Between The Lines – Page 27 – Vaish Associates Advocates

Between the Lines | Calcutta High Court: If a challenge is regarding lack of jurisdiction of NCLT under the IBC, writ jurisdiction of High Court can be invoked despite availability of alternative remedy under the IBC

In the case of Kolkata Municipal Corporation and Another v. Union of India and Others (W.P No. 977 of 2020), Calcutta High Court (“CHC”) by its judgement dated January 29, 2021, held that if a challenge is made regarding lack of jurisdiction of National Company Law Tribunal (“NCLT”) under the Insolvency and Bankruptcy Code, 2016 […]

Between the Lines | Supreme Court: If a corporate debtor has only offered security by pledging shares, without undertaking an obligation to discharge the borrower’s liability, then the creditor in such a case will not become ‘financial creditor’ vis-à-vis the corporate debtor as defined under the IBC

The Hon’ble Supreme Court (“SC”) has in its judgment dated February 03, 2021 (“Judgement”), delivered by a three judge bench, in the matter of Phoenix Arc Private Limited v. Ketulbhai Ramubhai Patel [Civil Appeal No.5146 Of 2019], held that if a corporate debtor has only offered security by pledging shares, without undertaking an obligation to […]

Between the Lines | Supreme Court: Related parties cannot be included in the committee of creditors by way of collusive transactions

The Supreme Court (“SC”) has in its judgement dated February 1, 2021 in the matter of Phoenix Arc Private Limited v. Spade Financial Services Limited and Others [Civil Appeal No. 2842 of 2020] (“Judgement”) held that those related party financial creditors that cease to be related parties in order to circumvent their exclusion from the […]

Between the Lines | Telangana High Court: Natural justice principles to be followed before declaring borrower’s account as fraudulent

The Telangana High Court (“THC”) by its judgement dated December 10, 2020 in the matter of Mr. Rajesh Agarwal v. Reserve Bank of India and Others (Writ Petition No: 19102 of 2019) allowed the writ petition filed by a director of a company under Article 226 (Power of High Courts to issue certain writs) of the […]

Between the Lines | NCLAT: Neither the committee of creditors has the power to determine, nor the resolution professional has the power to reclassify the status of a creditor from financial creditor to operational creditor

The National Company Law Appellate Tribunal (“NCLAT”) has in its judgement dated December 18, 2020 (“Judgement”) in the matter of Mr Rajnish Jain v. BVN Traders and Others [Company Appeal (Insolvency) No. 519 of 2020], held that neither the Committee of Creditors (“CoC”) has the power to determine, nor the resolution professional has the power […]

Between the Lines | Supreme Court: Non-payment of stamp duty on the commercial contract does not invalidate the arbitration agreement

The Hon’ble Supreme Court (“SC”) by way of its judgement dated January 11, 2021 in the matter of M/s N.N. Global Mercantile Private Limited v. M/s Indo Unique Flame Limited and Others [Civil Appeal Nos. 3802 – 3803/ 2020 arising out of SLP (Civil) Nos. 13132 – 13133 of 2020)] (“Judgement”) laid down that an […]