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Landmark Judgments by the Hon’ble NCLAT 1st to15th Dec, 2021

  1. C. Raja John Vs. Mr. R. Raghavendran RP of Springfield Shelters Pvt. Ltd. (DOJ: 01.12.2021)

In the instant case, NCLT dismissed the application of the Appellant on the ground that the Appellant suffers a disqualification under Section 29(A)(e) of the Code and observed that the Appellant is trying to gain a backdoor entry on the guise of presenting itself as a MSME.  The Hon’ble NCLAT keeping in view of the object of the Code i.e, Maximization of the Value of the Assets of Corporate Debtor, held that if the Corporate Debtor is an MSME, it is not necessary for the Promoters to compete with other Resolution Applicants to regain the control of the Corporate Debtor. Further, the Hon’ble Tribunal allowed the Appellant to submit net worth certificate to the Resolution Professional, which rendered the Appellant ineligible to submit the Resolution Plan. Accordingly, the order of the NCLT was set aside.


  1. M/s. Hasmukh N. Shah & Associates Vs. M/s. Victoria Entertainment Pvt. Ltd. (DOJ: 01.12.2021)

In the present Appeal the facts of the case is that the NCLT delivered its judgment on 20.07.2018 whereas the Appellant applied certified copy of the order twice firstly on 21.01.2019 and then on 29.07.2021. Thereafter, the certified copy was ready and issued on 29.07.2021 and all Appeals under Section 61 of the Code were filed on 20.09.2021.

The Hon’ble NCLAT held that the limitation to file Appeal under Section 61 of the Code cannot be treated to be under suspension till free of cost copy is received by party as enjoined by Rule 50, which oblige the Registry to send a certified copy of final order passed to the parties concerned free of cost. The Hon’ble Tribunal further differentiated the case of the Hon’ble Supreme Court in the matter of Ms. Sagufa Ahmed & Ors. Vs. Upper Assam Plywood Products Pvt. Ltd. & Ors. wherein the certified copy of the judgment was applied within 27 days from the delivery of judgment, whereas in the instant case the certified copy of the Application was claimed by the Appellant after more than three years of the delivery of the judgment. Thus, the Appeals have been filed after expiry of limitation, are barred by time and cannot be entertained.


  1. The Assistant Commissioner Central Goods and Service Tax vs Pravin Charan Dwary IRP/RP M/S. Swastik Ceracon (DOJ: 01.12.2021)

In the instant Appeal the Appellant was aggrieved by the order of the NCLT whereby its application seeking permission to auction the assets of the Corporate Debtor was rejected. The Appellant submitted that since the assets of the Corporate Debtor were ceased before the declaration of Moratorium under Section 14 of Code, they are entitled to auction the said assets, for recovering the Government dues. The Hon’ble NCLAT relying on the landmark judgement of the Hon’ble Supreme Court in the case of Anand Rao Korada, Resolution Professional vs. Varsha Fabrics Private Limited and Ors. observed that once the CIRP has commenced and Moratorium is declared, the assets of the Corporate Debtor cannot be alienated. Furthermore, since the Appellant had already filed its claims to the Resolution Professional, they cannot auction the assets of the Corporate Debtor to recover their dues. Hence the appeal was dismissed.


  1. Rajat Metaal Polychem Pvt. Ltd. vs Neeraj Bhatia Resolution Professional (DOJ: 02.12.2021)

In the instant Appeal the facts of the case is that the NCLT dismissed the Appellant’s grievance that the Resolution Professional had not admitted his claim(s) in full, on the ground that after approval of a Resolution Plan by the CoC, NCLT cannot interfere with the decisions of the CoC and question its commercial wisdom.

The Hon’ble NCLAT without going into the merits of the Appellant’s grievances has been pleased to observe that despite there being no provision to file an Appeal against the rejection of claims, an aggrieved party can present its grievance u/s 60 (5)(b) of Code. The Hon’ble Tribunal also observed that the NCLT should have gone into the merits of the Appellant’s grievances before dismissing them, as the Resolution Plan was still pending approval before the NCLT. The Hon’ble Tribunal further observed that when a Resolution Plan is submitted to the NCLT which is pending approval, NCLT has jurisdiction to issue suitable directions. Hence the present Appeal was allowed.


  1. Department of Goods & Service Tax, Deputy Commissioner of CGST, Kadi. Vs. Technovaa Plastic Industries Pvt. Ltd. (DOJ: 06.12.2021)

In the instant case, the Hon’ble NCLAT referring to the judgment of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta and Others and Ghanashyam Mishra & Sons (P) Ltd. v Edelweiss Asset Reconstruction Co. Ltd. reiterated that the Resolution Plan which has been approved by the NCLT, wherein the claim of the Appellant was filed much belatedly leading to not inclusion, needs no adjudication. Accordingly, the Appeal was dismissed.


  1. Prakash Chandra Kapoor Vs Vijay Kumar Iyer, (Liquidator) (DOJ: 08.12.2021)

In the instant case, the Hon’ble NCLAT held that to achieve Beneficial Liquidation as provided under Section 35(1)(e) and maximisation of the value of assets under Section 53 of the Code, it just and expedient to exercise inherent powers under Rule 11 of the NCLAT Rules, 2016 to extend the period by six weeks, enabling the Liquidator to attempt the Sale as a ‘Going Concern’ at an appreciable value. The Hon’ble Tribunal further observed that the timelines under Regulation 47 for Liquidation Process, are directory. Procedural law should not be construed as an obstruction but as an aid to Justice. Extension of time under Liquidation may be allowed only on the satisfaction that there exists exceptional circumstances. Thus, the Regulation cannot override the objective of ‘beneficial liquidation’ provided for in Section 35(1)(e) of the Code.


  1. Apya Capital Services Private Limited vs Guardian Homes Private Limited (DOJ: 09.12.2021)

In the instant case, the Hon’ble NCLAT had passed an order in favour of the Appellant. The Respondent being aggrieved of the same, challenged the said order before the Hon’ble Supreme Court of India, whereby the Hon’ble Apex Court rejected the same. Thereafter, the Respondent herein filed an Application in the disposed of Appeal of the Appellant, inter alia seeking recall of its earlier order passed u/s 424(1) of the Companies Act, 2013 read with Rule 11 of National Company Law Appellate Tribunal Rules, 2016.

The Hon’ble NCLAT in this case observed that neither Section 424 of the Companies Act nor Rule 11 of the NCLAT Rules, 2016 grants power to the NCLAT to recall an order passed by it after the said order has been challenged before the Supreme Court, same being dismissed. The Hon’ble Tribunal further observed that the Code does not permit the NCLAT to recall a judgment. Hence the present appeal was dismissed.