for taking over the Bank & Ors. [CA (AT) (Ins.) No.
shares of the promoters, it is not required 156 of 2018 and other appeals]
to comply with the provisions of sections 56
and 57 of the Companies Act, 2013. The
same can be completed at the stage of
implementation of the resolution plan.
449. The proviso to sub-section 31(4) of Code Arcelormittal India Pvt. Ltd. Vs. NCLAT 16.12.2019
which relates to obtaining the approval Abhijit Guhathakurta & Ors.
from the CCI under the Competition Act, [CA (AT) (Ins.) No. 524 of 2019]
2002, prior to the approval of such
resolution plan by the CoC, is directory and
not mandatory.
450. The FCs and OCs whose claims have been Standard Chartered Bank Vs. NCLAT 04.07.2019
decided by the AA or the NCLAT, such Satish Kumar Gupta, R.P. of
decision being final is binding on all such Essar Steel Ltd. & Ors. [CA (AT)
FCs and OCs in terms of section 31 of the (Ins.) No. 242 of 2019 and other
Code. Their total claims stand satisfied and, appeals]
therefore, they cannot avail any remedy
under section 60(6) of the Code.
451. The legislature has not endowed the AA K. Sashidhar Vs. Indian SC 05.02.2019
with the jurisdiction or authority to analyse Overseas Bank & Ors. [Civil
or evaluate the commercial decision of the Appeal No. 10673 of 2018 and
CoC much less to enquire into the justness other appeals]
of the rejection of the resolution plan by
the dissenting FCs. The discretion of the AA
is circumscribed by section 31 to scrutiny of
resolution plan ‘as approved’ by the
requisite percent of voting share of FCs.
452. The resolution applicant is bound by the MSTC Ltd. Vs. Adhunik NCLAT 15.03.2019
mandate under section 30(2)(f) and shall Metalliks Ltd. & Ors. [CA (AT)
ensure that the resolution plan shall not be (Ins.) No. 519 of 2018 and
against any of the provisions of the existing another appeal]
law.
Sl. No. Section Dictum Citation Forum Date of
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Judgement
453. A resolution by CoC with less than 75% ICICI Bank Ltd. Vs. Innoventive NCLT, 08.12.2017
voting share in CoC is non est in law. Industries Ltd. [MA 557/2017 & Mumbai
other MAs in IA 72/2017 in C.P
01/I&BP/2016]
454. The AA is not expected to substitute its JEKPL Pvt. Ltd. [CA No. NCLT, 15.12.2017
view with commercial wisdom of the RP 223/2017 in CP No. Allahabad
and COC nor should it deal with technical 24/ALD/2017]
complexity and merits of resolution plan
unless it is found contrary to express
provision of law and goes against the public
interest. This observation finds support
from the UNCITRAL Legislative Guide,
which recommends for similar approach to
be taken by a court.
455. Either by principle or by jurisdictional Gupta Energy Pvt. Ltd. [MA 24, NCLT, 20.02.2018
aspect, the AA cannot say that 180/270 80 & 110/2018 in C.P. Mumbai
days’ period as procedural, therefore, it has No.43/I&BP/2017]
no jurisdiction to trespass into the domain
set out for the CoC except to the extent
mentioned in section 31 of the Code.
456. i. The RA after taking over the CD is entitled Facor Alloys Ltd. and Anr. Vs. NCLAT 25.11.2020
to exercise its right over its subsidiary Bhuvan Madan & Ors. [CA (AT)
company. Appellant’s objection regarding (Ins.) No. 340 of 2020]
the inclusion of the subsidiary company of
the CD in the resolution plan is not
sustainable.

ii. An approved resolution plan can deal

with the related party claim and extinguish
the same which will ensure that the SRA
can take over the CD on clean slate.

iii. The amendment to regulation 38(1) of

CIRP Regulations which mandated priority
in payment to dissenting FCs. This
amendment came into effect on November
27, 2019, i.e., post the approval of
resolution plan by the erstwhile CoC of the
CD.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement

iv. The approved resolution plan is not

discriminatory as it does not give
differential treatment among the same
class of FCs merely based on assenting or
dissenting FCs.
457. The law does not enjoin any right or power Singh Raj Singh Vs. SRS NCLAT 07.10.2020
to challenge the commercial wisdom of the Meditech Ltd. & Ors. [CA (AT)
CoC regarding approval of the resolution (Ins.) No. 522 of 2020]
plan which is undergoing implementation.
458. Though it is in the realm of the CoC to Oriental Bank of Commerce Vs. NCLT, New 15.12.2020
approve or reject a plan and of the Lotus Auto Engineering Ltd. & Delhi
liquidator to determine the value of the Ors. [IB-31(PB)/2018]
assets, such huge variations in values call
for enquiry. Considering the fact that the
CoC failed to approve a resolution plan
valued double the liquidation value and the
Liquidator set very low reserve price, the
AA directed IBBI to enquire into as to why
valuation has become so low after
liquidation is ordered and the FCs to
enquire as to whether its representatives
acted to maximise the value of the CD.
459. To assert that there is any scope for Committee of Creditors of SC 23.02.2021
negotiations and discussions after the AMTEK Auto Limited through
approval of the resolution plan by the CoC, Corporation Bank Vs. Dinkar T
would be plainly contrary to the terms of Venkatasubramanian & Ors.
the Code. [I.A. No. 58156 of 2020 in Civil
Appeal No. 6707 of2019 and
another petition]
460. i. The commercial wisdom of CoC has been Kalpraj Dharamshi & Anr. Vs. SC 10.03.2021
given paramount status without any Kotak Investment Advisors Ltd.
judicial intervention for ensuring & Anr. [Civil Appeal Nos. 2943-
completion of the stated processes within 2944 of 2020]
the timelines prescribed by the Code.

ii. There is an intrinsic assumption, that

financial creditors are fully informed about
the viability of the corporate debtor and
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
feasibility of the proposed resolution plan.
The opinion expressed by CoC after due
deliberations in the meetings through
voting, as per voting shares, is a collective
business decision.

iii. The legislature has consciously not

provided any ground to challenge the
“commercial wisdom” of the individual
financial creditors or their collective
decision before the AA and that the
decision of CoC’s ‘commercial wisdom’ is
made non justiciable.

iv. Appeal is a creature of statute and that

the statute has not invested jurisdiction
and authority either with NCLT or NCLAT, to
review the commercial decision exercised
by CoC of approving the resolution plan or
rejecting the same

v. The commercial wisdom of CoC is not to

be interfered with, excepting the limited
scope as provided under Sections 30 and 31
of the Code.
461. i. The role of CoC is akin to that of a Jaypee Kensington Boulevard SC 24.03.2021
protagonist, giving finality to the process Apartments Welfare
(subject to approval by the AA), who takes Association & Ors. Vs. NBCC
the key decisions in its commercial wisdom (India) Ltd. & Ors. [Civil Appeal
and the consequences thereof. The power No. 3395 of 2020 and other
of judicial review in section 31 of the Code appeals]
is not akin to the power of a superior
authority to deal with the merits of the
decision of any inferior or subordinate
authority. The AA has limited jurisdiction in
the matter of approval of a resolution plan,
which is well defined and circumscribed by
sections 30(2) and 31 read with the
parameters delineated by the SC in its
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
various judgments. Within its limited
jurisdiction, if the AA finds any shortcoming
in the resolution plan vis-à-vis the specified
parameters, it would only send the
resolution plan back to the CoC for re-
submission after satisfying the parameters
delineated by Code and exposited by the
SC.

ii. The process of simultaneous voting over

two plans for electing one of them cannot
be faulted. The legislature itself has made
the position clear by way of a later
amendment with effect from August 7,
2020, by specifically making stipulations for
simultaneous voting over more than one
resolution plan by the CoC, particularly
with amendment of sub-regulation (3) of
regulation 39 of CIRP Regulations and
insertion of sub-regulations (3A) and (3B)
thereto.

iii. The dissenting financial creditor is

entitled to receive the amount payable in
monetary terms and not in any other term.
It cannot be forced to remain attached to
the CD by way of equities or securities.

iv. The homebuyers as a class having

assented to the resolution plan of the
resolution applicant, any individual
homebuyer or any association of
homebuyers cannot maintain a challenge
to the resolution plan and cannot be
treated as a dissenting FC or an aggrieved
person.
462. A SRA cannot be permitted to withdraw the Seroco Lighting Industries Pvt. NCLAT 10.12.2020
approved resolution plan, coupled with the Ltd. Vs. Ravi Kapoor, RP for
fact in the instant case being the sole RA in
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
the CIRP, which is an MSME and having Arya Filaments Pvt. Ltd. & Ors.
knowledge of the financial health of the CD [CA (AT) (Ins.) No. 1054 of 2020]
as a promoter or as a connected person
cannot be permitted to seek revision of the
approved plan, on the ground which would
not be a material irregularity within the
ambit of section 61(3) of the Code.
463. Once a resolution plan is approved by the Ghanashyam Mishra and Sons SC 13.04.2021
AA under section 31(1), the claims as Pvt. Ltd. Vs. Edelweiss Asset
provided in the resolution plan shall stand Reconstruction Company Ltd. &
frozen and will be binding on the CD and its Ors. [CA No. 8129 of 2019 with
employees, members, creditors, including other appeals]
the central government, any state
government or any local authority,
guarantors, and other stakeholders. On the
date of approval of resolution plan by the
AA, all such claims, which are not a part of
resolution plan, shall stand extinguished
and no person will be entitled to initiate or
continue any proceedings in respect to a
claim, which is not part of the resolution
plan.
464. The sanction of a resolution plan and Lalit Kumar Jain Vs. Union of SC 21.05.2021
finality imparted to it by section 31 does India & Ors. [Transferred Case
not per se operate as a discharge of the (Civil) No. 245/2020 and other
guarantor’s liability. writ petitions]

465. The existing insolvency framework in India Ebix Singapore Pvt. Ltd. Vs. SC 13.09.2021
provides no scope for effecting further Committee of Creditors of
modifications or withdrawals of CoC Educomp Solutions Ltd. & Anr.
approved resolution plans, at the behest of (Civil Appeal No. 3224 of 2020
the SRA once the plan has been submitted and other appeals]
to the AA.
A submitted resolution plan is binding and
irrevocable as between the CoC and the
SRA.
466. Sufficiency or insufficiency of the amount in Deputy Commissioner, CGST NCLAT 16.07.2021
a resolution plan is a matter of commercial Kalol, Gujrat Vs. Gopala
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
decision of the CoC and it would not be Polyplast Ltd. [CA (AT) (Ins.) No.
appropriate on the part of NCLAT to 477 of 2021]
interfere with the same.
467. SRA filed an application to increase the BRS Ventures Investment Ltd. NCLAT 09.08.2021
authorised share capital without paying Vs. Registrar of Companies,
any fees/stamp duty to the Registrar of Guwahati [CA (AT) (Ins.) No.
Companies. It was observed that when a 1028 & 1042 of 2020]
new company takes over and starts on a
new slate and take certain management
decision then everything cannot be
exempted at a later stage.
468. There is no vested right or fundamental Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
right in the resolution applicant to have its Satish Kumar Gupta and Ors.
resolution plan approved. [Civil Appeal Nos. 9402 to 9405
of 2018]
469. ‘Success fees’ which is more in the nature Jayesh N. Sanghrajka Vs. The NCLAT 20.09.2021
of contingency and speculative is not part Monitoring Agency nominated
of the provisions of the Code and the by the Committee of Creditors
Regulations, and the same is not of Ariisto Developers Pvt. Ltd.
chargeable by IP. [CA (AT) (Ins.) No. 392 of 2021]
470. After portion of Part III has been applied to Nitin Chandrakant Naik & Anr. NCLAT 26.08.2021
personal guarantors of CDs, one would Vs. Sanidhya Industries LLP &
have to resort to those provisions under Ors. [CA (AT) (Ins.) No. 257 of
Code if personal guarantors of CDs are to 2020]
be proceeded against.
471. Any statutory or legitimate dues which Damodar Valley Corporation NCLAT 01.10.2021
might be demanded from the SRA for Vs. Cosmic Ferro Alloys Ltd. and
supply of any services should be paid by the Anr. [CA (AT) (Ins.) No. 110 of
SRA and no waiver for any period of time 2020]
for the future is permissible.
472. Income Tax Department cannot raise Murli Industries Ltd. Vs. HC, 23.12.2021
claims against the CD once the resolution Assistant Commissioner of Bombay
plan is approved. Income Tax & Ors. [Writ
petition no. 2948 and 2965 of
Once the public announcement is made 2021]
calling upon all concerned, including the
statutory bodies, to raise claims, it would
be expected from all the stakeholders to
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
diligently raise their claims. Having failed to
do so, the claim stands extinguished.
473. If the CD is an MSME it is not necessary for C. Raja John Vs. R. NCLAT 01.12.2021
the Promoters to compete with other RA to Raghavendran & Ors. [CA (AT)
regain the control of the CD. (CH) (Ins.) No. 207 of 2021]

474. Post approval of the resolution plan, the AA Bank of India Vs. Tirupati NCLT, New 01.11.2021
does not have any jurisdiction under the Infraprojects Pvt. Ltd [C.A No. Delhi
Code to reopen or modify or revisit the 719(PB)/2020 and C.A No. 1247
plan. (PB)/2019 in IB-104 (PB)/2017]
475. The resolution plan even though it is not a Association of aggrieved NCLAT 20.01.2022
confidential document after its approval, workmen of Jet Airways (India)
cannot be made available to each and to Ltd. Vs. Jet Airways (India) Ltd.
anyone who has no genuine claim or & Ors. [CA (AT) (Ins.) No. 643 of
interest in the process. On various grounds 2021 & I.A. No. 1700 of 2021]
the access to resolution plan even if it is not
a confidential document after approval,
can be denied in proper and appropriate
cases.
476. There is no scope for negotiations between Ebix Singapore Pvt. Ltd. Vs. SC 13.09.2021
the parties once the resolution plan has Committee of Creditors of
been approved by the CoC. The contractual Educomp Solutions Ltd. & Anr.
principles and common law remedies, [Civil Appeal No. 3224 of 2020
which do not find a tether in the wording or with other appeals]
the intent of the Code, cannot be imported
in the intervening period between the
acceptance of the CoC and the approval by
the AA.
477. The FCs or OCs who are related parties, Periasamy Palani Gounder Vs. NCLAT 17.02.2022
cannot be discriminated against under the Radhakrishnan Dharmarajan &
resolution plan, denying their right to get Anr. [CA (AT) (CH) (Ins.) No.
payments under the resolution plan only on 164, 176, 218 & 219 of 2021]
being a related party.
By getting only payment under the
resolution plan, related party creditors
could in no way sabotage the CIRP.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
478. The approval of a resolution plan in respect Maitreya Doshi Vs. Anand Rathi SC 22.09.2022
of one borrower cannot certainly discharge Global Finance Ltd. and Anr.
a co-borrower. [Civil Appeal No. 6613 of 2021]

If there are two borrowers or if two

corporate bodies fall within the ambit of
CD, there is no reason why proceedings
under section 7 of the Code cannot be
initiated against both the CDs. Needless to
mention, the same amount cannot be
realised from both the CDs. If the dues are
realised in part from one CD, the balance
may be realised from the other CD being
the co-borrower. However, once the claim
of the FC is discharged, there can be no
question of recovery of the claim twice
over.
479. Permitting successful resolution applicant Shraddha Buildcon Pvt. Ltd. Vs. NCLAT 28.09.2022
to withdraw after the resolution plan has The Dhar Textile Mills Ltd. [CA
been approved by the CoC and the AA, will (AT) (Ins.) No. 1128 of 2022]
have serious disastrous effect on whole
purpose and object of the Code.
480. A resolution plan approved by CoC, which is Punjabi Accessoriez Private NCLT 17.03.2023
comprised of related parties of the CD, is Limited Vs. Kredo Beauty Pvt.
void ab initio as it violates section 21(2) Ltd. [IA. No. 611/ND/2021 in CP
read with section 30(2)(e) of the Code. No. (IB)- 1164 (ND)/2019]
481. An unsuccessful RA has no locus standi to M.K. Rajagopalan Vs. S. NCLAT 17.03.2023
assail a resolution plan or its Rajendran and Anr. [IA No. 215
implementation, since it is not a of 2023 in CA (AT) (CH) (Ins.)
‘stakeholder’ under section 31(1). No. 58 of 2023]
32A Liability for prior offences, etc.
482. Considering the object behind the SBER Bank Vs. Varrsana Ispat NCLT, 22.07.2020
introduction of section 32A, the section is Ltd. [C.P. (IB) No. 543/KB/2017] Kolkata
also applicable to the CD undergoing
liquidation as well, and the liquidator can
file an application under the same.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
483. CD would not be liable for any offence Tata Steel BSL Ltd. & Anr. Vs. HC, New 16.03.2020
committed prior to commencement of the Union of India & Anr. [W.P. Delhi
CIRP. (CRL) 3037/2019 & CRL.M.A.
39126/2019]
484. Section 32A (2) of the Code will not apply to Raj Kumar Ralhan Vs. Deputy NCLT, 06.05.2020
the provisional attachment order under the Director, ED and Ors. [IA No. 54 Hyderabad
PMLA. of 2020 in CP (IB) No.
43/07/HDB/2018]
485. The ED/other investigating agencies do not JSW Steel Ltd. Vs. Mahender NCLAT 17.02.2020
have the powers to attach assets of a CD, Kumar Khandelwal & Ors. [CA
once a resolution plan stands approved and (AT) (Ins.) No. 957 of 2019 and
the criminal investigation against the CD other appeals]
stands abated.
486. The extinguishment of the criminal liability Manish Kumar Vs. Union of SC 19.01.2021
of the CD is apparently important to the India & Anr. [Writ Petition (C)
new management to make a clean break No. 26 of 2020 with other writ
with the past and start on a clean slate. The petitions]
provision is carefully thought out. It is not
as if the wrongdoers are allowed to get
away. They remain liable.
487. In light of the facts that (i) a resolution plan Deewan Housing Finance HC 16.11.2021
in regard to CD has been approved by AA, Corporation Ltd. Vs. Union of
(ii) same has resulted in change in India [Writ Petition No. 3157 of
management of the CD, and (iii) the change 2021]
in management is in favour of persons who
are not related to party of CD, immunities
under section 32A of the Code cannot be
denied to the CD.
488. The date when the AA came to approve the Nitin Jain Liquidato PSL Ltd. Vs. HC, Delhi 15.12.2021
sale of the CD as a going concern, the Enforcement Directorate,
cessation as contemplated under section PMLA [W.P(C) 3261/2021, CM
32A did and would be deemed to have APPLs. 32220/2021,
come into effect. 41811/2021]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
489. Section 32A creates a specific bar with M/s Packwell (India) Ltd. Vs. NCLT, 05.12.2022
respect to proceedings that may be M/s Emgee Cables and Jaipur
initiated under the PMLA. Moreover, Communication Ltd. [IA No.
Section 32A cannot possibly be read as 15/JPR/2022 in CP No. (IB)-
being applicable prior to a Resolution Plan 601/ND/2018]
being approved or a liquidation measure
being enforced. The objective and intention
of the Code is providing a free hand to the
creditors if the properties of the Corporate
Debtor are attached then it will jeopardize
the Liquidation Process.
490. After approval of resolution plan by AA, in Ajay Kumar Radheshyam SC 15.03.2023
the light of section 32A, the criminal Goenka. Vs. Tourism Finance
proceedings under section 138 of the NI Act Corporation of India Ltd.
will stand terminated only in relation to the [Criminal Appeal No. 172 of
CD. 2023]

33 Initiation of Liquidation
491. The CoC unanimously decided to send the Edelweiss Asset Reconstruction NCLAT 14.08.2020
CD into liquidation for want of resolution Co. Ltd. Vs. Shri Shyam Sundar
plans. Once the application under section Rathi & Anr. [CA (AT) (Ins.) No.
33 was moved it was left with no option but 683 of 2020]
to order liquidation.
492. Liquidation was ordered by the AA as a last Siva Rama Krishna Prasad Vs. S NCLAT 04.09.2020
option since there was no response from Rajendran & Ors. [CA (AT) (Ins.)
any viable prospective resolution applicant, No. 751 of 2020 and another
despite an extension of time period. appeal]

493. The decision of CoC to liquidate the CD Sunil S. Kakkad Vs. Atrium NCLAT 10.08.2020
without taking any steps for resolution of Infocom Pvt. Ltd. and Ors. [CA
the CD is covered under the Explanation to (AT) (Ins.) No. 194 of 2020]
sub-clause (2) of section 33 of the Code
which is based on the commercial wisdom
and is non-justiciable given the law laid by
the SC in case of K. Sashidhar vs. Indian
Overseas Bank.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
494. In the event of liquidation, the amount to RMS Employees Welfare Trust NCLAT 30.05.2019
be paid to the Central Government or the Vs. Anil Goel [CA (AT) (Ins.) No.
State Government against the operational 699 of 2018]
debt should not be less than an amount to
be paid to the OC.
495. After completion of CIRP period, ordering Nathella Sampath Jewelry Pvt. NCLT, 03.01.2020
liquidation, will not have any bearing on Ltd. [MA/1147/2019 & Chennai
PMLA proceedings. MA/547/2018 in
CP/129/IB/CB/2018]
496. The AA directed liquidation of the CD GNB Technologies (India) Pvt. NCLT, 08.11.2019
without admission and appointment of IRP. Ltd. [C.P. (IB) No. 167/BB/2019] Bengaluru

497. The CoC has no role to play after the order Punjab National Bank Vs. Mr. NCLAT 21.01.2020
of liquidation. They are mere claimants, Kiran Shah [CA (AT) (Ins.) No.
whose matters are to be determined by the 102 of 2020]
liquidator. They cannot move an
application for removal of the liquidator.
498. During the liquidation process, it is Y. Shivram Prasad Vs. S. NCLAT 27.02.2019
necessary to take steps for revival and Dhanapal& Ors. [CA (AT) (Ins.)
continuance of the CD by protecting it from No. 224 of 2018 and another
its management and from a death by appeal]
liquidation.
499. An appeal against a liquidation order Ratna Singh and Anr. Vs. Theme NCLAT 18.11.2020
passed under section 33 may be filed on the Export Pvt. Ltd. & Anr. [CA (AT)
grounds of material irregularity or fraud (Ins.) No. 917 of 2020]
committed in relation to liquidation order.
The Code is not for initiating proceedings
for prevention of oppression and
mismanagement but is armed with
provisions for initiation of actions against
wrong doers/illegal transactions, etc.
500. The moratorium under section 14 of the Bhavarlal Mangilal Jain & Anr. NCLT, 26.11.2020
Code comes to an end on passing of the Vs. Metal Link Alloys Ltd. & Ors. Ahmedaba
order of liquidation. As per section 33(5) of [IA 361 of 2018 in CP(IB) 67 of d
the Code, the legal proceedings can be 2017]
continued against the CD during
liquidation.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
501. i. Section 279 of the Companies Act, 2013 Chennai Metro Rail Ltd. Vs. HC, Madras 15.10.2020
applies only in cases of winding up under Lanco Infratech Ltd.
the Companies Act, 2013 and not the Code; (Represented by the
Liquidator) & Ors. [Application
ii. Section 279 of the Act deals with both No. 2826 of 2019]
pending suits and institution of new suits,
while section 33(5) of the Code deals with
new proceedings; and

iii. Section 33(5) of the Code overrides

section 279 of Act, by virtue of section 238
and by the principle ‘special law overrides
general law’.
502. The Code provides for liquidation of the CD Orbit Electro Equipments Pvt. NCLAT 02.07.2021
in case of failure of the approved resolution Ltd. & Anr. Vs. Mr. Kapil Dev
plan. Under no circumstance on the failure Taneja & Anr. [CA (AT) (CH)
of the approved resolution plan, CoC is (INS.) No. 142 of 2021]
empowered for fresh consideration. While
dealing with insolvency matters, the role of
AA is confined to the four corners of the
Code.
503. CoC must first explore the possibility of Dharm Vir Gupta Vs. SARE NCLT 16.03.2023
resolution of the CD instead of deciding its Realty Projects Pvt. Ltd.
liquidation summarily. [Company Petition No. (IB)-
684(ND)/2020]
34 Appointment of Liquidator and fee to be paid
504. AA was well within its jurisdiction to engage Sandeep Kumar Gupta Vs. NCLAT 28.02.2018
another person as RP or Liquidator as the Stewarts & Lloyds of India Ltd.
performance of the previous RP was & Anr. [CA (AT) (Ins.) No. 263 of
unsatisfactory. 2017 and another appeal]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
505. Interest of FCs as well as other creditors will Vijay Kumar Singh Vs. Anil NCLAT 09.11.2020
remain even during liquidation Kumar & Ors. [CA (AT) (Ins.) No.
proceedings. 391 of 2020]

Accordingly, AA should have considered

appointing any other IP as liquidator when
it was evident that the CIRP has not been
conducted in a way desired, before passing
the liquidation order.
35 Powers and Duties of Liquidator
506. The liquidator is duty bound to exercise his Nicco Corporation Ltd. in NCLT, 24.11.2017
powers under the Code and does not Liquidation [C.A. (IB) No. Kolkata
require the prior permission of AA for every 487/KB/2017 connected to C.P.
action to be performed under the Code. No. 03/2017]
507. Liquidator has a duty under section 35(1)(k) Reliance India Power Fund Vs. NCLAT 24.02.2020
of the Code but the FC has no right to force Raj Kumar Ralhan [CA (AT)
the liquidator to take part in the arbitration (Ins.) No. 318 of 2020
proceedings. The duty of the liquidator
would include a conscious decision not to
take part in the proceedings.
508. Liquidator is only an additional person and Rasiklal S. Mardia Vs. Amar Dye NCLAT 08.04.2019
not exclusive person who can move an Chem Ltd. & Ors. [CA (AT) No.
application under section 391 of the 337 of 2018]
Companies Act, 1956, when the company is
in liquidation.
509. The liquidator is duty bound to make every B.R. Traders Vs. NCLAT 13.11.2019
endeavour to protect and preserve the Venkataramanarao Nagarajan
value of the property of the CD and manage & Ors. [CA (AT) (Ins.) No. 189 of
the operations as a going concern. 2019 and other appeals]
510. The liquidator has been endowed with very IFCI Ltd. & Ors. Vs. BS Ltd. (in NCLT, 07.01.2021
wide powers as a quasi-judicial functionary liquidation) IA No. 1148/2020 Hyderabad
under the Code. Section 35(2) empowers in CP(IB) No. 278/7/HDB/2018]
the liquidator to consult any of the
stakeholders entitled to a distribution of
proceeds under section 53, but the proviso
makes it amply clear that such consultation
is not binding on the liquidator.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
511. Liquidator ought to do preliminary In the matter of C. NCLT, 05.07.2021
investigation of the scheme received by Ramasubramaniam Chennai
him under section 230(1) of the Companies (Liquidator) M/s Aqua Designs
Act 2013, before filling the application with India Pvt. Ltd.
AA. Unless the person funding the scheme [CA/342/CAA/2020 in
and the person who is willing to invest in CP/1022/IB/2018]
the company are verified and only on being
satisfied, the same ought to have been filed
before the AA for approval.
512. The sale by a liquidator under the Code is a Cotton Casuals (India) Pvt. Ltd. NCLAT 17.12.2021
sale on behalf of the CD and cannot be Vs. Kanchan Dutta, Liquidator
termed as ‘involuntary sale’. & Anr. [CA (AT) (Ins.) No. 206 of
2021
513. The timeline prescribed in regulation 35A Aditya Kumar Tibrewal Vs. Om NCLAT 06.04.2022
of the CIRP Regulations is only directory Prakash Pandey & Ors. [CA (AT)
and any action taken by the RP beyond the (Ins.) No. 583 of 2021]
time prescribed under regulation 35A of
the CIRP Regulations cannot be held to be
non-est or void only on the ground that it is
beyond the period prescribed under
regulation 35A of the CIRP Regulations.
36 Liquidation estate
514. All sums due to any workman or employees Savan Godiwala Vs. Apalla Siva NCLAT 11.02.2020
from the provident fund, pension fund and Kumar [CA (AT) (Ins.) No. 1229
the gratuity fund, do not form part of the of 2019]
liquidation estate/liquidation assets of the
CD.
515. The order of attachment by the tax Leo Edibles & Fats Ltd. Vs. The HC, 26.07.2018
authorities constituting an encumbrance Tax Recovery Officer (Central) Hyderabad
on the property, does not have the effect of IT Dept. Hyderabad [Writ
taking it out of the purview of section Petition No. 8560 of 2018]
36(3)(b) of the Code.
516. Dues payable under sub-section 7A, 7Q and V-Con Integrated Solutions Pvt. NCLT, Kochi 18.02.2021
14B of the Employees Provident Funds and Ltd. Vs. Acharya Techno
Miscellaneous Provisions Act, 1952 (EPF & Solutions (India) Pvt. Ltd. &
MP Act, 1952) are statutory dues and not Anr. [I.A/176/KOB/2020 in
claims that can be submitted to the MA/05/KOB/2020 in
liquidator. TIBA/01/KOB/2019]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement

Section 53 of the Code is not applicable to

the recovery of dues which do not form
part of the liquidation estate under the
Code, by virtue of section 36(4)(a)(iii).

Further, the Employee's Provident Fund

Organization (EPFO) has got first charge
over the Assets of the defaulter and its
priority of payment over other debts is as
per Section 11 of the EPF & MP Act, 1952.
517. Provident fund dues are not the assets of Sikander Singh Jamuwal Vs. NCLAT 11.03.2022
the CD as per section 36 of the Code. Vinay Talwar and Ors. [CA (AT)
(Ins.) No. 483 of 2019]
In line with section 17B of the Employees
Provident Fund and Miscellaneous
Provisions Act, 1952, a resolution applicant
will also be liable to pay the contribution
and other sums due from the employer
under the said Act in respect of the period
upto the date of such transfer. The
provisions of the said Act need to be
complied with. It is not a commercial
wisdom as compliance of law is a must.
518. Section 36(4) of the Code has given outright Sunil Kumar Jain and Ors. Vs. SC 19.04.2022
protection to workmen’s dues under Sundaresh Bhatt and Ors. [Civil
provident fund, gratuity fund and pension Appeal No.5910 of 2019]
fund which are not to be treated as
liquidation estate assets and the liquidator
shall have no claim over such funds which
are specifically kept out of liquidation
estate assets and as per section 36(4) of the
Code, they are not used for recovery in the
liquidation.
519. It is the statutory obligation of the CD to Employees Provident Fund NCLAT 27.05.2022
contribute to the dues of workmen and Organisation Vs. Mr. Subodh
employees towards the provident fund, the Kumar Agarwal RP Ambient
pension fund and the gratuity fund. If
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
above funds are deficient or the CD has Computronics Pvt. Ltd. & Ors.
failed to perform its statutory obligation, it [CA (AT) (Ins.) No. 116 of 2022]
is the CD who has to make payment
towards the above funds which amounts
have to be kept out of the liquidation
assets.
520. The claim of those homebuyers/FC, who Puneet Kaur Vs. K V Developers NCLAT 01.06.2022
could not file their claims, but whose claims Pvt. Ltd. & Ors. [CA (AT) (Ins.)
were reflected in the record of the CD, Nos. 390, 391, 392, 393 & 394 of
ought to have been included in the 2022]
information memorandum and resolution
applicant, ought to have been taken note of
the said liabilities and should have
appropriately dealt with them in the
resolution plan. Non-consideration of such
claims, which are reflected from the record,
leads to inequitable and unfair resolution.
521. Section 18 of the Code clarifies that Jet Aircraft Maintenance NCLAT 21.10.2022
provident fund, gratuity and pension Engineers Welfare
fund are assets on which employees have Association Vs. Ashish
rights and cannot be considered as assets chhawchharia [CA (AT) (Ins)
of CD. It must be paid in full. 752 of 2021]

522. If the authorities were given a free hand Welspun Steel Resources HC, Gujarat 17.02.2023
to pass orders of attachment of Private Limited Vs. Union of
properties which were acquired by a India [R/Special Civil
successful bidder in a liquidation process, Application No. 19387 of
on a presumption that such acquisition 2022]
was as a result of a criminal activity, it
could be contrary to the interest of value
maximization of the CDs assets by
substantially reducing the chances of
finding a willing resolution applicant or a
bidder in liquidation.
523. The amount lying to the gratuity on C.G. Vijyalakshmi Vs. Shri NCLAT 08.02.2023
employees/workmen cannot be made Kumar Rajan, Resolution
available to the creditors and is not liable Professional and Ors. [Comp.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
to attachment under any decree or order App. (AT) (CH) (Ins.) No.
of any court as per section 10 of the EPF 29/2021 & other IAs]
& MP Act, 1952. The amount lying as
gratuity and EPF are not part of
liquidation estate.
37 Powers of Liquidator to access information
524. The liquidator has to perform his duties as Hema Manoj Shah Vs. NCLT, 17.07.2019
the officer of the court and he should never Gaurav Dave & Ors. Mumbai
be afraid of false complaints. [IA 2511/2019, MA 2400/
2019, MA 876/2019, in
MA 1082/2019, MA 2314/2019
CP (IB)-1882 (MB)/
2018]
42 Appeal against the decision of Liquidator
525. It is almost impracticable for the liquidator Bank of India Vs. V. Mahesh & NCLT, 03.09.2020
to follow the principles of natural justice Anr. [IA/497/2020 in Chennai
before admitting or rejecting a claim MA/289/2018 in
because he cannot be selective in his TCP/10/IB/2017 and
approach and if the same is applied IA/115/2020 in MA/289/2018
universally, it will make the timeline under in TCP/10/IB/2017]
the Code haywire and defeat the provisions
of Code.
43, 44 Preferential transactions and relevant time, Order in case of preferential transactions
526. The mortgage of land of the CD in favour of Anuj Jain Vs. Manoj Gaur & Ors. NCLT, 16.05.2018
a creditor amounts to transfer of interest in [CA No. 26/2018 in CP No. Allahabad
the property of the CD for the benefit of the (IB)77/ALD/2017]
creditor, and putting it in a beneficial
position vis-à-vis other creditors, is a
preferential transaction.
527. Section 43 of the Code is applicable during K.L. Jute Products Pvt. Ltd. Vs. NCLAT 20.02.2020
the pendency of resolution process or Tirupti Jute Industries Ltd. &
liquidation proceedings, if there are Ors. [CA (AT) (Ins.) No. 277 of
genuine, reasonable grievances relating to 2019]
preferential transactions at a relevant time.
A liquidator by filing an application can seek
one or other order from the AA as per
section 44 of the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
528. To invoke section 43 of the Code, there S. V. Ramkumar Vs. Orchid NCLT, 04.07.2019
shall be two elements in the given facts, (1) Health Care Pvt. Ltd. & Ors. Chennai
there shall be transfer of property or [MA/86/2018 in
interest from CD to a creditor, (2) and it CP/540/IB/CB/2017]
must be for the benefit of such creditors in
preference to the other creditors of the CD
in the event of a distribution of assets being
made in accordance with section 53 of the
Code.
529. (a) Preferential Transactions: A CD shall be Anuj Jain Vs. Axis Bank Ltd. & SC 26.02.2020
deemed to have given a preference at a Ors. [Civil Appeal Nos. 8512-
relevant time if: (i) there is a transfer of 8527 of 2019 with other
property or the interest thereof of the CD appeals]
for the benefit of a creditor or surety or
guarantor for or on account of an
antecedent financial debt or operational
debt or other liability; (ii) such transfer has
the effect of putting such creditor or surety
or guarantor in a beneficial position than it
would have been in the event of
distribution of assets in accordance with
section 53 of the Code; and (iii) preference
is given, either during the period of two
years/one year preceding the ICD when the
beneficiary is a related/an unrelated party.
However, such deemed preference may
not be an offending preference, if it falls
into any or both exclusions provided by
section 43(3).

Section 43(3)(a) exempts transfers made in

ordinary course of business of the CD or the
transferee. This calls for purposive
interpretation. The expression ‘or’,
appearing as disjunctive between the
expressions ‘corporate debtor’ and
‘transferee’, ought to be read as ‘and’.
Therefore, a preference shall not include
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
the transfer made in the ordinary course of
the business of the CD and the transferee.

(b) Duties and responsibilities of RP: The

RP shall –
(i) sift through all transactions relating to
the property/interest of the CD backwards
from the ICD and up to the preceding two
years;
(ii) identify persons involved in the
transactions and put them in two
categories: (1) related party under section
5(24) and (2) remaining persons;
(iii) identify which of the said transactions
of preceding two years, the beneficiary is a
related party of the CD and in which the
beneficiary is not a related party. The sub-
set relating to unrelated parties shall be
trimmed to include only the transactions
preceding one year from the ICD;
(iv) examine every transaction in
each of these sub-sets to find out whether
(1) the transaction is of transfer of property
of the CD or its interest in it; and (2)
beneficiary involved in the transaction
stands in the capacity of
creditor/surety/guarantor;
(v) scrutinise the shortlisted transactions to
find, if the transfer is for or on account of
antecedent financial debt/operational
debt/other liability of the CD;
(vi) examine the scanned and scrutinised
transactions to find, if the transfer has the
effect of putting such
creditor/surety/guarantor in beneficial
position, then it would have been in the
event of distribution of assets under
section 53. If answer is in the affirmative,
the transaction shall be deemed to be of
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
preferential, provided it does not fall within
the exclusion under section 43(3); and then
(vii) apply to the AA for
necessary orders, after carrying
out the aforesaid volumetric and
gravimetric analysis of the transactions.

(c) Undervalued and fraudulent

transactions: As the transactions
are held as preferential, it is not necessary
to examine whether these are undervalued
and/or fraudulent. In preferential
transaction, the question of intent is not
involved and by virtue of legal fiction, upon
existence of the given ingredients, a
transaction is deemed to be of giving
preference at a relevant time, while
undervalued transaction requires different
enquiry under sections 45 and 46 where
the AA is required to examine the intent, if
such transactions were to defraud the
creditors. The AA needs to examine the
aspect of preferential, undervalued and
fraudulent separately and distinctively.
530. Unlike other types of transactions provided Thomas George Vs. K. Easwara NCLAT, 05.12.2022
under the Code, there is no specified look Pillai & Ors. [CA (AT) (CH) (Ins.) Chennai
back period for fraudulent trading under No. 293 of 2021]
section 66. RP is allowed to retrieve
without any limitation of time and correct
all the wrongdoings for any relevant point
of time.
531. (a)Avoidance applications and CIRP are Tata Steel BSL Ltd. Vs. Venus HC, New 31.01.2023
distinct and independent proceedings, and Recruiter Private Ltd. & Ors. Delhi
the RP does not become functus officio on [LPA 37/2021 and C.M. Nos.
the conclusion of the CIRP, 2664/2021, 2665/2021 &
2666/2021]
(b) The avoidance applications can go
beyond the conclusion of CIRP; and
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement

(c) The proceeds of avoidance applications

are not for the RA but for the benefit of
creditors.

The Division Bench has set aside Single

Judge order dated 26.11.2020.

532. Allegations of preferential transaction as Mohan Lal Jain, in the capacity NCLAT 16.12.2020
also fraudulent trading/wrongful trading of Liquidator of Kaliber
carried on by the CD during the insolvency Associates Pvt. Ltd. Vs. Lalit
resolution can be inquired into by the AA. Modi & Ors. [CA (AT) (Ins.) No.
944 of 2020]
533. The RP is duty bound to file the application Suraj Fabrics Industries Ltd. & NCLT, 18.02.2021
for preferential transaction within time and Anr. Vs. Bipin Kumar Vohra & Kolkata
also seek for urgent hearing of the Ors. [IA (IB) No. 750/KB/2020 in
application before the plan is approved. CP (IB) No. 1635/KB/2018]
Once the resolution plan is approved, the
CD is managed by a new management and
the RP becomes functus officio. An
application for avoidance of preferential
transaction cannot be carried on by the RP
on behalf of the CD.
45, 46 Avoidance of undervalued transactions, Relevant period for avoidable transactions
534. The transactions as has been Axis Bank Ltd. Vs. Anuj Jain [CA NCLAT 01.08.2019
made i.e. mortgage(s) in favour (AT) (Ins.) No. 243 of 2018 with
of the appellants as and when other CAs]
made against the amount payable
by Jaiprakash Associates Limited,
the amount is not payable by the
CD. Therefore, clause (a) of sub-section (2)
of section 45 is not attracted. For the same
reason, clause (b) of sub-section (2) of
section 43 or section 45 cannot be made
applicable with regard to transaction in
question which are not related to any
payment due from the CD.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
535. The outcome of the avoidance transaction 63 Moons Technologies Ltd. Vs. NCLAT 27.01.2022
cannot be given to the SRA, and it must go The Administrator of Dewan
to the company's creditors. Housing Finance Corporation
Ltd. & Ors. [CA (AT) (Ins.) No.
454, 455 and 750 of 2021]
536. Section 46(2) empowers the AA to require Radico Trading Ltd. Vs. Tarun NCLAT 22.03.2022
an independent expert to assess evidence Batra (Insolvency Professional)
relating to the value of the transactions. & Ors. [CA (AT) (Ins.) No. 139 of
The power under section 46(2) is enabling 2022]
power and the expression used “may
require” indicates that it is not necessary
that for all applications under section 46(1),
there has to be mandatory expert
appointed by the AA.
52 Secured creditor in liquidation proceedings
537. If one or more secured creditors have not JM Financial Asset NCLAT 11.12.2019
relinquished the security interest and have Reconstruction Company Ltd.
opted to realise their security interest Vs. Finquest Financial Solutions
against the same asset in terms of section Pvt. Ltd. and Ors. [CA (AT) (Ins.)
52(1)(b) read with section 52(2) and (3), the No. 593 of 2019]
liquidator will act in terms of section 52(3)
and find out as to who has the first charge
(security interest). If any dispute is pending
as to the question of who has the first
charge, the liquidator may inform the same
to parties and proceed as per section 52(3).
538. If it comes to the notice of the liquidator State Bank of India Vs. Anuj NCLAT 18.11.2019
that a secured creditor intends to sell the Bajpai [CA (AT) (Ins.) No. 509 of
assets to a ‘person’ who is ineligible in 2019]
terms of section 29A, it is always open to
him to reject the application under section
52(1)(b) read with section 52(2) and (3) of
the Code.
539. Even during liquidation process, the B.R. Traders Vs. NCLAT 13.11.2019
liquidator is to ensure that CD remains a Venkataramanarao Nagarajan
going concern. If no arrangement or & Ors. [CA (AT) (Ins.) No. 189 of
scheme framed under sections 230 to 232 2019 with other CAs]
of the Companies Act, 2013 becomes
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
possible or the CD is not sold in its totality
along with the employees and there is no
option but to sell the assets of the CD and
to distribute the same amongst the
creditors in terms of section 53 read with
section 52 of the Code, the liquidator may
be asked to return the third party assets.
540. If the liquidator concludes that the In the matter of Clutch Auto NCLT, New 06.01.2020
claimants have security interest over the Ltd. [CA-1432(PB)/2019 & CA- Delhi
assets of the CD, he shall permit the 1433(PB)/2019 in (IB)-
creditors to utilise their rights under 15(PB)/2017]
section 52 of the Code. Application seeking
directions from AA against such creditors to
compel them to relinquish security
interest, is not supported by the Code.
541. Section 52(4) of the Code releases the Anuj Bajpai Vs. State Bank of NCLT, 08.04.2019
secured creditor from the clutches of the India [MA 1123/2018 in CP No. Mumbai
Code and gives liberty to recover its 172/IBC/NCLT/MB/MAH/2017]
security interest as per any other law which
may be applicable. Once the secured
creditor is out of liquidation under section
52(1)(b) of the Code, it is relieved from all
the clutches of the Code or the liquidation
process. To move under the Securitisation
and Reconstruction of Financial Assets and
Enforcement of Securities Interest Act,
2002 or any other Act, to sell the assets to
any party, is all the prerogative of the
secured creditor because his rights are
given a specific protection under the Code.
However, it has to be kept in mind that the
intent of the Code cannot be hampered by
allowing the promoters/directors a
backdoor entry in the liquidation process.
542. Only the first charge holder/secured Finquest Financial Solutions NCLT, 10.05.2019
creditor with the first pari-passu charge can Pvt. Ltd. Vs. Ravi Shankar Mumbai
stay outside the liquidation process and Devarakonda [M.A 1392/2019
realise his security interest in the manner in CP No.
provided under section 52(1)(b). 382/IB/MB/MAH/2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
543. Income-tax Department does not enjoy the Leo Edibles & Fats Ltd. Vs. The HC, 26.07.2018
status of a secured Tax Recovery Officer (Central) Hyderabad
creditor, on par with a secured creditor & Ors. [Writ Petition No. 8560
covered by a mortgage or other security of 2018]
interest, who can avail the provisions of
section 52 of the Code. At best, it can only
claim a charge under the attachment order,
in terms of section 281 of the Income-tax
Act, 1961.
544. Under section 52(3)(a) of theCode before Volkswagen Finance Pvt. Ltd. NCLAT 19.10.2020
any security interest is sought to be realised Vs. Shree Balaji Printopack Pvt.
by the secured creditor under this section, Ltd. & Anr. [CA (AT) (Ins.) No. 02
the Liquidator shall verify such security of 2020]
interest and permit the secured creditors to
realise only such security interest, the
existence of which may be proved either by
the records of such security interest
maintained by an IU or by such other
means as may be specified by IBBI.
53 Distribution of assets
545. Upon realisation of the liquidation estate of Shree Ram Lime Products Pvt. NCLT, 22.10.2019
the CD, it has to be distributed in Ltd. Vs. Gee Ispat Pvt. Ltd. [CA- New Delhi
accordance with the waterfall mechanism 666/2019 in (IB)-
under section 53 of the Code. The dues 250(ND)/2017]
towards the Government, be it tax on
income or sale of properties, would qualify
as ‘operational debt’ and has to be dealt
with accordingly. Further, the applicability
of section 178 or 194IA of the Income-tax
Act, 1961 will not have an overriding effect
over section 53 of the Code, and the capital
gains shall not be taken into consideration
as the liquidation cost.
546. Section 45 and 46 of the Income-tax Act, LML Ltd. Vs. Office of NCLT, 31.08.2020
1961 will not have an overriding effect on Commissioner of Income Tax, Allahabad
the waterfall mechanism provided under Mumbai [CA No. 389 of 2019 in
section 53 of the Code, which is a complete CP(IB) No. 55/ALD/2017]
Code in itself and thus capital gains shall
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
not be taken into consideration as the
liquidation cost.

547. Section 53 of the Code will not be followed Union of India Vs. NCLAT 12.03.2020
for distribution in the case as it would cause Infrastructure Leasing &
injustice to shareholders who have Financial Services Ltd. & Ors.
invested public money in Infrastructure [CA (AT) No. 346 of 2018with
Leasing & Financial Services Ltd. and its I.A. Nos. 3616, 3851, 3860,
group companies and therefore the pro- 3962, 4103, 4249 of 2019, 182,
rata distribution as proposed by the Central 185 of 2020 with other appeals]
Government was accepted.
548. There is an intelligible differentia between Swiss Ribbons Pvt. Ltd. &Anr. SC 25.01.2019
the financial debts and operational debts, Vs. Union of India & Ors. [WP
which are unsecured, which has direct (Civil) Nos. 99, 100, 115, 459,
relation to the object sought to be achieved 598, 775, 822, 849, and 1221 of
by the Code. It can be seen that unsecured 2018, SLP (Civil) No. 28623 of
debts are of various kinds and as long as 2018 and WP (Civil) 37 of 2019]
there is some legitimate interests sought to
be protected, having relation to the object
sought to be achieved by the statute in
question, Article 14 of the Constitution
does not get infracted. Accordingly, validity
of section 53 was upheld.
549. Section 53, including Explanation given Binani Industries Ltd. Vs. Bank NCLAT 14.11.2018
therein cannot be relied upon while of Baroda & Anr. [CA (AT) (Ins.)
approving the resolution plan. However, No. 82,123, 188,216 & 234 of
that does not mean that a discriminatory 2018]
plan can be placed and can get through on
one or other ground, which is against the
basic object of maximization of the assets
of the CD on one hand and for balancing the
stakeholders on the other.
550. Any shortfall in gratuity must be made over Autonix Lighting Industries Pvt. NCLT, New 19.11.2020
by the RP and payments of the dues has to Ltd. Vs. Moser Baer Electronics Delhi
be paid outside the waterfall mechanism. Ltd. [IA No. 412/2020 in CP No.
The RP was directed to release the dues of (IB)-1265(ND)/2019]
the ex-employees and deposit the
provident fund with EPFO and release
gratuity forthwith.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
551. Liquidation proceedings are time-bound to Pinakin Shah – Liquidator of NCLAT 25.02.2021
maximize the value and all the creditors are Brew Berry Hospitalities Pvt.
entitled to get their dues only in terms of Ltd. Vs. The Assistant
section 53 of the Code and different Commissioner of State Tax &
creditors cannot be allowed to resort to Anr. [CA (AT) (Ins.) No. 32 of
different proceedings and enactments only 2021]
because they are ‘authorities’ under earlier
enactments considering the provision of
section 238 of the Code.
552. In the normal parlance “going concern” sale Gaurav Jain Vs. Sanjay Gupta, NCLT, 09.03.2021
is transfer of assets along with the Liquidator of Topworth Pipes Mumbai
liabilities. However, as far as the ‘going and Tubes Pvt. Ltd. [IA No. 2264
concern’ sale in liquidation is concerned, of 2020 in CP (IB) No. 1239-MB-
there is a clear difference that only assets 2018]
are transferred and the liabilities of the CD
has to be settled in accordance with section
53 of the Code and hence the purchaser of
this assets takes over the assets without
any encumbrance or charge and free from
the action of the creditors.

Further, the decision to sell the CD as a

going concern is taken by the liquidator
himself or in consultation with the creditors
/ stakeholders and the proceeds from the
sale of assets are going to be utilised for
distribution to the creditors in the manner
specified under section 53 of the Code.
Hence all the Creditors of the CD get
discharged and the assets are transferred
free of any encumbrances. The legal entity
of the CD, however survives.
553. A conjoint reading of sections 52 and 53 of Technology Development NCLAT 05.04.2021
the Code leaves no room for doubt that the Board Vs. Anil Goel & Ors. [CA
legislature in its wisdom thought it proper (AT) (Ins.) No. 731 of 2020]
to provide an option to the secured creditor
armed with a security interest to choose
out of the two options, namely, either
enforce security interest against the asset
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
out of liquidation estate which is the
subject of security interest or relinquish the
same and claim as secured creditor in the
manner set out under section 53(1)(b)(ii)
ranking equal to other secured creditors.
First charge holder will have priority in
realising its security interest if it elects to
realise its security interest and does not
relinquish the same. However, if it opts to
relinquish its security interest, the
distribution of assets would be governed by
the section 53(1)(b)(ii) whereunder all
secured creditors having relinquished
security interest rank equally.
554. Since the CD in liquidation is not a going Sri Supriyo Kumar Chaudhuri, NCLT, 26.07.2021
concern and assets which are to be Liquidator of JVL Agro Allahabad
distributed are in the form of liquid assets Industries Ltd. Vs. State Bank of
and are non-saleable, the Code does not India, Sarg & Ors. [IA No.
bar such distribution as such distribution 19/2021, IVN. P. 02/ALD/2020
will not hamper the liquidation process of In CP No. (IB) 223/ALD/2019]
the CD.
555. The pension fund, gratuity fund and Sabu K.V & Anr. Vs. Shri. NCLT, Kochi 18.11.2021
provident fund can’t be utilised, attached Ravindra Chaturvedi,
or distributed by the liquidator, to satisfy Liquidator of Excel Glasses Ltd.
the claims. [MA/221 & 222/KOB/2020]

All sums due to any workman or employees

from such funds, do not form part of the
liquidation estate/liquidation assets of the
CD.
556. If it is found that in fact the IRP/RP Sunil Kumar Jain and Ors. Vs. SC 19.04.2022
managed the operations of the CD as a Sundaresh Bhatt and Ors. [Civil
going concern during the CIRP and the Appeal No. 5910 of 2019]
concerned workmen/employees actually
worked during the CIRP, their wages and
salaries be considered and included in CIRP
costs and during liquidation, they will have
to be paid as per section 53(1)(a) of the
Code in full.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
557. During liquidation, the question of Genius Security and Allied NCLAT 07.04.2022
discrimination arises only when some of Services Vs. Shivadutt Bannanje
the OCs are paid the dues by excluding & Anr. [CA (AT) (CH) (Ins.) No.
some of the OCs. 110 & 225 of 2021]
558. Section 48 of the Gujarat Value Added Tax, State Tax Officer Vs. Rainbow SC 06.09.2022
2003 is not contrary to or inconsistent with Papers Ltd. [Civil Appeal No.
section 53 or any other provisions of the 1661 of 2020 with Civil Appeal
Code. Under section 53(1)(b)(ii) of the No. 2568 of 2020]
Code, the debts owed to a secured creditor,
which would include the state under the
Gujarat Value Added Tax, 2003, are to rank
equally with other specified debts including
debts on account of workman’s dues for a
period of 24 months preceding the
liquidation commencement date.
54. Dissolution of corporate debtor

559. By conjoint reading of section 54, section In the matter of SGP Software NCLT, 01.02.2021
60 and regulation 45 of Liquidation Process Solutions Pvt. Ltd. [I.A. No. Bengaluru
Regulations, the ultimate objective of the 14/2021 and C.P. (IB) No.
Code is either to resolve the issue by way of 137/BB/2018]
resolution plan or to dissolve the corporate
debtor, as expeditiously as possible.

54C Application to initiate pre-packaged insolvency resolution process

560. While considering the application of pre- In the matter of Krrish Realtech NCLAT 21.12.2021
packaged insolvency under section 54C of Pvt. Ltd. [CA (AT) (Ins.) Nos.
the Code, AA can hear 1008, 1009 & 1010 of 2021]
objectors/interveners before the
admission of such application.
55 Fast track corporate insolvency resolution process
561. The CD does not come within the category Sanjay Kumar Ruia Vs. Catholic NCLAT 03.01.2019
of CD in terms of clauses (a) or (b) or (c) of Syrian Bank Ltd. & Anr. [CA (AT)
sub-section (2) of section 55 as its assets (Ins.) No. 560 of 2018]
and income being not below a level,
notified by the Central Government nor
having class of creditors or amount of debt
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
as notified by the Central Government.
Therefore, section 55 cannot be invoked
against the CD.
59 Voluntary liquidation of corporate persons
562. Voluntary liquidation can only be done, as Central Inland Water Transport NCLT, 28.09.2018
required under regulation 38 of the Corporation Ltd. [C.A. (IB) No. Kolkata
Insolvency and Bankruptcy Board of India 791/KB/2018]
(Voluntary Liquidation Process)
Regulations, 2017, if the debt of the CD has
been discharged to the satisfaction of the
creditors and no litigation is pending
against CD. Since the CD did not satisfy the
twin requirements in the matter, the
voluntary liquidation of the CD was
suspended.
60 Adjudicating Authority for corporate persons
563. With regard to the issue as to whether AA Finquest Financial Solutions NCLT, 10.05.2019
has jurisdiction to determine the issue of Pvt. Ltd. Vs. Ravi Shankar Mumbai
disputed question of fact as to who holds Devarakonda [M.A 1392/2019
the first charge, it was held that it is the in CP No.
exclusive prerogative of AA which is 382/IB/MB/MAH/2018]
exclusively vested with the power to
adjudicate the matters relating to and
connected with insolvency and bankruptcy
law particularly the process of liquidation
and the related measures to be adopted in
the said process of liquidation. It was
observed that it is not just a substantive law
but also a procedural law and therefore,
the AA can decide on the issues of disputed
question of fact when the documents
unequivocally prove the point that is
sought to be decided.
564. A plain reading of section 60(2) with State Bank of India Vs. Anil NCLT, 20.08.2020
sections 95 and 97(3) of the Code indicates Dhirajlal Ambani [IA No. 1009 Mumbai
that, even while an application for CIRP or of 2020 in CP (IB) 916 ((MB) of
liquidation is pending against CD, an 2020 and Anr.]
application against the personal guarantor
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
can be allowed to be filed. The law does not
envisage that the insolvency resolution of
the personal guarantor should follow only
when the process of CIRP of the CD has
come to an end.
565. Clause (c) sub-section (5) of section 60 of GE Power India Ltd. Vs. NHPC HC, New 26.06.2020
the Code vests the jurisdiction in AA to Ltd. [CS (COMM) 140/2020 & Delhi
entertain and dispose of any question of I.A. 4016/2020]
priorities or any question of law or fact,
arising out of or in relation to the
insolvency resolution for liquidation
proceedings. Therefore, the jurisdiction
vested in AA while dealing with a resolution
plan is of wide ambit and any question of
law or fact in relation to the insolvency
resolution has to be determined by the AA.
566. The AA has no jurisdiction to enforce a Stanbic Bank Ghana Ltd. Vs. NCLT, 27.04.2018
foreign decree, however, there is no bar in Rajkumar Impex Pvt. Ltd. Chennai
taking cognizance of a foreign decree. [CP/670/IB/2017]
567. Though the AA and the NCLAT have Embassy Property SC 03.12.2019
jurisdiction to enquire into questions of Development Pvt. Ltd. Vs. State
fraud, however, they would not have of Karnataka & Ors. [Civil
jurisdiction to adjudicate upon disputes Appeal No. 9170, 9172 of 2019]
such as those arising under the Mines &
Minerals (Development and Regulation)
Act, 1957, and the rules thereunder,
especially when the disputes revolve
around decisions of statutory or quasi-
judicial authorities, which can be corrected
only by way of judicial review of
administrative action.
568. If the AA is satisfied that there are M. Srinivas Vs. Ramanathan NCLAT 24.07.2019
circumstances suggesting that the business Bhuvaneshwari & Ors. [CA (AT)
of a CD is being conducted with intent to (Ins.) No. 498 of 2019]
defraud its creditors, members or any other
person or otherwise for a fraudulent or
unlawful purpose or in a manner
oppressive to any of its members, and that
the affairs of the CD ought to be
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
investigated, after giving a reasonable
opportunity of being heard to the parties
concerned, it may refer the matter to the
Central Government for investigation into
the affairs of the CD.
569. Once a disciplinary proceeding is initiated IBBI Vs. Rishi Prakash Vats & NCLAT 11.07.2019
by IBBI on the basis of evidence on record, Ors. [CA (AT) (Ins.) No. 324 of
it is for the disciplinary authority i.e. IBBI to 2019]
close the proceedings or pass appropriate
orders in accordance with law. Such power
having been vested with IBBI and in
absence of such power being vested with
AA, the AA cannot quash the disciplinary
proceedings initiated by IBBI.
570. Section 212 of the Companies Act, 2013 Union of India Vs. Maharashtra NCLAT 02.12.2019
does not empower the NCLT or AA to refer Tourism Development
the matter to the Central Government for Corporation & Anr. [CA (AT)
investigation by Serious Fraud Investigation (Ins.) No. 964 and 965 of 2019]
Office (SFIO) even if it notices the company
defrauding creditors and others. However,
in terms of section 213(b) of the said Act, it
can direct the Central Government to
investigate through inspectors and after
investigation and if case is made out, it may
decide the matter to be investigated by
SFIO. It was held that the AA is not
competent to straight away direct any
investigation to be conducted by the SFIO.
571. The Code does not confer any power and Committee of Creditors of NCLAT 07.02.2020
jurisdiction on the AA to compel specific Metalyst Forging Ltd. Vs.
performance of a resolution plan by an Deccan Value Investors LP &
unwilling resolution applicant. Ors. [CA (AT) (Ins.) No. 1276
and 1281 of 2019]
572. Section 60 of the Code in sub-section (1) State Bank of India Vs. V. SC 14.08.2018
thereof, refers to insolvency resolution and Ramakrishnan & Anr. [CA No.
liquidation for both CDs and personal 3595 of 2018]
guarantors, the AA for which shall be the
NCLT having territorial jurisdiction over the
place where the registered office of the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
corporate person is located. The scheme of
section 60(2) and (3) is clear that the
moment there is a proceeding against the
CD pending under the Code, any
bankruptcy proceeding against the
individual personal guarantor will, if
already initiated before the proceeding
against the CD, be transferred to the NCLT
or, if initiated after such proceedings had
been commenced against the CD, be filed
only in the NCLT.
573. An order of moratorium will be applicable State Bank of India Vs. D. S. NCLAT 18.04.2018
only to the proceedings against the CD and Rajendra Kumar [CA (AT) (Ins.)
the personal guarantor, if pending before Nos. 87 to 91 of 2018]
any court of law/tribunal or authority.
However, this order of moratorium will not
be applicable on filing of applications for
triggering CIRP under sections 7 or 9 or 10
of the Code against the guarantor or the
personal guarantor under section 60(2).
574. The limited judicial review available to AA Committee of Creditors of Essar SC 15.11.2019
can in no circumstance trespass upon a Steel India Ltd. Vs. Satish
business decision of the majority of the CoC Kumar Gupta & Ors. [CI Civill
. The residual jurisdiction of the AA under Appeal No. 8766-67 of 2019
section 60(5)(c) cannot, in any manner, with other Civil Appeals and
whittle down section 31(1) of the Code, by WP(C)s]
the investment of some discretionary or
equity jurisdiction in the AA outside
section 30(2) of the Code, while
adjudicating a resolution plan.
575. Without initiating any CIRP against the Ferro Alloys Corporation Ltd. NCLAT 08.01.2019
principal borrower, it is always open to the Vs. Rural Electrification
FC to initiate CIRP under section 7 against Corporation Ltd. [CA (AT) (Ins.)
the corporate guarantors, as the creditor is No. 92, 93 & 148 of 2017]
also the FC qua corporate guarantor.
576. It was noted that the AA under the Code UT Worldwide (India) Pvt Ltd. NCLT, 17.10.2017
exercises only a summary jurisdiction and Vs. Integrated Caps Pvt. Ltd. New Delhi
cannot be made to conduct the [IB-298/ND/2017]
proceedings by way of a detailed trial to
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
ascertain the amount of debt claimed is as
claimed or not, as is done by a Civil Court
taking a detailed examination of
documents supported by oral examination
of witnesses when the plaintiff approaches
it by way of a suit.
577. The non-obstante clause in section 60(5) is Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
designed for a different purpose i.e. to Satish Kumar Gupta and Ors.
ensure that the NCLT alone has jurisdiction [Civil Appeal Nos. 9402 to 9405
when it comes to applications and of 2018]
proceedings by or against a CD covered by
the Code, making it clear that no other
forum has jurisdiction to entertain or
dispose of such applications or
proceedings.
578. Section 60(5) of the Code does not provide P. Purushothaman Vs. Union NCLT, 04.06.2019
for review jurisdiction to the NCLT. Bank of India & Anr. Chennai
[MA/496/2019 in
CP/280/IB/2018]
579. The prayer to recall and cancel NCLTs own Vistar Financiers Pvt. Ltd. Vs. NCLT, 22.06.2018
order of admission of CIRP would not come Datre Corporation Ltd. [CA No. Kolkata
within the purview of section 60 of the 209 of 2018 in CP (IB) No.
Code. Moreover, the order of admission of 441/KB/2017]
CIRP is an appealable order under section
32 of the Code.
580. The AA is empowered to direct the ex- Amandeep Singh Bhatia & Ors. NCLAT 30.08.2018
directors not to leave the country without Vs. Vitol S.A. & Anr. [CA (AT)
its prior permission. (Ins.) No. 502 of 2018]

581. There is no bar in the Code against filing of Vishnu Kumar Agarwal Vs. NCLAT 08.01.2019
two applications under section 7 Piramal Enterprises Ltd. [CA
simultaneously, against the principal (AT) (Ins.) 346 & 347 of 2018]
borrower as well as the corporate
guarantor or against both the guarantors.
However, once for same set of claim,
application under section 7 filed by the FC
is admitted against one of the CDs (i.e.
principal borrower or corporate
guarantor), second application by the same
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
FC for same set of claim and default cannot
be admitted against the other CD (i.e.
corporate guarantor or the principal
borrower).
582. The AA has no jurisdiction to pass any order Prasad Gempex Vs. Star Agro NCLAT 02.05.2019
with regard to any matter pending before Marine Exports Pvt. Ltd. &Anr.
the court of criminal jurisdiction. [CA (AT) (Ins.) 469 of 2019]
583. NCLT is not a court subordinate to the HC Jotun India Pvt. Ltd. Vs. PSL Ltd. HC, 05.01.2018
and hence as prohibited by the provisions [CP Nos. 434, 1048, 878 of 2015 Bombay
of section 41(b) of the Specific Relief Act, & 256 and 392 of 2016]
1963, no injunction can be granted by the
HC against a CD from institution of
proceedings in NCLT.
584. The question as to whether the NCLT has Skillstech Services Pvt. Ltd. Vs. HC, New 13.01.2021
jurisdiction to entertain a particular case or Registrar, National Company Delhi
not cannot be determined by the Registrar, Law Tribunal, New Delhi & Anr.
NCLT in its administrative capacity. The [W.P.(C) 474/2021 & CM Appl.
Registrar, NCLT is bound to place the 1227/2021]
matter before the appropriate bench of the
NCLT, for the said question to be judicially
determined.
585. The recovery of rent from the tenant and Liquidator of Precision NCLT, 27.10.2020
the eviction of tenant from the property of Fasteners Ltd. Vs. Siddhi Edibles Mumbai
the CD is in exclusive domain of the civil Pvt. Ltd. [M.A. No. 1512/2018
courts and cannot be dealt by the AA by and M.A. No. 47/2019 in CP (IB)
invoking section 60(5) and the jurisdiction No. 1339/NCLT/MB/2017]
lies with the Civil Court/Rent Control Court
only. On the guise that the Code is
complete in itself, the AA can neither
enlarge nor amplify its jurisdiction.
586. NCLT being creature of the Code, cannot IBBI Vs. State Bank of India & HC 28.11.2022
assume itself the power of declaring Ors. [W.P. ( c) 10189/2018 &
provisions of the Code or the regulations CM Appl. 39715/2018]
framed thereunder as illegal or ultra
vires.

587. When the application for approval of Kalinga Allied Industries India NCLAT 11.01.2021
resolution plan is pending before the AA, at Pvt. Ltd. Vs. Hindustan Coilsd. &
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
that time the AA cannot entertain an Ors. [CA (AT) (Ins.) No. 518 of
application of a person who has not 2020]
participated in CIRP even when such person
is ready to pay more amount in comparison
to the successful resolution applicant. If a
resolution plan is considered beyond the
time limit then it will make a never ending
process.
588. i. under section 60(5)(c) , AA has Gujarat Urja Vikas Nigam Ltd. SC 08.03.2021
jurisdiction to adjudicate disputes, which Vs. Amit Gupta & Ors. [Civil
arise solely from or which relate to the Appeal No. 9241 of 2019]
insolvency of the CD; however, in doing so,
the AA and NCLAT must ensure that they do
not usurp the legitimate jurisdiction of
other courts and tribunals.

ii. AA cannot do what the Code consciously

did not provide it the power to do.

v. The jurisdiction of the NCLT cannot be

invoked in matters where a termination
may take place on grounds unrelated to the
insolvency of the CD.

vi. It cannot even be invoked in the event of

a legitimate termination of a contract
based on an ipso facto clause, if such
termination will not have the effect of
making certain the death of the CD.

vii. AA to be cautious in setting aside valid

contractual terminations which would
merely dilute the value of the CD, and not
push it to its corporate death.
589. AA is sufficiently empowered under section Alok Kaushik Vs. SC 15.03.2021
60(5)(c) of the Code to make a Bhuvaneshwari Ramanathan
determination of the amount which is and Ors. [Civil Appeal No. 4065
payable to an expert valuer as an intrinsic of 2020]
part of the CIRP costs, even in a situation
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
where the CIRP is eventually set aside by
the AA or by the Appellate Authority.
590. If the facts and circumstances of a case Mandar Wagh, IRP of Synew NCLT, 16.11.2020
justify that no purpose would be served to Steel Pvt. Ltd. [C.P. (IB)No. Bengaluru
keep the CD under regular CIRP 96/BB/2020 and I.A. No.
proceedings, and thereafter under 435/2020]
liquidation proceedings, under the
provisions of the Code, the AA, by
exercising its inherent powers conferred
under the Act, may pass appropriate
order(s) in the interest of speedy justice.
591. Both NCLT and NCLAT work3. Ranjeet Singh vs. M/s Karan NCLAT 13.08.2021
under the Code where there is no equity Motors Private Limited [CA (AT)
jurisdiction, and they are bound by the (Ins.) No. 719/2020]
provisions of the Code while adjudicating
the matters under the Code.

592. The residuary jurisdiction of the NCLT 4. Tata Consultancy Services Ltd. SC 23.11.2021
under section 60(5)(c) cannot be invoked if Vs. Vishal Ghisulal Jain, RP, SK
the termination of a contract is based on Wheels Pvt. Ltd. [Civil Appeal
grounds unrelated to the insolvency of the No. 3045 of 2020]
CD.
593. Section 60(2) does not in any way prohibit
5. State Bank of India Vs. NCLAT 27.01.2022
filing of proceedings under section 95 of Mahendra Kumar Jajodia,
the Code even if no proceeding is pending Personal Guarantor to
before NCLT. Corporate Debtor [CA (AT)
(Ins.) No. 60 & 61 of 2022]
594. Filing of application under section 60(5) of
6. Kiran Shah, RP of KSL and NCLAT 03.01.2022
the Code is not an ‘all pervasive’ one, Industries Ltd. Vs. Enforcement
thereby conferring jurisdiction to an AA to Directorate [CA (AT) (Ins.) No.
determine ‘any question/issue of 817/2021]
priorities’, question of law or facts
pertaining to the CD when in reality in
‘Law’, the AA is not empowered to deal
with the matters falling under the purview
of another authority under PMLA.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
595. AA while exercising jurisdiction under the 7. Vikram Puri (Suspended NCLAT 28.02.2022
Code is empowered to issue non-bailable Directors) & Anr. Vs. Universal
warrant against any person or party for Buildwell Pvt. Ltd. & Anr. [CA
enforcing the attendance of a person. In (AT) (Ins.) No. 1018 of 2021]
addition to enforcement of non-bailable
warrants, it shall be also open for the AA to
recommend for initiation of prosecution
against the suspended directors of the CD
in event of commission of an offence under
the Code.
596. Section 60(6) of the Code does 8. New Delhi Municipal Council SC 27.04.2022
contemplate exclusion of the entire period Vs. Minosha India Ltd. [Civil
during which the moratorium was in force Appeal No. 3470 of 2022]
in respect of CD in regard to a proceeding
as contemplated therein at the hands of
the CD.
597. The ‘personal guarantors’ as used under 9. Sudip Bijoy Dutta Vs. State NCLAT 29.07.2022
section 60(1) are personal guarantors Bank of India [CA (AT) (Ins.) No.
irrespective of the fact as to whether they 807 of 2021]
are Indian citizen or foreign nationals.

The statutory scheme of the Code does not

contain any indication that the personal
guarantor of a CD can escape from its
liability under the personal guarantee deed
merely on the ground that he is now
started residing in another country and
acquired citizenship of another country and
is no more an Indian citizen.
598. An element of public interest is involved 10.
in P. Eswaramoorthy of Senthil NCLAT 13.03.2023
the Benami Transactions (Prohibition) Act, Papers and Boards Pvt. Ltd. Vs.
1988 (Benami Act) and issues/disputes The Deputy Commissioner of
pertaining to an attachment effected under Income Tax (Benami
the said Benami Act, cannot be adjudicated Prohibition) and Ors. [CA (AT)
by AA under the Code. The Benami Act and (CH) (Ins.) No. 188 of 2022]
the Code, operate in their own fields.
599. The residuary jurisdiction of AA under 11. Sundaresh Bhat Vs. Mangalore NCLT, 09.03.2023
section 60(5)(c) is limited and cannot be Refinery and Petrochemicals Ahmedaba
Ltd. [CP(IB) No. 232 of 2018] d
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
invoked to interpret terms of a third-party
contract.
600. The object of section 60(2) is to group 12. Alliance Broadband Services HC, 03.01.2023
together, (a) CIRP or liquidation Pvt. Ltd. Vs. Manthan Calcutta
proceedings of a CD, and (b) insolvency Broadband Services Pvt. Ltd. [IA
resolution/ liquidation/ bankruptcy No. GA/3/2022 in CS/54/2019].
proceedings of the corporate guarantor or
personal guarantor of the same CD before
a single forum. This is to ensure that the
CIRP of the CD and the insolvency
resolution of the individual guarantors of
the very same CD do not proceed on
different tracks, before different forum,
leading to conflict of interest, situations, or
decisions.
61 Appeals and Appellate Authority
601. As per sub-section (3) of section 61 of the Custodial Services (India) Pvt. NCLAT 16.11.2017
Code, an appeal is required to be filed Ltd. Vs. Metafilms (India) Ltd.
within 30 days and the NCLAT has been [CA (AT) (Ins.) No. 183 of 2017]
empowered to condone delay not
exceeding 15 days, if satisfied on the
ground mentioned in the petition for
condonation of delay. It was held that
NCLAT has no jurisdiction to condone the
delay beyond 45 days.
602. An unsuccessful resolution applicant has no Hindustan Oil Exploration NCLAT 17.11.2020
locus to question any action of any of the Company Vs. Erstwhile
stakeholders qua implementation of the Committee of Creditors JEKPL
approved resolution plan nor can it claim Pvt. Ltd. & Ors. [CA (AT) (Ins.)
any prejudice on the pretext that any of the No. 969 of 2020]
actions post approval of the resolution plan
of successful resolution applicant in regard
to its implementation has affected its
prospects of being a successful resolution
applicant.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
603. There is a need to introduce provisions in Surinder Kaur & Ors. Vs. NCLAT 18.03.2021
the legal framework to vest power of International Recreation and
superintendence and control qua NCLTs in Amusement Ltd. through RP
the NCLAT. [CA (AT) (Ins.) No. 208 of 2021]
604. The NCLAT does not have an inherent Adish Jain Vs. Sumit Bansal & NCLAT 03.02.2021
power to review its own orders and that the Anr. [Review Application No. 13
‘power of review’ has to be granted by of 2020 in CA (AT) (Ins.) No. 379
statute and it is not an inherent power, and of 2020]
therefore cannot be exercised unless
conferred specifically or by necessary
implications.
605. The NCLAT dropped the contempt Committee of Creditors of Leel NCLAT 29.01.2021
proceedings admitted against the IRP, on Electricals Ltd. Vs. Arvind
an application filed by CoC as the latter was Mittal, IRP of Leel Electricals
in the process of approaching IBBI for Ltd. [Contempt Case (AT) No. 01
taking action against the IRP. of 2021 in CA (AT) (Ins.) No.
1100 of 2020]
606. Considering section 61(2) which provide National Spot Exchange Ltd. Vs. SC 14.09.2021
that delay beyond 15 days in preferring the Mr. Anil Kohli, RP for Dunar
appeal is uncondonable, the same cannot Foods Ltd. [Civil Appeal No.
be condoned even in exercise of powers 6187 of 2019]
under Article 142 of the Constitution.
607. A writ petition under Article 226 of the Ideal Surgical Vs. National HC 02.07.2021
Constitution against an order of NCLT Company Law Tribunal and Ors.
under the Code, is not maintainable. [WP(C) No 8257 of 2021]

608. The Petitioner / Appellant being an M.K. Rajagopalan Vs. S. NCLAT 17.03.2023
unsuccessful RA has no locus to assail an Rajendran, RP Vasan Health
approved resolution plan or its Care Pvt. Ltd. IA No. 215 of 2023
implementation, coupled with a candid fact in [CA (AT) (CH) (Ins.) No. 58 of
that he is not a stakeholder, as per section 2023]
31(1) in relation to the CD.
609. There is no scope for condonation of delay Diwakar Sharma Vs. Anand NCLAT 28.03.2023
beyond the period of 15 days much less 45 Sonbhadra RP of Subhkamna
days, as there is no window available for Buildtech Pvt. Ltd. and Anr. [CA
NCLAT to exercise its jurisdiction for (AT) (Ins.) No. 1446 of 2022 &
condonation of delay. I.A. No. 4551 of 2022]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
62 Appeal to Supreme Court
610. Section 62 of the Code provides a period of Gammon India Ltd. Vs. SC 20.11.2020
45 days from the date of the receipt of an Neelkanth Mansions and
order of the NCLAT for filing an appeal. It Infrastructure Pvt. Ltd. [Civil
empowers the SC to condone a delay of a Appeal No. D No 13202 of 2019]
further period up to 15 days for sufficient
cause. Since the delay of 51 days is beyond
the period of delay which can be condoned,
the SC dismissed the appeal on the ground
that it is barred by limitation.
611. The SC declined to entertain a writ petition Upendra Choudhury Vs. SC 11.02.2021
under Article 32 of the Constitution filed by Bulandshahar Development
a singular homebuyer, stating that it would Authority & Ors. [Writ Petition
be inappropriate to do so as there are (Civil) No. 150 of 2021]
specific statutory provisions holding the
field, including the Consumer Protection
Act 1986 and its successor legislation; the
Real Estate (Regulation and Development)
Act 2016; and the Code.

Remedy under Article 32 cannot be used as

a ruse to flood the SC with petitions that
must be filed before the competent
authorities set up pursuant to the
appropriate statutory framework.
63 Civil Court not to have jurisdiction
612. Sections 63 and 231 of the Code create a GE Power India Ltd. Vs. NHPC HC, New 26.06.2020
bar on the jurisdiction of the Civil Court in Ltd. [CS (COMM) 140/2020 & Delhi
respect of any matter in which the AA and I.A. 4016/2020]
NCLAT has jurisdiction under the Code and
the AA under the Code is competent to pass
any order.
613. If the questions raised in the suits arise out Liberty House Group PTE Ltd. HC, New 22.02.2019
of or in relation to insolvency resolution, Vs. State Bank of India & Ors. Delhi
the NCLT will have jurisdiction to entertain [CS (COMM) 1246 /2018 and
the same. The jurisdiction of the HC will IAs No. 16056/2018 and
also be barred by section 231 of the Code. 16060/2018 and CS (COMM)
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
1247/2018 and IAs No.
16061/2018 and 16065/2018]
64 Expeditious disposal of applications
614. Section 64 makes it clear that Arcelormittal India Pvt. Ltd. Vs. SC 04.10.2018
the timelines are to be adhered to Satish Kumar Gupta and Ors.
by the AA and NCLAT as they [Civil Appeal Nos. 9402 to 9405
are of great importance, and of 2018]
reasons must be recorded by either the AA
or NCLAT, if the matter is not disposed of
within the time limit specified.
615. The strict adherence of the timelines is of Mobilox Innovations Pvt. Ltd. SC 21.09.2017
essence to both the triggering process and Vs. Kirusa Software Pvt. Ltd.
the insolvency resolution process. [Civil Appeal No. 9405 of 2017]

65 Fraudulent or malicious initiation of proceedings

616. Though section 65 provides for penal action Monotrone Leasing Pvt. Ltd. Vs. NCLAT 16.07.2020
against initiating CIRP with a fraudulent or PM Cold Storage Pvt. Ltd. [CA
malicious intent, the same cannot be (AT) (Ins.) No. 99 of 2020]
construed to mean that if an application is
filed under section 7, 9 or 10 of the Code
without any malicious or fraudulent intent,
then also such a petition can be rejected by
the AA on the ground that the intent of the
applicant was not resolution.
617. There is nothing on record to suggest that Unigreen Global Pvt. Ltd. Vs NCLAT 01.12.2017
the corporate applicant has suppressed any Punjab National Bank and Ors.
fact or has not come with the clean hands. [CA (AT) (Ins.) No. 81 of 2017]
The AA has also not held that the
application has been filed by the corporate
applicant ‘fraudulently’ or ‘with malicious
intent’ for any purpose other than for the
resolution process or liquidation or that the
voluntary liquidation proceedings have
been initiated with the intent to defraud
any person. In absence of any such reasons
recorded by the AA, the impugned order of
AA was not be upheld.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
Further, as the AA before imposing penalty
under section 65 has not given nor served
any notice to the corporate applicant
recording its prima facie view and intent to
punish the corporate applicant, therefore,
the impugned order of AA cannot be
upheld as being passed in violation of rules
of natural justice.
618. i. In case an allottee does not want to go Amit Katyal Vs. Meera Ahuja & NCLAT 09.11.2020
ahead with its obligation to take possession Ors. [CA (AT) (Ins.) No. 1380 of
of the flat, but wants to get back the 2019]
monies already paid, by way of coercive
measure, the use of section 65 is justified,
as one allottee is misusing his position to
stall the entire project. But it does not
mean that an application satisfying the
requirements of section 7 or 9 could be
dismissed arbitrarily under the guise of
section 65.

ii. The Code provides stringent action under

section 65 against the person who initiates
proceeding fraudulently or with malicious
intent, for the purpose other than the
resolution of insolvency or liquidation.

619. Against the rejection of a claim of RP, there Rajat Metaal Polychem Pvt. Ltd. NCLAT 02.12.2021
is no provision to file an appeal. However, Vs. Resolution Professional [CA
the claimant is entitled to make grievances (AT) (Ins.) No. 979 of 2021]
regarding any claim made against the CD by
virtue of section 60(5)(b) of the Code.

620. The CIRP was initiated fraudulently and Bank of India Vs. Iris Electro NCLT, 14.02.2022
with malicious intent, for a purpose other Optics Pvt. Ltd. & Ors. [C.P (IB) Hyderabad
than the resolution of the insolvency of the No. 181/7/HDB/2019]
CD. Accordingly, the AA imposed the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
maximum penalty under section 65 of the
Code.

621. The date of initiation of CIRP is the date on Ashmeet Singh Bhatia. Vs. NCLAT 13.03.2023
which the FC, OC or Corporate Applicant Sundrm Consultants Pvt. Ltd.
makes an application with the AA for the and Anr. [CA (AT) (Ins.) No. 557
initiation of the process and the ICD is the of 2021]
date of the admission of the application. It
is hereby held that in case where
application is filed under section 65, it
would be maintainable after the
application is filed either under section 7, 9
or 10.

66 Fraudulent trading or wrongful trading

622. The AA had allowed the application under Axis Bank Ltd. Vs. Anuj Jain [CA NCLAT 01.08.2019
sections 66, 43 and 45 of the Code and (AT) (Ins.) No. 243 of 2018 and
ordered that the mortgaged properties be Ors.]
vested with the CD.

On appeal, the NCLAT noted that the

mortgages were made in favour of the
banks and financial institutions by the CD in
the ordinary course of business. Further, in
absence of any contrary evidence to show
that they were made to defraud the
creditors of the CD or for any fraudulent
purpose, it set aside the order of the AA.
623. Proceeding on fraudulent transactions Mr. Nitin Bharal & Ors. Vs. NCLAT 04.05.2022
under section 66 of the Code can be Stockflow Express Pvt. Ltd. [CA
initiated even in the absence of any (AT) (Ins.) No. 454 of 2022]
transaction audit. If the IRP/RP has prima
facie suspicion of any fraudulent
transactions, he can have a recourse to
approach the AA for necessary action.
624. The moratorium under section 14 is no bar Rakesh Kumar Jain RP HBN NCLAT 04.08.2022
for initiation of proceedings and passing of Homes Colonizers Pvt. Ltd. Vs.
Order under section 66 of the Code. Jagdish Singh Nain & Ors. RP of
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
HBN Foods Ltd. [CA (AT) (Ins.)
No. 425 of 2022]
625. Section 66 empowers the AA to give Shibu Job Cheeran and Ors. Vs NCLAT 01.03.2023
directions for making contribution to the Ashok Velamur Seshadri, [CA
assets of the CD. This also includes directors (AT) (CH) (Ins.) No. 350 of
of the CD, and their personal liability 2021 and IA No.727/2021]
towards contribution, provided such
directors did not exercise due diligence or
failed to take reasonable steps to minimize
potential losses to the creditors when there
was no possibility of avoiding the
commencement of CIRP.
626. Section 66(1) contemplates an application Sudipa Nath Vs. Union of India HC, Tripura 18.01.2023
only by the RP; and the said provision and Ors. [WP (C) (PIL) 04 of
restricts the power of NCLT subject to the 2023]
satisfaction that any business of the CD has
been carried on with intent to defraud
creditors or the CD or for any fraudulent
purpose and to pass an order, is only
against such person who are responsible
for the conduct of such fraudulent business
of the CD and to make them personally
liable to make such contributions to the
assets of the CD.

70 Punishment for misconduct in course of CIRP

627. Despite directions of handing over the CD Asset Reconstruction Company NCLT, 28.03.2019
to the RP, the business head and statutory (India) Ltd. Vs. Shivam Water Mumbai
auditor did not extend any co-operation for Treaters Pvt. Ltd. [CP(IB)
handing over possession of the CD to the 1882(MB)/2018]
RP. Hence, a penalty of Rs. 10 lakh each was
imposed under section 70 of the Code.
95 Application by creditor to initiate insolvency resolution process
628. Once the application is filed as per section Ravi Ajit Kulkarni Vs. State Bank NCLAT 12.08.2021
95 and 96 of the Code, the AA has to act on of India [CA (AT) (Ins.) No. 316
it, and following principles of natural and 317 of 2021]
justice, give limited notice to the personal
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
guarantor to appear referring to the
interim moratorium that has commenced
as per terms of section 96.

Then the next stage is of appointing RP as

per section 97. Third stage will be RP acting
in terms of section 99 and submitting a
report. At the fourth stage comes in
adjudication of the application under
section 100 which ought to be decided by
giving hearing to parties keeping in view
the application, evidence collected and
report under section 99 of the Code.
629. An application for insolvency for resolution Insta Capital Pvt. Ltd. Vs. Ketan NCLT, 10.08.2021
against the personal guarantor is not Vinod Kumar Shah [CP (IB) Mumbai
maintainable unless that CIRP/liquidation is 1365/MB-IV/2020]
ongoing against the CD. Filing of
applications seeking resolution of personal
guarantors without the CD undergoing
CIRP, would tantamount to vesting of
jurisdiction on two course i.e. one being
NCLT, and another being the DRT.
630. CIRP can be initiated against the personal Shapoorji Pallonji Finance Pvt. NCLT, 22.02.2022
guarantors of a NBFC/‘financial service Ltd. Vs. Rekha Singh [IA Jaipur
provider' irrespective of CIRP against the No.229/JPR/2021 in CP No. (IB) Bench
NBFC, provided that the concerned NBFC 25/95/JPR/2021]
falls within the category of those ‘financial
service provider’ having asset size of Rs.
500 crores or more (i.e. as per MCA
Notification dated 18.11.2019).
631. There is no provision in the Code which Bank of Baroda Vs. Divya Jalan NCLT, 11.02.2022
envisages that the legal heirs steps into the [CP(IB)No.363/KB/2021] Kolkata
shoes of the deceased personal guarantor.
Steps can be taken to recover the
guaranteed amount from the
assets/estates of the deceased personal
guarantor rather than the personal assets
of the legal heirs of the personal guarantor.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
The definition of ‘personal guarantor’ talks
about estate/assets of the personal
guarantor only.
632. As per sections 95(1), 99 and 100 of the Sri. Babu A. Dhammanagi & HC 05.04.2022
Code, the role of RP is limited to make Anr. Vs. Union of India & Ors.
appropriate recommendation to the AA [W.P. No. 21626 of 2021]
and the final decision of the admission or
rejection of the application under section
95, solely lies with AA.
96 Interim - moratorium
633. To stay wilful defaulter proceedings, Adarsh Jhunjhunjwala Vs. State HC 24.12.2021
criminal proceeding or quasi criminal Bank of India & Anr. [WPO 1548
proceeding under any moratorium under of 2021]
section 96 would defeat the object and
purpose of the Part III of the Code. The
principles applied in corporate insolvency
cannot be applied to personal insolvency.
Recovery proceedings or proceedings
under section 96 of the Codewould not
absolve the borrower who has been found
to be wilful defaulter.
634. Interim moratorium applies "in respect of any Kirankumar Moolchand jain Vs. HC 18.10.2022
debt” and not for “recovery of debt”. Arbitral TransUnion CIBIL Ltd. &Ors. [ Arb.
tribunal cannot be constituted while interim O.P. (Com. Div) No. 86 of 2022]
moratorium is in existence.
635. Interim moratorium would apply in respect of Axis Trustee Services Ltd. Vs. Brij HC 04.11.2022
the guarantor only and not in respect of any Bhushan Singhal & Anr. [ CS
co-guarantors. (Comm) 8/2021 and other
applications]
636. Interim moratorium shall be for such Ashok Mahindru & Anr. Vs. vivek NCLAT 29.11.2022
proceedings which relate to a liability or Parti [CA (AT) (Ins.) No. 1324 of
obligation due i.e. due on date when interim 2022]
moratorium has been declared. Section 96
(1)(b) cannot be read to mean that any future
liability or obligation is contemplated to be
stayed.
97 Appointment of resolution professional
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
637. The scheme of insolvency resolution Siemens Financial Services Pvt. NCLT 09.06.2021
process in Chapter III of the Code does not Ltd. Vs. Vinod Sehwag [(IA
warrant and provide issuance of notice at 1774/ND/2021 in CP No. (IB)
the stage of appointing RP under section 97 116(ND)2021]
of the Code for the purpose of examining
an application preferred under Section 95
and it does not amount to violation of
principles of natural justice.
638. The use of the word ‘shall’ in section 97(1) L. Ramalakshmamma Vs. State NCLAT 22.11.2021
shall be construed as directory and not Bank of India [CA (AT) (CH)
mandatory. AA can exercise its judicial (Ins.) No. 220, 221 of 2021]
discretion in appointing a RP without
confirmation from IBBI, based on the facts
and circumstances of the case.

196 Powers and functions of Board

639. IBBI cannot under section 196, directly or K. Sashidhar Vs. indian SC 05.02.2019
indirectly regulate the manner of exercise Overseas Bank & Ors. [Civil
of commercial wisdom by FCs during the Appeal No. 10673 of 2018 with
voting on resolution plan. other CAs]
220 Appointment of disciplinary committee
640. If there is any complaint against the IP, then Alchemist Asset Reconstruction NCLT, 22.09.2017
IBBI is competent to constitute a Co. Ltd. Vs. Hotel Gaudavan New Delhi
disciplinary committee and have the same Pvt. Ltd. [CP/CA. No.
investigated from an investigating (IB)23(PB)/2017)]
authority as per the provision of section
220 of the Code. If, after investigation IBBI
finds that a criminal case has been made
out against the IP, then IBBI has to file a
complaint in respect of the offences
committed by him.
641. Since the remuneration quoted by the IRP Shrikrishna Rail Engineers Pvt. NCLT, 22.11.2017
being quite exorbitant, the matter was Ltd. Vs. Madhucon Projects Ltd. Hyderabad
referred to IBBI for taking appropriate [CP(IB) SR No.
action/remedial measure against the 4322/9/HDB/2017]
proposed IRP, including disciplinary action,
if any, as deemed fit.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
642. An appeal can only be entertained against Bhavna Sanjay Ruia Vs. IBBI [CA NCLAT 08.04.2019
an order passed by the AA. However, no (AT) (Ins.) No. 341 of 2019]
appeal is maintainable against the order
passed by the IBBI including its disciplinary
committee.
643. Once a disciplinary proceeding is initiated IBBI Vs. Rishi Prakash Vats & NCLAT 11.07.2019
by IBBI on the basis of evidence on record, Ors. [CA (AT) (Ins.) No. 324 of
IBBI has to close the proceeding or pass 2019]
appropriate orders in accordance with law.
The AA cannot quash the proceeding, even
if proceeding is initiated at the instance and
recommendation made by the AA.
644. When allegations of mala Central Bank of India Vs. KSM NCLT, 27.07.2021
fides or corruption or professional Spinning Mills Limited [IA Nos. Chandigarh
misconduct or any other sort are alleged 249/2020 and ther IAs in CP (IB)
against a RP, the same are to be No. 250/Chd/Pb/2018]
adjudicated by the IBBI and basing on the
orders passed by the IBBI, appropriate
action would be taken by the AA.

645. IBBI is the only authority to look into and Bank of Baroda Vs. Varia NCLT, 19.07.2021
inquire into any allegation against the Engineering work Ltd Ahmedaba
liquidator when he acts during the [IA/4679(AHM)2021 in d
discharge of his duty as the liquidator. CP(IB)/149 (AHM)2017

227 Power of Central Government to notify financial sector providers, etc.

646. The RBI filed an application under section Vinay Kumar Mittal & Ors. Vs. SC 31.01.2020
227 and 239 of the Code read with rule 5 Dewan Housing Finance
and 6 of the Insolvency and Bankruptcy Corporation Ltd. & Ors. [Civil
(Insolvency and Liquidation Proceedings of Appeal No. 654 to 660 of 2020]
Financial Service Providers and Application
to Adjudicating Authority) Rules, 2019 for
insolvency resolution of Dewan Housing
Finance Corporation Ltd. (DHFL), which was
admitted by NCLT, Administrator was
appointed and moratorium imposed. The
HC restrained DHFL from making any
further payments to any unsecured
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
creditors and secured creditors except in
cases where payments are to be made on a
pro-rata basis to all secured creditors out of
its current and future receivables.

The fixed deposit holders aggrieved by the

orders of the HC restraining from making
any payments towards their fixed deposits,
challenged the order of the HC before SC.
The SC held that since the depositors are
being represented by the authorised
representative before the CoC, they are
free to raise all points and contentions
before the CoC, the Administrator, and if
necessary, before the AA.
231 Bar of jurisdiction
647. The jurisdiction of the HC will also be Liberty House Group PTE Ltd. HC, New 22.02.2019
barred by section 231 of the Code which Vs. State Bank of India & Ors. Delhi
provides that no Civil Court shall have [CS (COMM) 1246 /2018 and
jurisdiction in respect of any matter in IAs No. 16056/2018 and
which the AA is empowered, by or under, 16060/2018 and CS (COMM)
the Code to pass any order. 1247/2018 and IAs
No.16061/2018 and
16065/2018]
233 Protection of action taken in good faith
648. The liquidator is protected against any Bank of Baroda Vs. Varia NCLT, 19.07.2021
coercive action, provided his act during Engineering work Ltd Ahmedaba
CIRP is bona fide. [IA/4679(AHM)2021 in d
CP(IB)/149 (AHM)2017
649. Actions taken in good faith by a public Basavaraj Koujalagi & 82 Ors. NCLT, 03.05.2021
servant always enjoy protection under the Vs. Sumit Binani, Liquidator of Kolkata
law, and the Code is no different, providing Gujarat NRE Coke Ltd. [IA No.
for the same under section 233. 865/KB/2020 in CP (IB) No.
182/KB/2017]
236 Trial of offences by Special Court
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
650. Before referring any matter to IBBI or the Committee of Creditors of NCLAT 16.08.2019
Central Government, the AA is required to Amtek Auto Ltd. through
provide reasonable opportunity of hearing Corporation Bank Vs. Dinkar T.
to the parties concerned/alleged offenders Venkatasubramanian & Ors.
of provisions of Chapter VII of Part II and, if [CA (AT) (Ins.) No. 219, 442 &
satisfied, may request the Central 443 of 2019]
Government to investigate the matter by
an Inspector or Inspectors and then to
decide on such opinion whether to refer
and lodge any case before the Special Judge
for trial under section 236 of the Code for
alleged offence under section 74(3) or any
other provision under Chapter VII of Part II
of the Code and for punishment under
section 447 of the Companies Act, 2013.
651. There is complete bar of trial of offences in Alchemist Asset Reconstruction NCLT, 22.09.2017
the absence of filing of a complaint by IBBI Co. Ltd. Vs. Hotel Gaudavan New Delhi
as is evident from a perusal of sub-sections Pvt. Ltd. [CP/CA. No.
(1) and (2) of section 236 the Code. (IB)23(PB)/ 2017)]
Therefore, a complaint by a former director
with the police would not be maintainable
and competent as the complaint is not
lodged by IBBI.
238 Provisions of this Code to override other laws
652. An acknowledgement of debt interrupts Yogeshkumar Jashwantlal NCLAT 14.09.2020
the running of prescription and that it does Thakkar Vs. Indian Overseas
not create a new right but only extends the Bank and Anr. [CA (AT) (Ins.)
period of limitation. No. 236 of 2020]
653. The accounting conventions cannot Vijay Kumar V Iyer Vs. Bharti NCLAT 13.07.2020
supersede any express provisions laid down Airtel Ltd. and Ors. [CA (AT)
in the Specific law on the subject. (Ins.) No. 530 & 700 of 2019]
654. When it comes to any clash between the Rajendra K. Bhutta Vs. SC 19.02.2020
Maharashtra Housing and Area Maharashtra Housing and Area
Development Act, 1976 and the Code, on Development Authority and
the plain terms of section 238, the Code Anr. [Civil Appeal No. 12248 of
must prevail. 2018]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
655. Section 238 of the Code prevails over Ajay Kumar Bishnoi Vs. Tap HC, Madras 09.01.2020
section 421 of the Code of Criminal Engineering [Crl OP(MD) No.
Procedure, 1973. 34996 and Ors. of 2019]
656. The Code will override the provisions of Maharashtra State Electricity NCLAT 03.02.2020
Maharashtra State Electricity Regulatory Transmission Co. Ltd. Vs. Sri
Commission Transmission Open Access City Pvt. Ltd. & Ors. [CA (AT)
Regulations, 2005 in terms of section 238 of (Ins.) No. 1401 of 2019]
the Code.
657. Section 61(2) of the Code will prevail over Radhika Mehra Vs. Vaayu NCLAT 30.01.2020
section 5 of the Limitation Act, 1963 by Infrastructure LLP & Ors. [CA
virtue of section 238 of the Code. (AT) (Ins.) No. 121 of 2020]
658. Proceedings under Securitization and Bimalkumar Manubhai Savalia NCLAT 05.03.2020
Reconstruction of Financial Assets and Vs. Bank of India and Anr. [CA
Enforcement of Securities Interest Act, (AT) (Ins.) No. 1166 of 2019]
2002 will not extend the period of
limitation since those proceedings are
independent and as per section 238, the
Code will have overriding effect on other
laws.
659. The objective of PMLA, being distinct from The Deputy Director, HC, New 02.04.2019
the purposes of the Recovery of Debts and Enforcement Directorate Vs. Delhi
Bankruptcy Act, 1993, Securitisation and Axis Bank & Ors.
Reconstruction of Financial Assets and [CRL.A.143/2018 & Crl.M.A.
Enforcement of Securities Interest Act, 2262/2018]
2002 and the Code, the latter three
legislations do not prevail over the former.
They must co-exist, each to be construed
and enforced in harmony, without one
being in derogation of the other.
660. CIRP cannot be equated with winding up Duncans Industries Ltd. Vs. A. J. SC 04.10.2019
proceedings and hence no prior consent of Agrochem [Civil Appeal No.
the Central Government under the Tea Act, 5120 of 2019]
1953 would be required for initiation of the
proceedings under section 7 or 9 of the
Code as it overrides the said statute.
661. Even by a process of harmonious Pioneer Urban Land and SC 09.08.2019
construction, Real Estate (Regulation and Infrastructure Ltd. & Anr. Vs.
Development) Act, 2016and the Code must Union of India & Ors. [WP (Civil)
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
be held to co-exist, and, in the event of a No. 43 of 2019 and other
conflict, the Code shall prevail. petitions]
662. The Maharashtra Relief Undertakings Innoventive Industries Ltd. Vs. SC 31.08.2017
(Special Provisions Act), 1958 cannot stand ICICI Bank & Anr. [CA No. 8337-
in the way of the CIRP under the Code. 8338 of 2017]
663. Given section 238 of the Code, it is obvious Pr. Commissioner of Income SC 10.08.2018
that the Code will override anything Tax Vs. Monnet Ispat and
inconsistent contained in any other Energy Ltd. [SLP No.
enactment, including the Income-tax Act, 6483/2018]
1961.
664. Section 238 provides overriding effect of Edelweiss Asset Reconstruction NCLAT 14.12.2018
Code over the provisions of the other Acts, Company Ltd. Vs. Synergies
if any of the provisions of an Act is in Dooray Automotive Ltd. & Ors.
conflict with the provisions of the Code. [CA (AT) (Ins.) 169 to 173 of
2017]
665. The non-obstante clause contained in Macquarie Bank Ltd. Vs. Shilpi SC 15.12.2017
section 238 of the Code will not override Cable Technologies Ltd. [Civil
the Advocates Act, 1961 as there is no Appeal No. 15135 of 2017 with
inconsistency between section 9 read with other appeals]
the AA Rules and Forms, and the Advocates
Act, 1961.
666. Inter-se agreement between the FCs Indian Overseas Bank Vs. Pearl NCLT, 12.10.2018
cannot override the express provisions of Vision Pvt. Ltd. [CP No (IB)- New Delhi
the Code nor can take away the right of any 419(PB)/2018]
creditor to file application under section 7
of the Code.
667. The overriding effect of section 238 of the Precision Fasteners Ltd. Vs. NCLT, 12.09.2018
Code will not have any bearing over the Employees Provident Fund Mumbai
asset of the workmen lying in the Organization [MA 576 and
possession of the CD because that asset will 752/2018 in C.P.(IB)
not be considered as part of the liquidation 1339(MB)/2017]
estate, moreover, to apply section 238 over
any other law for the time being in force,
the other law must be inconsistent with the
provisions of the Code.
668. Section 238 of the Code will apply in case K. Kishan Vs. Vijay Nirman SC 14.08.2018
there is an inconsistency between the Code Company Pvt. Ltd. [Civil Appeal
No. 21824 & 21825 of 2017]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
and the Arbitration and Conciliation Act,
1996.

669. The company petition pending before the Jaipur Metals & Electricals SC 12.12.2018
HC cannot be proceeded with further, in Employees Organisation Vs.
view of section 238 of the Code. The writ Jaipur Metals & Electricals Ltd.
petitions that are pending before the HC & Ors. [Civil Appeal No. 12023
have also to be disposed of in light of the of 2018 arising out of SLP (Civil)
fact that proceedings under the Code must No. 18598 of 2018]
run their entire course.
670. The statutory right of an FC satisfying the Jagmohan Bajaj Vs. Shivam NCLAT 14.08.2018
requirements of section 7 of the Code to Fragrances Pvt. Ltd. & Anr. [CA
trigger CIRP cannot be made subservient to (AT) (Ins.) No. 428 of 2018]
adjudication of an application under
sections 241 and 242 of the Companies Act,
2013. The Code is supreme so far as
triggering of CIRP and same cannot be
eclipsed by taking resort to remedies
available under ordinary law of the land.
671. FC can proceed simultaneously under the Punjab National Bank Vs. NCLAT 26.02.2020
Securitisation and Reconstruction of Vindhya Cereals Pvt. Ltd. [CA
Financial Assets and Enforcement of (AT) (Ins.) No. 854 of 2019]
Securities Interest Act, 2002 as well as
under the Code but section 238 of the Code
will prevail over any other law for the time
being in force.
672. In regard to recovery of the Government Om Prakash Agrawal, NCLAT 08.02.2021
dues (including Income Tax) from a Liquidator - S. Kumars
company in liquidation under the Code, if Nationwide Ltd. Vs. Chief
there is inconsisteI between section 194 IA Commissioner of Income Tax
of the Income-tax Act, 1961 and section (TDS) & Anr. [CA (AT) (Ins.) No.
53(1)(e) of the Code, section 53(1)(e) of the 624 of 2020]
Code shall have overriding effect on the
provisions of the section 194 IA of the
Income-tax Act,–1961 by virtue of section
238 of the Code.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
673. The SC while dealing with an appeal A Navinchandra Steels Pvt. Ltd. SC 01.03.2021
involving the issue of filing of an insolvency Vs. SREI Equipment Finance Ltd.
application under the provisions of the & Ors. [Civil Appeal Nos. 4230-
Code when a winding up petition has 4234 of 2020]
already been admitted against the same
company, held, that a petition either under
section 7 or 9 of the Code is an independent
proceeding which is unaffected by winding
up proceedings that may be filed qua the
same company. It observed that a
discretionary jurisdiction under the fifth
proviso to section 434(1)(c) of the
Companies Act, 2013 cannot prevail over
the undoubted jurisdiction of the AA under
the Code once the parameters under the
Code are fulfilled.
674. There is no conflict between PMLA and the The Directorate of Enforcement NCLAT 09.04.2021
Code, and even if a property has been Vs. Manoj Kumar Agarwal &
attached in the PMLA which is belonging to Ors. [CA (AT) (Ins.) No. 575 and
the CD, if CIRP is initiated, the property 576 / 2019]
should become available to fulfil objects of
the Code till a resolution takes place or sale
of liquidation asset occurs in terms of
section 32A.
675. There is no conflict in section 17B of the Sikander Singh Jamuwal Vs. NCLAT 11.03.2022
Employees Provident Fund and Vinay Talwar and Ors. [
Miscellaneous Provisions Act,1952 and the Company Appeal (AT) (Ins.)
Code, owing to which section 238 of the No.438 of 2019]
Code would not come into force. Hence,
payment or non- payment of provident
fund dues is not a matter of commercial
wisdom, and necessary compliance is a
must. The resolution applicant is liable to
pay the contribution and other sums due
from the employer under any provisioner
of the said Act for the period up to the date
of such transfer.
238A Limitation
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
676. An acknowledgement of debt in the Syndicate Bank Vs. Bothra NCLT, 06.07.2020
balance sheet of the company satisfies the Metals and Alloys Ltd. [CP (IB) Mumbai
requirements of section 18 of the No. 2579/[Link]/ 2019]
Limitation Act, 1963, leading to a fresh
period of limitation commencing from each
such acknowledgement.
677. The provisions of the Limitation Act, 1963 Jagdish Prasad Sarada Vs. NCLAT 28.08.2020
vide section 238A of the Code will be Allahabad Bank [CA (AT) (Ins.)
applicable to all non-performing asset No. 183 of 2020]
cases provided they meet the criteria of
Article 137 of the Schedule to the
Limitation Act, 1963 and that the extension
of the period of limitation can only be done
by way of application of section 5 of the
Limitation Act, 1963, if any case for
condonation of delay is made out.
678. The application under section 7 of the Code Invent Assets Securitization NCLAT 11.08.2020
is governed by Article 137 of the Limitation and Reconstruction Pvt. Ltd. Vs.
Act, 1963 and any application filed by the Xylon Electrotechnic Pvt. Ltd.
FC for initiation of the CIRP beyond three [CA (AT) (Ins.) No. 677 of 2020]
years from the date of the CDs account
being classified as non-performing asset,
would be barred by limitation.
679. As acknowledgement of liability was made Jayprakash Vyas Vs. Prabhat NCLAT 24.07.2020
after a lapse of about five years, a fresh Steel Traders Pvt. Ltd. and Anr.
period of limitation will not accrue since [CA (AT) (Ins.) No. 1238 of 2019]
the period of limitation was three years.
Since the acknowledgement was made
much later than the prescribed period of
limitation, the petitioner cannot claim the
benefit of section 18 of the Limitation Act,
1963, which provides a fresh period of
limitation from the time when the
acknowledgement was so made.
680. Any application filed beyond 3 years from Babulal Vardharji Gurjar Vs. SC 14.08.2020
the date of default is barred by limitation. Veer Gurjar Aluminium
CIRP of the CD was set aside on the ground Industries Pvt. Ltd. & Anr. [Civil
that the application filed under section 7 of Appeal No. 6347 of 2019]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
the Code is barred by limitation, with the
following observations:

(a) the Code is a beneficial legislation

intended to put the CD back on its feet and
is not a mere money recovery legislation;

(b) CIRP is not intended to be adversarial to

the CD but is aimed at protecting the
interests of the CD;

(c) intention of the Code is not to give a new

lease of life to debts which are time-barred;

(d) the period of limitation for an

application seeking initiation of CIRP under
section 7 of the Code is governed by Article
137 of the Limitation Act 1963, and is,
therefore, 3 years from the date when right
to apply accrues;

(e) trigger for initiation of CIRP by a FC is

default on the part of the CD, that is to say,
the right to apply under the Code accrues
on the date when default occurs;

(f) default referred to in the Code is that of

actual non-payment by the CD when a debt
has become due and payable;

(g) if default had occurred over 3 years prior

to the date of filing of the application, the
application would be time-barred save and
except in those cases where, on facts, the
delay in filing may be condoned; and

(h) an application under section 7 of the

Code is not for enforcement of mortgage
liability and Article 62 of the Limitation Act,
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
1963 does not apply to the application
under consideration.
681. Since the CD had acknowledged the debt in Bango Industries Vs. U T Ltd. NCLT, 19.04.2018
2015 in a letter sent to the OC, the [CP (IB) No. 08/KB/2018] Kolkata
application is well within the limitation
period of 3 years.
682. An application which is filed under section Gaurav Hargovindbhai Dave Vs. SC 18.09.2019
7 of the Code will fall within Article 137 Asset Reconstruction Company
instead of Article 62 of the Limitation Act, (India) Ltd. & Anr. [Civil Appeal
1963. No. 4952 of 2019]
683. The period of lockdown ordered by the Suo Moto [CA (AT) (Ins.) No. 01 NCLAT 30.03.2020
Central/State Governments including the of 2020]
period as may be extended either in whole
or part of the country, where the registered
office of the CD may be located, shall be
excluded for the purpose of counting of the
period for CIRP under section 12 of the
Code in all cases where CIRP is pending
before any AA or in appeal before NCLAT.
684. From the minutes of meeting of the Board Rupesh Kumar Gupta Vs. NCLAT 28.02.2020
of Directors, it can be clearly stated that Punjab National Bank & Anr.
there was an acknowledgement of debt by [CA (AT) (Ins.) No. 1119 of 2019]
the CD as on the relevant date and the
application for initiating CIRP was not time
barred.
685. A judgement or a decree for recovery of Ishrat Ali Vs. Cosmos NCLAT 12.03.2020
money by the Civil Court/Debt Recovery Cooperative Bank Ltd. & Anr.
Tribunal cannot shift forward the date of [CA (AT) (Ins.) No. 1121 of 2019]
default for the purposes of limitation. It
was also held that action taken by the FC
under section 13(2) or (4) of the
Securitisation and Reconstruction of
Financial Assets and Enforcement of
Securities Interest Act, 2002 is not a civil
proceeding or appeal or revision, and thus
the period cannot be excluded for counting
the limitation period.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
686. The relevant date is the date of default and Digamber Bhondwe Vs. JM NCLAT 05.03.2020
article 137 of the Limitation Act, 1963 is Financial Asset Reconstruction
applicable, for application under section 7 Company Ltd. [CA (AT) (Ins.)
or 9 of the Code. It was also clarified that No. 1379 of 2019]
though a ‘decree-holder’ is covered in the
definition of ‘creditor’ under section 3(10)
of the Code, he cannot initiate CIRP under
section 7 and 9 as FC and OC do not include
a ‘decree-holder’.
687. The application was filed after 3 years of Sagar Sharma & Anr. Vs. NCLAT 07.02.2020
the cut-off period of default and there was Phoenix ARC Pvt. Ltd. & Ors.
nothing on record to suggest that there was [CA (AT) (Ins.) No. 177 of 2019
acknowledgement of the debt within 3 & I.A. Nos. 3392 & 3542 of
years in terms of section 18 of the 2019]
Limitation Act, 1963. Thus, the application
was barred by limitation.
688. The date of coming into force of the Code Sagar Sharma & Anr. Vs. SC 30.09.2019
does not and cannot form a trigger point of Phoenix ARC Pvt. Ltd. & Anr.
limitation for applications filed under the [Civil Appeal No. 7673 of 2019]
Code.
689. If there is a delay of more than 3 years from Speculum Plast Pvt. Ltd. Vs. PTC NCLAT 07.11.2017
the date of cause of action and no laches on Techno Pvt. Ltd. [CA (AT) (Ins.)
the part of applicant, the applicant can No. 47 of 2017 and other
explain the delay. When there is a appeals]
continuing cause of action, the question of
rejecting any application on the ground of
delay, does not arise.
690. The right to apply under the Code accrues Black Pearls Hotels Pvt. Ltd. Vs. NCLAT 17.10.2017
only on the date the Code came into effect, Planet M Retail Ltd. [CA (AT)
that is, on or after 1stDecember, 2016 and (Ins.) No. 91 of 2017]
before this date.
691. If the default has occurred over 3 years B. K. Educational Services Pvt. SC 11.10.2018
prior to the date of filing of the application, Ltd. Vs. Parag Gupta and
it would be barred under Article 137 of the Associates [Civil Appeal No.
Limitation Act, 1963, save and except in 23988 of 2017]
those cases where, in the facts of the case,
section 5 of the said Limitation Act, 1963
may be applied to condone the delay in
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
filing such application. Section 238A of the
Code, being clarificatory of the law and
being procedural in nature is retrospective
in effect.
692. The HC set aside the order of admission on Gouri Shankar Chatterjee Vs. HC, 15.10.2020
the ground that the AA had no jurisdiction State Bank of India [C.O. 1257 Calcutta
to admit an application under section 7 of of 2020]
the Code, beyond the prescribed period of
three years as provided in Article 137 of the
Limitation Act, 1963.
693. The date of default would not be extended State Bank of India Vs. NCLAT 17.11.2020
on account of acknowledgement made in Krishidhan Seeds Pvt. Ltd. [CA
the OTS proposal (One Time Settlement) of (AT) (Ins.) No. 972 of 2020]
the CD.
694. The limitation under section 7 of the Code, A. Balakrishnan Vs. Kotak NCLAT 24.11.2020
would run from the date of declaration of Mahindra Bank Ltd. & Anr. [CA
the non- performing asset (NPA). The (AT) (Ins.) No. 1406 of 2019]
passing of decree or issue of recovery
certificate, will not give a fresh right to
trigger Code.
695. The date of default is extendable within the Bishal Jaiswal Vs. Asset NCLAT 22.12.2020
ambit of section 18 of Limitation Act, 1963 Reconstruction Company
based on an acknowledgement in writing (India) Ltd. & Anr. [Reference
made by the CD before the expiry of period made by Three Member Bench
of limitation. in CA (AT) (Ins.) No. 385 of
2020]
696. The writers of law were conscious that Vinod Singh Negi Vs. Kiran NCLAT 19.01.2021
there could be situation where time-barred Shah, Liquidator of ORG
debts are claimed before the IRP or the RP. Informatics Ltd. [CA (AT) (Ins.)
The employee submitting claim during the No. 1101 of 2020]
liquidation stage for salary of 2012, without
showing as to how it is within limitation, is
liable to be rejected.
697. Section 238A of the Code makes the Sesh Nath Singh & Anr. Vs. SC 22.03.2021
provisions of the Limitation Act, 1963 as far Baidyabati Sheoraphuli Co-
as may be, applicable to proceedings under operative Bank Ltd. and Anr.
the Code. All provisions of the Limitation [Civil Appeal No. 9198 of 2019]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
Act, 1963 are applicable to proceedings in
the NCLT/NCLAT to the extent feasible.

Legislature has in its wisdom chosen not to

make the provisions of the Limitation Act
verbatim applicable to proceedings in
NCLT/NCLAT, but consciously used the
words ‘as far as may be’. The words ‘as far
as may be’ are not meant to be otiose.
Those words are to be understood in the
sense in which they best harmonise with
the subject matter of the legislation and the
object which the Legislature has in view.
The Courts would not give an interpretation
to those words which would frustrate the
purposes of making the Limitation Act,
1963 applicable to proceedings in the
NCLT/NCLAT ‘as far as may be’.

Section 14 of the Limitation Act, 1963

excludes the time spent in proceeding in a
wrong forum, which is unable to entertain
the proceedings for want of jurisdiction.
698. The SC took suo motu cognizance In Re: Cognizance for Extension SC 23.03.2020
of the situation arising out of of Limitation [Suo Moto Writ
COVID-19 and resultant difficulties that (Civil) No. 3 of 2020]
may be faced by litigants
as to period of limitation prescribed under
general law of limitation or under Special
Laws (both Central and/or State). In
exercise of its powers under Articles 141
and 142
of the Constitution, it ordered extension of
period of limitation for all proceedings,
from 15.03.2020, until further orders, and
declared that the order is binding on all
courts/tribunals and
authorities.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
699. SC ruled that its earlier order that provided In Re: Cognizance for extension SC 08.03.2021
for extension of limitation period w.e.f. of limitation [Suo Motu Writ
15.03.2020, has served its pose and that it Petition (Civil) No. 3 of 2020]
should come to an end. The court issued
the lowing directions: -

i. In calculating the limitation period in any

suit, appeal, application or proceeding, the
period from 15.03.2020 till 14.03.2021 is to
be excluded, and any balance of the
limitation period as on 15.03.2020 will start
w.e.f. 15.03.2021.

ii. If the limitation period would have

expired during the 1 year extension period,
a limitation period of 90 days will be
available from 15.03.2021. If the balance of
the limitation period remaining on
15.03.2021 is more than 90 days, then the
longer period will apply.

iii. The 1 year extension period is also to be

excluded when calculating the prescribed
periods under sections 23(4) and 29A of the
Arbitration and Conciliation Act 1996,
section 12A of the Commercial Courts Act
2015 and provisos (b) and (c) of section 138
the Negotiable Instruments Act 1881 and
any other law which prescribe period(s) of
limitation for instituting proceedings, outer
limits (within which the court or tribunal
can condone delay) and termination of
proceedings.
700. In computing the period of limitation for In Re: Cognizance for Extension SC 23.09.2021
any suit, appeal, application or proceeding, of Limitation [MA No. 665 of
the period from 15.03.2020 till 02.10.2021 2021 in SMW (C) No. 3 of 2020]
shall stand excluded.
701. Acknowledgement of debt in the balance Asset Reconstruction Company SC 15.04.2021
sheet extends the period of limitation (India) Ltd. Vs. Bishal Jaiswal &
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
under section 18 of the Limitation Act, Anr. [Civil Appeal No. 323 of
1963. However, it would depend on the 2021 with other appeals]
facts of each case as to whether an entry
made in a balance sheet qua any creditor is
unequivocal or has been entered into with
caveats, which would establish whether an
acknowledgement of liability has, in fact,
been made. The majority decision of the
full bench of the NCLAT in V. Padmakumar
Vs. Stressed Assets Stabilisation Fund, was
set aside.
702. An application under section 7 of the Code Dena Bank (now Bank of SC 04.08.2021
would not be barred by limitation, on the Baroda) Vs. C. Shivakumar
ground that it had been filed beyond a Reddy and Anr. [Civil Appeal
period of three years from the date of No. 1650 of 2020]
declaration of the loan account of the CD as
NPA, if there were an acknowledgement of
the debt by the CD before expiry of the
period of limitation of three years, in which
case the period of limitation would get
extended by a further period of three years.
703. An offer of one-time settlement can be Ishita Halder Vs. Siba Kumar NCLAT 18.08.2021
relied on for the purpose of considering Mohapatra & Anr. [CA (AT)
acknowledgement under section 18 of the (Ins.) No. 282 of 2021]
Limitation Act.
704. A decree passed by the DRT or any suit, G Eswara Rao Vs. Stressed NCLAT 07.02.2020
cannot shift the date of default. The decree Assets Stabilisation Fund & Anr.
passed by the DRT only suggests that debt [CA (AT) (Ins.) No. 1097 of 2019]
has become due and payable.
705. Mere issuance of a letter by the CD calling State of West Bengal Vs. Keshav NCLAT 08.12.2021
the representative of the OC with all the Park Pvt. Ltd. & Anr. [CA (AT)
papers to settle the dispute, cannot be (Ins.) No. 330-331 of 2020]
considered as an ‘acknowledgement of
debt’ in terms of section 18 of the
Limitation Act.
706. For the purpose of limitation, the relevant Tech Sharp Engineers Pvt. Ltd. SC 19.09.2022
date is the date on which the right to sue Vs. Sanghvi Movers Ltd. [Civil
Appeal No. 296 of 2020]
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
accrues which is the date when a default
occurs.
707. Section 12 of the Limitation Act cannot be Platinum Rent a Car (India) Pvt. NCLAT 12.01.2023
invoked as section 238 of the Code has an Ltd. v M/s. Quest Offices
overriding effect. Further, the procedural Limited [CA(AT) (CH) (Ins)
formalities (including the time limit) given No.448/2022]
under the Code must be followed in true
‘letter and spirit’, as speed is essence of the
Code.
708. Section 5 of the Limitation Act, 1963 Sabarmati Gas Ltd. Vs. Shah SC 04.01.2023
showing ‘sufficient cause’ is the only Alloys Ltd. [Civil Appeal No.
criterion for condoning delay and that 1669 of 2020]
‘sufficient cause’ is the cause for which a
party could not be blamed.

240 Power to make regulations

709. Section 240 is the general regulation CA. Venkata Siva Kumar Vs. IBBI HC, Madras 28.07.2020
making power of the IBBI and section & Ors. [W.P. No. 9132 of 2020
240(1) does not impose any restraints on and W.M.P. No. 11134 of 2020]
the powers of the IBBI, except that
regulations should be consistent with the
Code and the rules thereunder and should
be for the purposes of carrying out the
provisions of the Code.
710. I The exemption granted under section 240A Harkirat Singh Bedi Vs. The NCLAT 12.01.2021
of the Code is only in respect of clause (c) Oriental Bank of Commerce &
and (h) of section 29A of the Code and in Ors. [CA (AT) (Ins.) No. 40 of
the instant case, the Appellant was 2020]
declared ineligible under clause (b) of
section 29A i.e., declared as a willful
defaulter for which no exemption has been
given to MSME. The NCLAT further held
that since the date of registration of the CD
as MSME was after the order of admission,
the application for registration of MSME
was without authorization, and hence was
invalid.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
711. SC upheld the regulation making powers of Abhishek Singh Vs. Huhtamaki SC 28.03.2023
the Board and observed that the Board is PPL Ltd. and Anr. [Civil Appeal
conferred with powers to frame No(s). ____ of 2023 (Arising out
regulations for various purposes under the of SLP (Civil) No. 6452 of 2021)]
Code. The regulations may be subordinate
in character but would still carry a statutory
flavor and would be binding on the NCLT.
252 Amendments of Act 1 of 2004 (The Sick Industrial Companies (Special Provisions) Repeal Act, 2003)
712. It was held that the power to reject the Bank of New York Mellon SC 21.02.2017
reference, on the ground that the company London Branch Vs. Zenith
is not an industrial unit, does not lie with Infotech Ltd. [Civil Appeal No.
the Registrar or the Secretary of the Board 3055 of 2017]
for Industrial and Financial Reconstruction.
Therefore, the reference was deemed to be
pending before BIFR on 01.11.2016 (date of
commencement of the Code) and the
company can seek its remedies under the
provisions of section 252 of the Code.
255 Amendments of Act 18 of 2013 (The Companies Act, 2013)
713. In a case where a winding up proceeding Unigreen Global Pvt. Ltd. Vs. NCLAT 01.12.2017
has been initiated against a CD by the High Punjab National Bank [CA (AT)
Court or Tribunal or liquidation order has (Ins.) No. 81 of 2017]
been passed in respect of the CD, no
application under section 10 can be filed by
the corporate applicant in view of the
ineligibility under section 11(d) of the Code.
Rules / Regulations under the Code
714. Rule 6 of The trade union collectively represents its JK Jute Mill Mazdoor Morcha SC 30.04.2019
AA Rules members who are workers, to whom dues Vs. Juggilal Kamlapat Jute Mills
may be owed by the employer, which are Company Ltd. & Ors. [Civil
debts owed for services rendered by each Appeal No. 20978 of 2017]
individual workman. If each workman files
a separate cause of action, the fact that a
joint petition could be filed under rule 6 of
AA Rules would be ignored.
715. Rule 8 of In the appeal before SC, a question as to Lokhandwala Kataria SC 24.07.2017
AA Rules whether, in view of rule 8 of the AA Rules, Construction Pvt. Ltd. Vs. Nisus
the NCLAT could utilise the inherent power Finance and Investment
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
under rule 11 of the National Company Law Managers LLP [Civil Appeal no.
Appellate Tribunal Rules, 2016, to allow 9279 of 2017]
compromise before it by the parties after
admission of the matter. The SC upheld the
views of NCLAT that after admission,
inherent power could not be utilised.
However, by using its power under Article
142 of the Constitution, allowed the
consent terms.
716. Regulatio The proper interpretation on clauses (a) Alchemist Asset Reconstruction NCLT, 16.07.2019
n 33 of and(b) of the regulation 33 of Liquidation Co. Ltd. Vs. Moser Baer India New Delhi
Liquidati Process Regulations would be that a Ltd. [CA-769(PB)/2019 in C.P.
on liquidator is entitled to sell the assets No. IB-378(PB)/2017]
Process without requirement of prior permission
Regulatio after reaching the conclusion that the
ns assets are perishable, and it is likely to
deteriorate significantly in value if not sold
immediately. Otherwise, the purpose of
Regulation would be defeated if time is
required to be spent in filing an application
and taking permission, because the assets
which are perishable may not remain
available for sale and perish or it may
deteriorate significantly in value, if not sold
immediately.
717. Regulation The HC directed IBBI to consider the MRG Estates LLP Vs. Akash HC, New 15.12.2020
33 of petition as a representation on the issue of Shinghal, Liquidator, Amira Delhi
Liquidation adoption of Swiss Challenge method as a Pure Foods Pvt. Ltd. & Ors.
Process form of an auction under the Liquidation [W.P.(C) 10023/2020]
Regulations Process Regulations.
718. Regulation Regulation 31A(3) of Liquidation Process Advance Cargo Movers (India) NCLT, New 20.07.2021
31A(3) of Regulations is silent on both ‘the criteria as Pvt. Ltd. Vs. SBS Transpole Delhi
Liquidation well as the process of nomination’ of a Logistics Pvt. Ltd. [I.A.
Process representative but has bestowed a duty on 2084/ND/2021 in CP(IB)-
Regulations the liquidator to facilitate the stakeholders 1373(ND)/2019]
of each class to nominate their
representatives for inclusion in the
Stakeholders Consultation Committee.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
719. Regulation It is the responsibility of the creditor to file Dy. Commissioner of Customs NCLT, 05.10.2020
6 of CIRP claim within the time after the issue of DEEC (Monitoring Cell) Vs. Jyoti Mumbai
Regulations public notice inviting claims by the RP. Structures Ltd. & Ors. [IA
1218/MB/2020 in CP(IB)
1137/MB/2017]
720. Regulatio Regulation 30A(1) of the CIRP Regulations Swiss Ribbons Pvt. Ltd. & Anr. SC 25.01.2019
n 30A(1) is not mandatory but directory for the Vs. Union of India & Ors. [WP
of CIRP simple reason that on the facts of a given (Civil) Nos. 99, 100, 115, 459,
Regulatio case, an application for withdrawal may be 598, 775, 822, 849, and 1221 of
ns allowed in exceptional cases even after 2018, SLP (Civil) No. 28623 of
issue of invitation for expression of interest 2018 and WP (Civil) 37 of 2019]
under regulation 36A of the said
Regulations.
721. Regulation The fact that CoC has taken a decision Narinder Bhushan Aggarwal Vs. NCLAT 18.11.2020
39D of CIRP regarding the liquidation costs, expenses, Little Bee International Pvt. Ltd.
Regulations and the remuneration payable to the & Anr. [CA (AT) (Ins.) No. 980 of
liquidator with the requisite percentage, 2020]
brings it within the ambit of regulation 39D
of the CIRP Regulations. It is not permissible
to resort to any other provision if action of
CoC falls within the purview of regulation
39D.
722. Regulation In terms of section 60(5), the categories of Insolvency and Bankruptcy HC, New 28.11.2022
36A of CIRP cases which can be adjudicated by the AA Board of India Vs. State Bank of Delhi
Regulations have been clearly enumerated, and the India & Ors. [W.P. (C)
jurisdiction to deal with the validity of the 10189/2018 & CM APPL.
regulations framed under the Code is not 39715/2018]
conferred upon the AA. The AA being a
creature of the Code, cannot assume to
itself the power of declaring any provisions
of the Code or the regulations framed there
under as illegal or ultra vires.
723. Regulatio The Code contains adequate safeguards to CA. Venkata Siva Kumar Vs. IBBI HC, Madras 28.07.2020
n 7(2)(ca) ensure that the Parliament effectively & Ors. [W.P. No. 9132 of 2020
of IP supervises all rules and regulations with the and W.M.P. No. 11134 of 2020]
Regulatio power to modify or even annul the same
ns and that regulation 7(2)(ca) of the IP
Regulations does not suffer from any
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
constitutional infirmity on account of the
absence of quid pro quo.

724. Regulatio The delegation of power is not in CA V. Venkata Sivakumar Vs. HC, Madras 03.11.2020
n 7A of IP derogation of the principles laid down by IBBI & Ors. [WP No. 13229 of
Regulatio earlier jurisprudence. Further the 2020]
ns and existence of more than one authority with
Regulatio regulatory or disciplinary control over a
n 12A of professional is per se not a ground to hold
the IBBI that the impugned regulations are
(Model unconstitutional The criteria mentioned
ByeLaws under regulation 12A are clearly not
and unreasonable or arbitrary but appear to be
Governin germane for deciding the eligibility of an IP
g Board for such AFA, as these measures are
of intended to regulate the profession and not
Insolvenc to deprive a person of the right to practice
y the profession.
Professio
nal
Agencies)
Regulatio
ns, 2016
725. 47A Model Timeline is only directory in nature. Standard Surfa Chem India Pvt. NCLAT 14.02.2022
(Liquidati It cannot be considered a deadline. It is Ltd. Vs. Kishore Gopal Somani,
on provided under the regulation as a guiding the Liquidator of Advanced
Process) factor to complete the liquidation process Surfactants India Ltd. [CA (AT)
Regulatio in a time-bound manner. In exceptional (Ins.) No. 684 of 2021]
ns,2016 circumstances, such a time limit can be
extended.
726. Regulatio Insolvency process costs include amount Prerna Singh Vs. Committee of NCLAT 17.12.2021
n 31 of due to a person who is prejudicially Creditors, Xalta Food and
the CIRP affected on account of the moratorium Beverages Pvt. Ltd. [Contempt
Regulatio imposed under section 14(1)(d). Due to Case (AT) No.03 of 2020 in
n, 2016 moratorium period, the lessor could not CA(AT)(Insolvency)No.104 of
recover the possession of property from 2019]
the CD. Thus, the right of lessor is affected
on account of moratorium. Therefore, the
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
lessor is entitled to recover the rent, and
which shall be included in IRPC.

727. Clause 12 90 days period provided for making the Potens Transmissions & Power NCLAT 12.05.2022
of deposit is the maximum period under Pvt. Ltd Vs. Gian Chand Narang
Schedule which the auction purchaser had to make [CA (AT) (Ins.) No. 532 of 2022]
1 of the the deposit. Sale shall be cancelled if the
Liquidati payment is not received within 90 days.
on
Process
Regulatio
ns, 2016
MISCELLANEOUS
Fee of IRP/IPE
728. For performance of duty of 27 days Bhasin Infotech and NCLAT 13.12.2018
as IRP, a fee of Rs. 5 lakh is Infrastructure Pvt. Ltd. Vs.
excessive. An IPE is not eligible or entitled Gurpreet Singh [CA (AT) (Ins.)
to receive any fees or any cut or No. 491 of 2018]
commission from the fees of the IRP.

Suspended management’s locus standi

729. The suspended management has no locus Himanshu Prafulchandra Varia NCLT, 22.07.2020
standi to move an application to start Vs. Sunil Kumar Agarwal & Ors. Ahmedaba
business operations, when the CD is under [IA 347 of 2020 in IA 362 of 2019 d
the control of the liquidator. There is no in CP(IB)No. 149/NCLT/AHM/
statutory provision which allows the CD to 2017]
run the company till it is sold as a going
concern.
Exemption of lockdown period
730. The period of CIRP during promulgation of Finquest Financial Solutons Pvt. NCLT, 15.09.2020
lockdown will be exempted pursuant to the Ltd. Vs. Ballarpur Industries Ltd. Mumbai
notification of the Central Government [IA No. 1175 of 2020 in CP(IB)
read with new amendment which took No. 2915/2019]
place in the CIRP Regulations of the IBBI.

731. Having considered nationwide lockdown in In the matter of Sudip NCLAT 08.10.2020
the wake of Covid-19 from March 23, 2020 Bhattacharya, RP of Reliance
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
to May 29, 2020 and extension of lockdown Naval and Engineering Ltd. [CA
in Maharashtra till August 31, 2020, (AT) (Ins.) No. 858 of 2020]
directed that the period of lockdown from
March 25, 2020 till August 31, 2020 shall be
excluded while computing the period of
CIRP.
Right of defaulted promoters of MSMEs
732. Since CD is an MSME, even if the Marutham Steel Rolling Mills NCLT, 03.07.2020
promoters/directors have been declared as Pvt. Ltd. [MA/1219/2019 in Chennai
wilful defaulters, they can apply under the IBA/264/2019]
provisions of section 230 of the Companies
Act, 2013 as they are exempted from
section 29A of the Code.
Bar of filing suits inapplicable under Code
733. The bar in filing of suit in terms of section Shree Dev Chemicals NCLT, 16.07.2020
69(2) of the Indian Partnership Act, 1932 Corporation Vs. Gammon India Mumbai
will not apply on applications filed under Ltd. [CP(IB)No
the Code as they are not ‘suits’ but are only 3637/[Link]/2018]
‘proceedings’.
Conflict of interest
734. The RP may not be currently in Kanakabha Ray Vs. Narayan NCLAT 18.08.2020
employment of the FC or drawing salary Chandra Saha & Ors. [CA (AT)
under it but the fact remains that on (Ins.) No. 687 of 2020]
account of services rendered in past, an
element of loyalty is there which cannot be
ignored. Accordingly, there is a possibility
that the RP would not be fair in his working.
Power of AA to review
735. The power to review is not an inherent Deepakk Kumar Vs. Phoenix NCLAT 17.09.2020
power under rule 11 of the NCLT Rules, ARC Pvt. Ltd. and Anr. [CA (AT)
2016, and hence, a review jurisdiction (Ins.) No. 848 of 2019]
cannot be pressed into service as an
appellate jurisdiction.
Power of AA to issue non bailable warrant
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
736. AA while exercising jurisdiction under the Vikram Puri (Suspended NCLAT 28.02.2022
code is empowered to issue non-bailable Directors) & Anr. Vs Universal
warrant against any person or party. in Buildwell Private Limited &
addition to enforcement of non-bailable Anr. [CA (AT) (Insolvency) No.
warrants, it shall be also open for the AA to 1018 of 2021]
recommend for initiation of prosecution
against the suspended directors of the CD
in event of commission of an offence within
meaning of Code.
737. The power of review has not been expressly Anubhav Anilkumar Agarwal NCLAT 07.12.2020
conferred on NCLAT and the power under Vs. Bank of India & Anr.
Rule 11 of NCLAT Rules, 2016 can only be [Review Application (AT) No. 15
exercised for correction of mistakes. The of 2020 in CA (AT) (Ins.) No.
power of review is not an inherent power 1504 of 2019]
which cannot be exercised unless
conferred specifically or by necessary
implication.
Fixation of fee of RP
738. Fixation of fee of the RP is not a business Devarajan Raman Vs. Bank of NCLAT 30.07.2020
decision depending upon the commercial India Ltd. [CA (AT) (Ins.) No. 646
wisdom of the CoC. of 2020]
739. IBBI is fully clothed with jurisdiction to Sumit Bansal, Insolvency NCLAT 18.02.2022
regulate payment of remuneration of RP Professional Vs. Committee of
and IRP both by framing regulation or by Creditors of JP Engineers Pvt.
issuing executive instructions till regulation Ltd & Ors. [ CAomp. App.
are not framed. (AT)(Ins.) No.160 of 2022]
740. AA noted that in many cases, the creditors Sarvesh Kashyap Vs Bank of NCLT, 22.02.2022
sitting on the CoC and stakeholders’ India [IA No.05/ALD/2021 in Allahabad
consultation committee do not loosen their CP(IB)No.344/ALD/2018]
purse strings easily to meet even the bare
minimum CIRP costs. In the vast majority of
the cases, the insolvency professional and
the professional team assembled by him
for various activities have to wait for
months on end to get reimbursements or
their fee, even after the CoC had already
approved incurring the expense in
question.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
Power of HC in writ jurisdiction
741. There is no absolute bar on the HC to Atin Arora Vs. Oriental Bank of HC, 13.08.2020
entertain an application under Article 227 Commerce [C.O. No. 3894 of Calcutta
of the Constitution, when a challenge is 2019 with CAN 12340 of 2019]
made to an order, which is otherwise
amenable to be challenged by way of an
appeal before the appellate forum if there
is a patent error or miscarriage of justice
apparent from the record.
Notes on Clauses and construction of provisions
742. There is no doubt whatsoever that Notes Vijay Kumar Jain Vs. Standard SC 31.01.2019
on Clauses are an important aid to the Chartered Bank & Ors. [Civil
construction of sections of the Code as they Appeal No. 8430 of 2018 with
show what the drafting committee had in WP (C) No.1266 of 2018]
mind when such provisions were drafted.
FC’s obligation to meet cost of processes
743. For effective continuation of CIRP, the FC Reliance Commercial Finance NCLT, 12.04.2019
constituting the CoC has to contribute to Ltd. Vs. Noble Resourcing New Delhi
the expenses, fee and other cost of the Business and Solution Pvt. Ltd.
process, otherwise the whole process [(IB)-494(PB)/2017]
would come to a halt and cause
unnecessary delay.
Power of IBBI to Levy Fees
744. The powers of IBBI to frame regulations CA. Venkata Siva Kumar Vs. IBBI HC, Madras 28.07.2020
with regard to the fee payable by IPs and & Ors. [W.P. No. 9132 of 2020
IPEs cannot be questioned if the power is and W.M.P. No. 11134 of 2020]
used for carrying out the purposes of the
Code.
Ex-employee of FC becoming IRP
745. Substitution of RP on the apprehension of State Bank of India Vs. SC 19.08.2020
bias was challenged before the SC on the Metenere Ltd. [Civil Appeal No.
premise that the proposed IRP was an ex- 2570 of 2020]
employee of the FC in service for over 39
years and was drawing pension from the
FC. It was observed that the approach
adopted by the NCLAT was incorrect that
merely an RP who was in the service of the
FC and was getting pension, was disentitled
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
to be the IRP. However, while directing the
AA to appoint a new RP, it further observed
that the change of the RP shall not reflect
adversely upon the integrity of the
concerned RP who was replaced. It was also
clarified that as the impugned order does
not reflect a correct approach, the same
shall not be treated as a precedent.
Dispensation of justice by NCLAT
746. The NCLAT closed its functioning as one of Marathe Hospitality Vs. SC 10.07.2020
its employees was suffering from Covid-19. Mahesh Surekha & Ors. [SLP (C)
On appeal, the SC observed that the doors No(s). 8139 of 2020]
of justice cannot be closed and that NCLAT
should find out a way for online hearing in
such a situation. While dismissing the
appeal, it requested the NCLAT to start
hearing the matter on interim stay,
immediately on reopening.
Common RP
747. The AA will admit applications under Edelweiss Asset Reconstruction NCLAT 20.09.2019
section 7 filed against five CDs and appoint Company Ltd. Vs. Sachet
a common RP and the project will be Infrastructure Pvt. Ltd. [CA (AT)
completed in one go by initiating a (Ins.) No. 377-385 of 2019]
consolidated resolution plan for total
development.
Consolidation of assets and liabilities
748. The AA ordered that the assets and State Bank of India & Anr. Vs. NCLT, 08.08.2019
liabilities of the Videocon group companies Videocon Industries Ltd. & Ors. Mumbai
should be substantively consolidated due [MA 1306/2018 in CP Nos. 02-
to common control, common directors, 2018 and other applications]
common assets, common liabilities,
interdependence, interlacing of finance,
co-existence for survival, pooling of
resources, intertwined accounts,
interloping of debts, singleness of
economics of units, common FCs and
common group of CDs.
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
749. The concept of group insolvency is Punjab National Bank Vs. KSK NCLT, 12.02.2021
unknown to the Code. If the AA directs Mahanadi Power Company Ltd. Hyderabad
CoCs and RPs of different CDs to resolve & Ors. [IA No. 32/2020 in CP(IB)
insolvencies of different CDs together, No. 492/07/HDB/2019]
there will be a chaotic situation relating to
consolidation of assets and liabilities of all
the CDs. The inherent jurisdiction of the AA
under Rule 11 of the NCLT Rules cannot be
used to create such a situation.
Penalty for failure to provide information of assets
750. The AA imposed cost of Rs. 10 lakh on the Asset Reconstruction Company NCLT, 28.03.2019
appellants because they failed to provide (India) Ltd. Vs. Shivam Water Mumbai
any information pertaining to assets, Treaters Pvt. Ltd. [CP(IB)
finance and operations of the CD and did 1882(MB)/2018]
not extend their cooperation to RP for
taking control and custody despite
directions under section 19.
Penalty for initiating CIRP of functional company
751. Starting of CIRP against a functional Vinod Mittal Vs. Rays Power NCLAT 18.11.2019
company is a serious matter and parties Experts &Anr. [CA (AT) (Ins.)
cannot be allowed to play hide and seek. It No. 851 of 2019]
imposed a cost of Rs. 5 lakh on the OC and
Rs. 2.5 lakh on the son of the director of the
OC.
Penalty for abuse of power by RP
752. The action or rather inaction by the RP in BMW India Financial Services NCLT, 16.10.2019
not taking a decision on the claim is his Pvt. Ltd. Vs. SK Wheels Pvt. Ltd. Mumbai
abuse of the power under the Code, and [MA No. 2319/2019 in CP (IB)
contrary to justice and public policy. The RP 4301/ 2018]
was directed to pay the amount claimed by
him along with a cost of one lakh rupees to
the applicant.
Penalty for non-implementation of approved plan
753. AA imposed a cost of Rs. 10 lakh because Ingen Capital Group LLC Vs. NCLAT 30.04.2019
the appellant did not implement the Ramkumar S.V. Anr. [CA (AT)
resolution plan which was approved by the (Ins.) No. 795 of 2018]
CoC and the AA.
Penalty for non-cooperation with RP
Sl. No. Section Dictum Citation Forum Date of
Order/
Judgement
754. The AA slapped a cost of Rs. 5 lakh on the Directorate of Economic NCLAT 05.02.2020
delinquent officer of the Directorate of Offences Vs. Binay Kumar
Economic Offences, for not cooperating Singhania and Ors. [CA (AT)
with RP as directed by the HC. The NCLAT (Ins.) No.1361-1362 of 2019]
noted that though the conduct of officer for
not extending cooperation may be violative
of the directions of the HC, however, the
same cannot be linked with the order of
liquidation. Therefore, the NCLAT observed
that while passing order of liquidation, the
AA exceeded its jurisdiction in slapping the
appellant with liability of costs.
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