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India Gazette
6 days ago
- Business
- India Gazette
NCLAT overrules NCLT: Univastu's resolution plan for Setubandhan gets reconsideration
New Delhi [India], July 10 (ANI): The National Company Law Appellate Tribunal (NCLAT) has overturned a decision passed by the National Company Law Tribunal (NCLT), which had rejected a resolution plan submitted by Univastu India Limited for Setubandhan Infrastructure Ltd. The NCLAT has now directed that the plan be reconsidered. This decision came on the appeals filed by both the Resolution Professional and Univastu India Limited, the Successful Resolution Applicant. The appellate tribunal, led by Justice Ashok Bhushan along with technical members Barun Mitra and Arun Baroka, said that the NCLT went beyond its powers by questioning the commercial decision made by the Committee of Creditors (CoC), which had approved the plan with a strong majority of 98.57 per cent. The NCLT had earlier rejected the plan, citing procedural issues, questions about the value of the plan, and the way dissenting creditors were being treated. However, the NCLAT said that these issues were either clarified during proceedings or were allowed under the Insolvency and Bankruptcy Code (IBC). It also pointed out that some of the objections raised by the NCLT had not been part of the original concerns brought up during the review process. The NCLAT found that the resolution plan had been properly presented to the CoC, that creditor treatment was within legal rules, and that the Resolution Professional had made reasonable efforts to list assets and disclose properties under dispute. It also ruled that there was no need to refer the Resolution Professional's conduct to the Insolvency and Bankruptcy Board of India. In its final remarks, the NCLAT stated that courts should not interfere with decisions made by the CoC unless there is a clear legal issue, and upheld the importance of respecting the CoC's commercial judgment. The appeals have been found to have sufficient merit, and accordingly, the impugned order has been set aside. The Adjudicating Authority is directed to forward the resolution plan submitted by the Successful Resolution Applicant (SRA) to the Committee of Creditors (CoC) for reconsideration, taking into account the queries previously raised on December 17 and 19, 2024. To facilitate this process, the Corporate Insolvency Resolution Process (CIRP) period is extended by 90 days. Additionally, the observations made by the Adjudicating Authority regarding the conduct of the Resolution Professional (RP) are expunged, and no grounds have been found to refer the RP's conduct to the Insolvency and Bankruptcy Board of India (IBBI), NCLAT ordered. (ANI)
Time of India
16-06-2025
- Business
- Time of India
NCLT has powers to direct probe into company's affairs in insolvency matters, says NCLAT
Appellate tribunal NCLAT has clarified that the National Company Law Tribunal ( NCLT ) can order an investigation into the affairs of a company by probe agencies in cases related to the Insolvency & Bankruptcy Code by exercising its power under the Companies Act. The NCLAT order came on May 15 over a plea filed by Max Publicity & Communication which had challenged an NCLT order. The Mumbai bench of NCLT, on January 21, 2025, while rejecting an insolvency plea against Max Publicity & Communication, issued a direction to forward a copy of the order to investigative agencies, including the Serious Fraud Investigation Office (SFIO) and Economic Offences Wing (EOW). by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Unlock full 2025 solar power in Algeria — install, maintain, upgrade Solar Panels | Search Ads Learn More Undo This was challenged before NCLAT by Max Publicity submitting that no opportunity was given to it to have its say on various adverse observations made against it in the impugned order, which was violation of principle of natural justice. The insolvency plea was filed in NCLT by Max Publicity & Communication's operational creditor claiming debt and default. Live Events The NCLAT (National Company Law Appellate Tribunal) in its latest order, however, said that such orders passed by NCLT under section 213 of the Companies Act, for investigations, can be passed only after complying with preconditions. "The Adjudicating Authority, while exercising jurisdiction under Section 9 of the IBC , also exercise jurisdiction of NCLT under the Companies Act, 2013," said the three-member NCLAT bench, which also comprised Chairperson Justice Ashok Bhushan. Under the IBC (Insolvency & Bankruptcy Code), NCLT is termed as the Adjudicating Authority for resolution and liquidation proceedings. "Adjudicating Authority (NCLT) in exercise of powers under Section 213 of the Companies Act, 2013 can direct for investigation, but the said investigation can be directed after complying with the precondition, i.e. affording a reasonable opportunity to the parties concerned," said NCLAT while modifying the NCLT's order. The appellate tribunal further said that NCLT can also exercise its jurisdiction under Rule 11 of the National Company Law Tribunal Rules, 2016, where it is of the view that a copy of the order needs to be forwarded to the relevant statutory authorities for investigations. "The direction under Section 212 to carry out any investigation of the company's affairs by SFIO can be made only in accordance with the statutory provisions of Section 212 and the Adjudicating Authority, while exercising jurisdiction under the Companies Act 2013, cannot issue any direction to SFIO for carrying out investigation," the NCLAT said. Section 212 of the Companies Act says the central government can direct the SFIO for an investigation into the affairs of a company either on receipt of a report of the registrar or inspector, or on intimation of a special resolution passed by a company that its affairs are required to be investigated. It can also be directed in the public interest or on request from any department of the central government or a state government. Section 213 of the Companies Act, 2013, empowers the NCLT to investigate the affairs of a company if there are grounds to suspect fraud, mismanagement, or oppressive acts. The NCLAT modified the January 21 order of NCLT, saying, "Observations and directions made in paragraphs 65 and 66 are not to be treated any direction for carrying out any investigation by the statutory authorities referred to therein." "There was no occasion to make any observation or referring the matter to EoW or SFIO to investigate and reference of EoW and SFIO in paragraph 65 stands deleted. The direction in paragraph 66 to forward the copy of the order to statutory authorities for taking appropriate steps under the Companies Act, 2013 are upheld," it added.
Time of India
03-06-2025
- Business
- Time of India
NCLAT sets aside direction for forensic audit of Golden Tobacco, reinstates Resolution Professional
The Insolvency appellate tribunal NCLAT has set aside the directions of the NCLT for a forensic audit of Golden Tobacco , and a change in the resolution professional of the debt-ridden cigarette maker. Passing an order over a batch of petitions filed against the NCLT order, the National Company Law Appellate Tribunal also extended the timeline for completing the CIRP ( Corporate Insolvency Resolution Process ) of Golden Tobacco till October 17, 2025. Besides, the appellate tribunal has also directed the NCLT to decide over the claims of financial creditors -- Central Bank of India , Arrow Engineering and others and then to reconstitute the lenders' body -- Committee of Creditors (CoC). "The direction of the Adjudicating Authority to conduct a forensic audit by KPMG is set aside," said a two-member bench comprising Chairperson Justice Ashok Bhushan and Member Barun Mitra. Vadodara-based Golden Tobacco owns cigarette brands such as Panama, Chancellor, Golden's Gold Flake and Taj Chhap. It is a Dalmia Group-owned firm. The appellate tribunal also set aside the direction of the NCLT, directing a change in the resolution professional of the company. "Direction contained in the impugned order replacing the Appellant (RP) is set aside. Consequently, the direction to appoint a New Resolution Professional - Sanjay Borad shall come to an end," it said, directing the new Resolution Professional who was allowed to function during the pendency of these appeals shall hand over all the records within seven days. NCLAT was hearing a batch of petitions filed against an order passed by the Ahmedabad bench of the National Company Law Tribunal (NCLT) on May 13, 2024 in which the tribunal had passed several directions. NCLAT in its 86-page-long order also dismissed the petition filed by Suraksha Realty and Sheth Developers , which were seeking the status of a 'secured' Financial Creditor of Golden Tobacco. Both had challenged the order of NCLT passed on May 13, 2024 in this regard. However, it also partially provided relief to Arrow Engineering, another Financial Creditor of the company, whose claim was restricted to Rs 40.75 crore. Suraksha Realty and Sheth Developers have also filed another application seeking direction to remove and reject the claims filed by the Central Bank of India , Arrow Engineering and other Financial Creditors. Moreover, over the Central Bank of India's plea, NCLAT "partly allowed deleting the observation made in the impugned order that the Resolution Professional has inflated the claim of the Central Bank of India." It also dismissed the plea of Shree Ram Vessel Scrap, who could not submit a Resolution Plan by March 2, 2024, which was the last date for submitting a Resolution Plan. NCLAT granted liberty to it "to pursue its pending applications" before the NCLT there. Moreover, the appellate tribunal has also directed to complete the CIRP (Corporate Insolvency Resolution Process) within a period of two months after the decision on the claims filed by its financial creditors - Central Bank of India, Arrow Engineering and others Financial creditors. "The Resolution Professional after the decision of the Adjudicating Authority... shall reconstitute the CoC and convene a meeting for consideration of the Resolution Plans, in accordance with law," said a two-member bench. NLCAT further extended the period for completion of CIRP till October 17, 2025. "The period from 21.05.2024 till date is excluded from the CIRP process, during which period the interim order passed in the appeal has operated. CIRP period is extended till 17.10.2025 during which the entire CIRP process shall be completed," it said. CIRP was commenced against Golden Tobacco on June 7, 2022, by NCLT after admitting the Section 7 application filed by Arrow Engineering.
Time of India
02-06-2025
- Business
- Time of India
NCLAT Overturns NCLT Forensic Audit Order for Golden Tobacco, Extends CIRP Deadline to 2025, ET LegalWorld
The Insolvency appellate tribunal NCLAT has set aside the directions of the NCLT for a forensic audit of Golden Tobacco, and a change in the resolution professional of the debt-ridden cigarette maker. Passing an order over a batch of petitions filed against the NCLT order, the National Company Law Appellate Tribunal also extended the timeline for completing the CIRP (Corporate Insolvency Resolution Process) of Golden Tobacco till October 17, 2025. Besides, the appellate tribunal has also directed the NCLT to decide over the claims of financial creditors -- Central Bank of India, Arrow Engineering and others and then to reconstitute the lenders' body -- Committee of Creditors (CoC). Advt Advt "The direction of the Adjudicating Authority to conduct a forensic audit by KPMG is set aside," said a two-member bench comprising Chairperson Justice Ashok Bhushan and Member Barun Golden Tobacco owns cigarette brands such as Panama, Chancellor, Golden's Gold Flake and Taj Chhap. It is a Dalmia Group-owned appellate tribunal also set aside the direction of the NCLT, directing a change in the resolution professional of the company."Direction contained in the impugned order replacing the Appellant (RP) is set aside. Consequently, the direction to appoint a New Resolution Professional - Sanjay Borad shall come to an end," it said, directing the new Resolution Professional who was allowed to function during the pendency of these appeals shall hand over all the records within seven was hearing a batch of petitions filed against an order passed by the Ahmedabad bench of the National Company Law Tribunal (NCLT) on May 13, 2024 in which the tribunal had passed several in its 86-page-long order also dismissed the petition filed by Suraksha Realty and Sheth Developers, which were seeking the status of a 'secured' Financial Creditor of Golden had challenged the order of NCLT passed on May 13, 2024 in this it also partially provided relief to Arrow Engineering, another Financial Creditor of the company, whose claim was restricted to Rs 40.75 Realty and Sheth Developers have also filed another application seeking direction to remove and reject the claims filed by the Central Bank of India, Arrow Engineering and other Financial over the Central Bank of India's plea, NCLAT "partly allowed deleting the observation made in the impugned order that the Resolution Professional has inflated the claim of the Central Bank of India."It also dismissed the plea of Shree Ram Vessel Scrap, who could not submit a Resolution Plan by March 2, 2024, which was the last date for submitting a Resolution Plan. NCLAT granted liberty to it "to pursue its pending applications" before the NCLT the appellate tribunal has also directed to complete the CIRP (Corporate Insolvency Resolution Process) within a period of two months after the decision on the claims filed by its financial creditors - Central Bank of India, Arrow Engineering and others Financial creditors."The Resolution Professional after the decision of the Adjudicating Authority... shall reconstitute the CoC and convene a meeting for consideration of the Resolution Plans, in accordance with law," said a two-member further extended the period for completion of CIRP till October 17, 2025."The period from 21.05.2024 till date is excluded from the CIRP process, during which period the interim order passed in the appeal has operated. CIRP period is extended till 17.10.2025 during which the entire CIRP process shall be completed," it was commenced against Golden Tobacco on June 7, 2022, by NCLT after admitting the Section 7 application filed by Arrow Engineering. Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETLegalWorld App Get Realtime updates Save your favourite articles Scan to download App
Time of India
02-06-2025
- Business
- Time of India
NCLAT sets aside direction for forensic audit of Golden Tobacco, reinstates Resolution Professional
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel The Insolvency appellate tribunal NCLAT has set aside the directions of the NCLT for a forensic audit of Golden Tobacco , and a change in the resolution professional of the debt-ridden cigarette an order over a batch of petitions filed against the NCLT order, the National Company Law Appellate Tribunal also extended the timeline for completing the CIRP ( Corporate Insolvency Resolution Process ) of Golden Tobacco till October 17, the appellate tribunal has also directed the NCLT to decide over the claims of financial creditors -- Central Bank of India , Arrow Engineering and others and then to reconstitute the lenders' body -- Committee of Creditors (CoC)."The direction of the Adjudicating Authority to conduct a forensic audit by KPMG is set aside," said a two-member bench comprising Chairperson Justice Ashok Bhushan and Member Barun Golden Tobacco owns cigarette brands such as Panama, Chancellor, Golden's Gold Flake and Taj Chhap. It is a Dalmia Group-owned appellate tribunal also set aside the direction of the NCLT, directing a change in the resolution professional of the company."Direction contained in the impugned order replacing the Appellant (RP) is set aside. Consequently, the direction to appoint a New Resolution Professional - Sanjay Borad shall come to an end," it said, directing the new Resolution Professional who was allowed to function during the pendency of these appeals shall hand over all the records within seven was hearing a batch of petitions filed against an order passed by the Ahmedabad bench of the National Company Law Tribunal (NCLT) on May 13, 2024 in which the tribunal had passed several in its 86-page-long order also dismissed the petition filed by Suraksha Realty and Sheth Developers , which were seeking the status of a 'secured' Financial Creditor of Golden had challenged the order of NCLT passed on May 13, 2024 in this it also partially provided relief to Arrow Engineering, another Financial Creditor of the company, whose claim was restricted to Rs 40.75 Realty and Sheth Developers have also filed another application seeking direction to remove and reject the claims filed by the Central Bank of India , Arrow Engineering and other Financial over the Central Bank of India's plea, NCLAT "partly allowed deleting the observation made in the impugned order that the Resolution Professional has inflated the claim of the Central Bank of India."It also dismissed the plea of Shree Ram Vessel Scrap, who could not submit a Resolution Plan by March 2, 2024, which was the last date for submitting a Resolution Plan. NCLAT granted liberty to it "to pursue its pending applications" before the NCLT the appellate tribunal has also directed to complete the CIRP (Corporate Insolvency Resolution Process) within a period of two months after the decision on the claims filed by its financial creditors - Central Bank of India, Arrow Engineering and others Financial creditors."The Resolution Professional after the decision of the Adjudicating Authority... shall reconstitute the CoC and convene a meeting for consideration of the Resolution Plans, in accordance with law," said a two-member further extended the period for completion of CIRP till October 17, 2025."The period from 21.05.2024 till date is excluded from the CIRP process, during which period the interim order passed in the appeal has operated. CIRP period is extended till 17.10.2025 during which the entire CIRP process shall be completed," it was commenced against Golden Tobacco on June 7, 2022, by NCLT after admitting the Section 7 application filed by Arrow Engineering.
