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AAA Newsletter

Landmark Judgement by the Hon’ble NCLAT 16th to 31st December, 2020

1.  Mohan Lal Jain, in the capacity of Liquidator of Kaliber Associates Pvt Ltd v. Lalit Modi & Ors (DOJ:16.12.2020)

The Liquidator approached the Adjudicating Authority to invoke Sections 43 and 66 of the Code, in regard to preferential transactions and fraudulent trading/ wrongful trading wherein the Adjudicating Authority referred the matter to Ministry of Corporate Affairs, with directions that explanation of the opposite party, if required, can be offered to the Investigating Agency.


Landmark Judgement by the Hon’ble NCLAT 1st to 15th December, 2020

Excise and Taxation Department Rewari, Haryana v. M/s Argl Ltd & Ors (DOJ 04.12.2020)

The NCLAT observed with disappointment that delay of 307 days, is sought to be condoned by the Appellant, on the ground of completion of inter departmental procedures, is absurd and the complacency on the part of those at the helm of affairs, cannot be a legal consideration warranting condonation of delay.  The Appeal was not filed within the prescribed period of 30 days or even within the extended period of 45 days.


Landmark Judgements by the Hon’ble NCLAT 15th to 30th November, 2020

1) State Bank of India v. Krishidhan Seeds Pvt Ltd (DOJ 17.11.2020)

The date of filing of the Application in the prescribed format to the Adjudicating Authority was nearly four years after the date on which the default occurred. The Appellant assails that the impugned order primarily on the ground that there was an Acknowledgment by the Corporate Debtor through revival letter extending the period of limitation which is said to have been overlooked by the Adjudicating Authority.  NCLAT held that there cannot be two defaults in respect of the same debt, one for the purpose of claim filed before the Debts Recovery Tribunal and the other for the purposes of I&B Code based on OTS proposal, more so when an is an application filed before the Adjudicating Authority in prescribed format and the date of default has unambiguously been reflected beyond three years of the occurrence of default. Such an application is hopelessly time-barred and shall not be permissible for Appellant. The petition was dismissed at the threshold.


Landmark Judgements by the Hon’ble NCLAT (1st to 15th November, 2020)

In Rajendra Bhai Panchal v. M/s Jay Manak Steels,

It was held that mere mistake in the demand notice under section 8 of the Code would not render such notice defective, and if the Corporate Debtor were to question the validity of the demand, the burden would lie on the Corporate Debtor to show that it was adversely affected by the mistake. It was further held that the mere fact of quantum of debt being mis-stated would not ipso facto render that decision defective, as long as the minimum satisfactory figure is owed since it is not the burden of the Adjudicating Authority to determine the quantum of debt. NCLAT clarified that, in such scenarios, the Court would only invalidate the notice if injustice is caused to the debtor if the failure to interfere would cause injustice to the debtor. The Appeal filed by the Appellant (Ex-Director & Shareholder of Corporate Debtor), against NCLT Ahmedabad Bench order dated 03.06.2020 admitting the application under section 9, was dismissed.


NCLAT Landmark Judgements Roundup: Sep 2020 – Oct 2020

  1. The NCLAT in JM Financial Asset Reconstruction Company Ltd. v. Samay Electronics Pvt. Ltd., the same Bench of the Adjudicating Authority, which passed two conflicting orders, to make a reference to Hon’ble President, NCLT, if not already made, in terms of Section 419 (5) of the Companies Act 2013, for hearing on the issues and points on which the two Members of the Bench had divergent view in the split verdict so that the matter is placed before a third Member for hearing and the Company Petition is decided in accordance with the opinion of the majority of members who heard the case including the member before whom it is placed.