SERI CASE NAME FACTS/ISSUE
AL
NO.
1. Bank of New The Respondent, Zenith Infotech
York Mellon, (Corporate Debtor) filed an
London V. application for registration of
Zenith Infotech reference to Board for Industrial and
Ltd. Financial Reconstruction(BIFR)
under Sec:5 of Sick Industrial
Companies Act. Meanwhile an
application to wind up the same
company was admitted by the
Bombay HC and such order of
admission was supported by a
Division Bench on appeal.
The orders of the Secretary and
Chairman of the Board rejecting the
application for Reference filed by
the Debtor Company was challenged
in a writ petition filed before the
Delhi High Court. Two questions
arose before the High Court of Delhi
in the writ petition.
The first was whether the dismissal
of the application for Reference by
the Registrar, Secretary and
Chairman of the Board was within
the jurisdiction of the said
authorities. The second question was
that, if the previous question was
answered in positive, whether in
view of the order of winding up, as
affirmed by the Division Bench,
there was any further scope for
registration of the Reference sought
for by the Debtor Company under
the provisions of the SICA.
The High Court, by the impugned
order, observed that under the
provisions of the SICA read with the
DECISION
The SC held that the “scrutiny”
power vested in the authorities cannot
be used for adjudication the question
as to whether a company is an
industrial company within the
meaning of Sec: 3(e) read with 3(f)
and 3(n) of the SICA.. The reference
was thus deemed to be pending
before the Board on the relevant date
attracting the provisions of Sec: 252
of the Insolvency and Bankruptcy
Code.
The second question regarding
whether the reference before the
Board stood foreclosed by the order
of winding up was not looked into by
the Court as it became redundant in
view of the conclusion that the
reference sought by the Debtor
Company was deemed to have been
pending on the date of
commencement of the Insolvency and
Bankruptcy Code, particularly, Sec:
252 thereof.
Nevertheless, the Court observed that
it did not look into the scope and
meaning of the said or any other
provisions of the Code and declared
the NCLT to be free to decide on the
said questions in such manner as
required. The Appeal was thus,
disposed of.
 Regulations, the Registrar and the
other authorities like the Secretary
and the Chairman of the Board have
not been conferred any power of
adjudication which would
necessarily be involved in
determining the question as to
whether the Debtor company is an
“industrial company” within the
meaning of Secs: 3(e) and 3(f) of the
SICA. Regarding the second
question, the High Court of
Delhiame to the conclusion that the
winding up order passed by the
Company Court would not foreclose
the proceedings under the SICA and
registration of a Reference under
Sec: 15 and the inquiry under Sec:
16 can still be made. The same
questions had agitated the appeal
before the Supreme Court.
2. Alchemist After admission of application of the The Supreme Court held that it is the
asset Financial Creditor by the NCLT mandate of the Insolvency and
Reconstruction Principal Bench Delhi (NCLT) and Bankruptcy Code 2016 that once a
Company Ltd. commencement of moratorium moratorium is issued under Section
V Hotel under Section 14 (a) of the Code, the 14 of the Code, it interdicts the
Gaudvan Pvt. Respondent 1 instituted arbitration institution or continuation of pending
Ltd. proceedings with Respondent 2. The suits against the Corporate Debtor.
NCLT by an order dated 31.05.2017, The Supreme Court set aside the
held that given the moratorium is order dated 6.07.2017 and stated that
imposed no arbitration proceeding arbitration that has been instituted
could go on. after the moratorium is Non-Est in
law. The Supreme Court also quashed
A first appeal was filed before the the criminal proceedings instituted
District Judge Jaisalmer, Rajasthan against the IRP intended to
under Section 37 of the Arbitration discontinue the proceedings and
and Conciliation Act 1996 and by an allowed the appeal.
order dated 6.07.2017, the appeal
was asked to be registered and
notice was issued awaiting a reply.
3. Impex Ferro The SLP was filed by Impex Ferro The Apex Court looked into the terms
Tech Ltd V Tech Limited (Corporate Debtor) of settlement entered into by the
Agarwal Coal against the order passed by NCLT parties and decided to utilize its
Corporation (Kolkata). By the said order, the inherent power under Article 142 of
Pvt. Ltd. Operational Creditor’s application the Constitution of India. The Special
was accepted by the tribunal. The Leave Petition was thus disposed of
Debtor had argued that there was a by substituting the order of the NCLT
dispute pertaining to the quality of and allowing the parties to settle the
steam coals supplied. However, the debts.
NCLT found that the ‘dispute’ so
contended, does not qualify under
the provisions of IBC. The
Application filed was thus admitted.
An aggrieved Debtor approached the
Hon’ble Apex Court by means of a
Special Leave Petition seeking to
quash the NCLT’s order.
4. Anax The Operational Creditor was The Supreme Court observed that the
Industries Pvt. engaged in the business of shipping parties had since settled the matter in
Ltd V C.H. consignments within and outside view of a Settlement agreement dated
Robinson India. The Corporate Debtor had 12.02.2018. The Settlement
Worldwide approached the Operational Creditor agreement was taken on record. The
Freight India to ship consignment outside India. Supreme Court in exercise of its
Pvt. Ltd The Operational Creditor had powers under Article 142 of the
shipped the consignments as per the Constitution of India, accepted the
Corporate Debtor’s specifications. settlement and set-aside the order of
Many invoices were raised and the NCLT, Chennai Bench. The
running account was also maintained Supreme Court stated that all pending
by the Operational Creditor. The applications, if any, shall stand
Corporate Debtor had made only disposed of.
part-payment towards the invoices.
The Corporate Debtor had also
admitted to the outstanding amount
through their letter. The Operational
Creditor alleged that the outstanding
amount was not liquidated despite
various requests and reminders. The
Operational Creditor thereby issued
a Demand-notice which was not
 replied to, by the Corporate Debtor.
Subsequently, the Operational
Creditor had filed an application
under Section 9 of the Code before
NCLT, Chennai. the Corporate
Debtor neither filed any counter, nor
replied to the Demand Notice and
also did not appear before the
Tribunal. So, NCLT admitted the
application and declared the
moratorium.
Subsequently, the parties filed an
appeal before the Supreme Court
stating that the matter had been
settled between them by means of a
Settlement Agreement .
5. Ankit Metal The parties filed an appeal before
and Power Ltd the Hon’ble SC for withdrawal of
V. Gandhar Oil admitted-application made by the
Refinery Operational-Creditor( Gandhar oil-
(India) Ltd. refinery ltd.) for recovering dues
under an agreement for the supply of
coal to the Corporate-Debtor, citing
successful settlement.
6. Gaurav Vinod he Operational Creditor had entered
Goel V. Inox into a Liquid supply agreement and
Air Products Equipment license agreement with
Pvt. Ltd. the Corporate Debtor for supply of
oxygen, liquid nitrogen and argon
etc. With regard to the Liquid supply
agreement, the Corporate Debtor
had an outstanding payment to be
made and with regard the Equipment
License agreement, the payments
were duly made. Meanwhile the
parties entered into a consolidated
The Supreme Court observed that the
parties had since settled the matter in
view of a Settlement agreement .The
Settlement agreement was taken on
record. The Supreme Court in
exercise of its powers under Article
142 of the Constitution of India,
accepted the settlement and set-aside
the order of the NCLT, Kolkata
Bench. The Supreme Court stated
that all pending applications, if any,
shall stand disposed of.
The Supreme Court observed that the
parties had since settled the matter in
view of a Settlement agreement .The
Settlement agreement was taken on
record. The Supreme Court in
exercise of its powers under Article
142 of the Constitution of India,
accepted the settlement and set-aside
the order of the NCLT. The Supreme
Court stated that all pending
applications, if any, shall stand
disposed of.
 agreement to supply products to two
different places. The Corporate
Debtor subsequently defaulted
payment of the invoices. The
Corporate Debtor had acknowledged
the debt through an electronic mail
wherein it undertook to pay the dues
as per the agreement. After various
requests the Corporate Debtor issued
a cheque which was dishonored.
Subsequently, the Operational
Creditor filed a case under the
Negotiable Instruments Act, 1881
before the competent Court. The
Operational Creditor then issued a
Demand Notice under Section 8 of
the Code to initiate Insolvency
proceedings. The Corporate Debtor
failed to respond to the notice issued
by the Operational Creditor within
the prescribed time limit of 10 days.
The Operational Creditor thereby,
filed an application under Section 9
of the Code. he Adjudicating
authority after the whole sequel had
admitted the application and
appointed an IRP.
Subsequently, the parties filed an
appeal before the Supreme Court
stating that the matter had been
settled between them by means of a
Settlement Agreement .
7. Alchemist In this case, NCLT had admitted a The Supreme Court held that it is the
Asset petition filed under the Code as a mandate of the Insolvency and
Reconstruction result of which moratorium was Bankruptcy Code 2016 that once a
Co. Ltd. V. imposed under Section 14 of the moratorium is issued under Section
Hotel Gaudvan Code. While the moratorium was in 14 of the Code, it interdicts the
Pvt. Ltd. force, a letter was issued by institution or continuation of pending
Respondent No. 1 to Respondent suits against the Corporate Debtor.
No. 2 for invocation of arbitration The Supreme Court set aside the
 clause between the parties. In order and stated that arbitration that
another order, the NCLT stated that has been instituted after the
no arbitration proceedings could moratorium is Non-Est in law. The
continue when a moratorium has Supreme Court also quashed the
been imposed. criminal proceedings instituted
On appeal under section 37 of the against the IRP intended to
Arbitration and Conciliation Act, discontinue the proceedings and
1996 an order was passed by the allowed the appeal.
District Judge directing the
registration of the appeal and for
issuance of notices.

8. Mothers Pride The Operational Creditor (Portrait The Hon’ble Supreme Court Bench
Dairy India Advertising & Marketing Pvt. Ltd.) stated
Pvt. Ltd. V had initially filed an application for “ Though we find that the order
Portrait the initiation of the Corporate passed by the National Company
Advertising Insolvency Resolution Process Law Appellate Tribunal is correct,
and Marketing against the Corporate Debtor yet we think it is a fit case to exercise
Pvt. Ltd. (Mothers Pride Dairy India Pvt. power under Article 142 of the
Ltd.) under Section 9 of the IBC in Constitution and accept the
the NCLT (Principle Bench) at New settlement that has been entered into
Delhi for recovering dues towards between the parties. As we are
marketing and advertising services accepting the settlement, the
undertaken for the Debtor. On notice proceeding pending before the
of application being served, the National Company Law Tribunal,
Debtor replied claiming that several stands disposed of.”
vital facts had been suppressed in
the application to the NCLT. The
NCLT (Principal Bench) found no
merit in the claims of the Debtor and
admitted the application and CIRP
was initiated.
The Corporate Debtor preferred an
appeal to the NCLAT on 13/07/2017
under Section 61 of the IBC for
withdrawal of the application on the
grounds that negotiations for a
settlement were being undertaken
 between the parties. The NCLAT
stated that it was not sufficient
grounds to interfere with the order.
The Operational Creditor further
stated that the dispute had been
settled and settlement was received.
The NCLAT however, did not allow
the appeal stating that once the
application was admitted, there
could be no withdrawal, not even by
the Creditor himself. The Corporate
Debtor has filed this appeal before
the Hon’ble Supreme Court.

9. Lokhandwala The financial creditor, Nisus The Supreme Court held that , neither
Kataria Finance and Investment Managers, NCLT nor NCLAT have power to
Construction LLP, filed an insolvency application order withdrawal of an application,
Pvt. Ltd. vs. under section 7 of the Code before on the basis of compromise between
Nisus Finance the National Company Law the parties, which has once been
& Investment Tribunal, Mumbai Bench (“NCLT”) admitted. However, Hon’ble
Mangaer LLP against Supreme Court of India can permit
the corporate debtor, okhandwala withdrawal of such application.
Kataria onstruction Limited. The The Hon’ble Supreme Court granted
application was admitted by the withdrawal and disposed of the
NCLT; however, subsequently the proceedings.
parties settled the matter between
themselves. On that ground, the
parties approached the National
Company Law Appellate Tribunal
(“NCLAT”) with a prayer to set
aside the decision of the NCLT since
the dispute was now settled. NCLAT
held that application cannot be
withdrawn. An appeal was filed in
Supreme Court.

10. Impex Ferro The SLP was filed by Impex Ferro The Apex Court looked into the terms
Tech Ltd. V Tech Limited (Corporate Debtor) of settlement entered into by the
Agarwal Coal against the order passed by NCLT
parties and decided to utilize its
 Corporation (Kolkata). By the said order, the inherent power under Article 142 of
Pvt. Ltd. Operational Creditor’s application the Constitution of India. The Special
was accepted by the tribunal. The
Leave Petition was thus disposed of
Debtor had argued that there was a
by substituting the order of the NCLT
dispute pertaining to the quality of
steam coals supplied. However, the and allowing the parties to settle the
NCLT found that the ‘dispute’ so debts.
contended, does not qualify under
the provisions of IBC. The
Application filed was thus admitted.
An aggrieved Debtor approached the
Hon’ble Apex Court by means of a
Special Leave Petition seeking to
quash the NCLT’s order.
11. Neelkanth An insolvency proceedings was filed The Apex court held that they do not
Township and by Urban Infrastructure Trustees find any reason to interfere with the
Construction Limited (“Urban order passed by the NCLAT. The
Pvt. Ltd. vs. Infrastructure”)against Neelkanth Court also stated that there was no
Urban Township and Construction Pvt. Ltd. merit in the appeal. Accordingly, the
Infrastructure (“Neelkanth”) before the National appeal was dismissed keeping the
Trustees Ltd Company Law Tribunal, Mumbai question as to whether the Limitation
(“NCLT Mumbai”) alleging that Act would apply open.
Neelkanth defaulted in making
payments under debenture
certificates issued by it, on the date
of maturity mentioned in the
debenture certificates.
The NCLT Mumbai proceeded to
admit the insolvency resolution
application filed by the Urban
Infrastructure, and declared a
moratorium.
Neelkanth challenged the order of
the NCLT Mumbai before the
NCLAT on various grounds
,including that the alleged debt of
Urban infrastructure was barred by
time. NCLAT dismissed the appeal.
An appeal was then filed in Supreme
Court.
12. Mobilox
Kirusa issued a demand notice to The Supreme Court held that once an
innovation Pvt.
Mobilox as an Operational Creditor operational creditor has filed an
Ltd. V Kirusa under the Code, demanding payment Application, which is otherwise
Software Pvt.
of certain dues. Mobilox issued a procedurally complete, the
Ltd.
reply to the demand notice Adjudicating Authority has to
(“Mobilox Reply”) inter alia stating consider the following;
that there exists certain serious
1. Whether there is an “operational
and bona fide disputes between the
debt”, as defined under the Code,
parties and alleged a breach of the
which exceeds INR 100,000;
terms of a non-disclosure agreement
2. Whether the documentary evidence
by Kirusa. Kirusa filed an
furnished with the application
application under Section 9 of the
shows that the aforesaid debt is due
Code (“Application”) before the
and payable and has not yet been
National Company Law Tribunal,
paid; and
Mumbai (“NCLT”) for initiation of
the corporate insolvency resolution 3. Whether there is existence of a
process (“CIRP”) against Mobilox. dispute between the parties or the
This was dismissed by the NCLT, record of the pendency of a suit or
which expanded the scope of an arbitration proceeding filed before
‘existing dispute’ under the Code to the receipt of the demand notice of
hold that a valid notice of dispute the unpaid operational debt in
had been issued by Mobilox. relation to such dispute;

Kirusa filed an appeal before the
National Company Law Appellate
Tribunal (“NCLAT”), which
allowed Kirusa’s appeal and inter
alia, held that the notice of dispute
does not reveal a genuine dispute
between the parties. Mobilox filed
an appeal before the Supreme Court
impugning the order of the NCLAT.
While determining the third point
above, the Supreme Court stated that
all that the Adjudicating Authority
must see is whether there is a
plausible contention which requires
further investigation and that the
“dispute” is not a patently feeble
argument or an assertion of fact
unsupported by evidence.
Interestingly, while the Court was of
the view that it is important to
separate the grain from the chaff and
to reject a spurious defense which is
mere bluster, it held that the
Adjudicating Authority need not go
into the merits and satisfy itself that
the defense is likely to succeed at this

13. Macquarie The Supreme Court dealt with three
Bank Limited appeals together and the facts
vs. Shilpi contained in the three appeals were
Cable also similar. In one illustrative case,
Technologies Hamera International Private
Limited (“Hamera International”)
had executed an agreement with
Macquarie Bank Limited, Singapore
(“Macquarie Bank”), by which the
Macquarie Bank purchased the
original supplier’s right, title and
interest in a supply agreement.
Certain amounts became due from
the Respondent, Shilpi Cable
Technologies Ltd. (“Shilpi Cable”)
to Macquarie Bank, which gave rise
to the present dispute. Macquarie
Bank issued a demand notice
through their Advocates under
Section 8 of the Code, following
which it initiated Corporate
Insolvency Resolution Process
(“CIRP”) by filing a petition under
Section 9 of the Code. The NCLT
held that Application sought to be
rejected because Section 9(3)(c) of
the Code was not complied with, as
Macquarie Bank had failed to
submit a certificate from a financial
institution as required by the
provision; and second, that the
existence of the debt was disputed
by Shilpi Cable in its reply to an
earlier statutory notice sent by
stage of the proceeding.
Basis the above, the Supreme Court
allowed the appeal and set aside the
order of the NCLAT.
The Hon'ble Supreme Court observed
that a creative interpretation of
Section 9(3)(c) is necessary in the
present case as the literal
interpretation would be unreasonable
and would create hardships for
Appellants and other foreign banks in
the future. Also, the requirement of
certificate as a document is not
necessary for substantiating the
existence of default as it can be
proved by other documents as well.
Also, in such cases where such
certificates are impossible to furnish,
serious inconvenience will be caused
to the innocent persons like Appellant
when such requirements are not even
necessary to further the object of the
Act. While dealing with the other
issue related to whether a lawyer can
issue a demand notice on behalf of
the Creditor, the Hon'ble Supreme
Court read sections 8 and 9 of the IB
Code conjointly along with Section
30 of the Advocates Act which talks
about the Right of the Advocates to
practice. The Hon'ble Supreme Court
relied upon the judgment of "Byram
Pestonji Gariwala v. Union Bank of
India"2 where a signature affected by
the lawyer on behalf of his client on a
document related to a compromise
was held to be effective in law. It was
observed in the judgment that "the
 Macquarie Bank under Sections 433
and 434 of the Companies Act,
1956, making the application liable
to be rejected under Section 9(5)(ii)
of the Code. An appeal was filed in
NCLAT , which was also dismissed.
Then an appeal was filed in Supreme
Court.
14. Surendra The Operational Creditor applied
Trading before the NCLT subsequent to the
Company commencement of IBC. The
Ltd.V JK Jute Creditor had sent a Demand Notice
Mills seeking payment of the outstanding
Company dues. Upon failure to do the same, it
Limited applied before NCLT (Allahabad).
The registry of the adjudicating
authority pointed out some
procedural defects in the application
and the adjudicating authority
granted time for removal of such
defects.
After removal of the procedural
defects, the appellant sought for
some time for filing the formal
memo by proving/furnishing the
latest order passed by the BIFR
before the Code came into effect.
Meanwhile, one, JK Jute Mill
Mazdoor Morcha Kanpur, moved an
application seeking intervention in
the matter. The Adjudicating
courts in India have consistently
realized the role of lawyer when it
comes to disputes and the extent and
nature of the implied authority to act
on behalf of their clients, which
included compromising matters on
behalf of their clients. The Court held
there is no reason to assume that the
legislature intended to curtail such
implied authority of counsel."
Therefore, the decision of the NCLT
and NCLAT was overruled by the
Hon'ble Supreme Court and the
matter was remanded back for
consideration.
The Supreme Court held that it
couldn’t find any valid rationale in
the conclusion of NCLAT that seven
days time period is mandatory. It
further observed that the time period
of 180 days given in the Code for
completion of the resolution process
cannot be a valid ground to justify the
conclusion of NCLAT because the
period of 180 days commence from
the date of admission of application.
Period prior to that, such as time
consumed for scrutinising the
application, rectifying defects in the
application or NCLT admitting the
application etc. cannot be taken into
account. In fact, till the objections are
removed, it is not to be treated as
application validly filed. Only after
the application is complete in every
respect, the same is required to be
entertained. The Court observed that
in a given case there might be
 Authority passed an interim order
directing the Corporate Debtor to
maintain status quo in respect of its
immovable property until further
orders.
The interim order of the
Adjudicating Authority was
challenged by the Corporate Debtor
before the NCLAT contending that
the Adjudicating Authority becomes
“functus officio” after the time
specified under Sec: 9 of the Code
and it has no power to grant the stay
of the sale of assets or status quo in
regard to any assets. The NCLAT
held that the period of fourteen days
prescribed for the Adjudicating
Authority to pass an order is
directory in nature and whereas the
period of seven days given to the
Creditor for rectifying the defects is
mandatory in nature. For the
aforesaid reasons, the NCLAT
directed the rejection of the
application by the operational
creditor for not rectifying the defects
in the application within the seven-
day period. The decision of the
NCLAT was challenged by the
operational creditor before the
Supreme Court.
Similar submissions were made
before the Supreme Court as well.
The question before the Supreme
Court is whether the period of seven
days for rectifying the defects is
mandatory or directory.
15. Chitra Sharma The Allahabad Bench of the The Supreme Court in its judgement
weighty, valid and justifiable reasons
for not able to remove the defects
within seven days. Accordingly, the
Court held that provision of removing
the defects within seven days is
directory and not mandatory in
nature.To avoid misuse, the
Honorable Court directed that a
balance approach need to be taken
while considering any request for
extension of time. If the objections
are not removed within seven days,
the applicant while refilling the
application after removing the
objections, file an application in
writing showing sufficient cause as to
why the applicant could not remove
the objections within seven days.
Once the NCLT is satisfied with the
cause it can entertain the application;
otherwise, the application needs to be
rejected.
The Apex Court set aside a
particular portion of the NCLAT
order by declaring the 7 days’
rectification period prescribed under
IBC to be directory in nature.
and Others V National Company Law Tribunal,
Union of India Allahabad (NCLT) admitted a
petition filed by IDBI Bank Limited
(IDBI Bank) under the IBC to
initiate CIRP with respect to Jaypee
Infratech Limited (JIL), upon the
latter’s default in repayment of
dues.[3] The NCLT vide its order
August 09, 2017 commenced CIRP
against JIL, whereby it imposed a
moratorium which prohibited the
institution or continuation of any
suits or proceedings against JIL. In
accordance with provisions of the
IBC, an Interim Resolution
Professional (IRP) was appointed.
Aggrieved by the NCLT’s Order,
various homebuyers who had
invested their money in numerous
residential projects of JIL and its
parent company Jaiprakash
Associates Limited (JAL) came
before the Supreme Court by way of
multiple Writ Petitions and Special
Leave Petitions.
passed certain significant directions,
in effect re-commencing the CIRP. In
order to do justice to the interests of
all the concerned stakeholders in the
CIRP of JIL, and to prevent it from
going into liquidation, the Supreme
Court directed that the initial period
of 180 days be revived with effect
from August 09, 2018 (extendable by
a further period of 90 days under the
provisions of IBC, if required), and a
new CoC be constituted in
accordance with the amended
provisions of the IBC to enforce the
statutory status of the homebuyers as
financial creditors.
The Supreme Court has also directed
that the IRP would have the option of
inviting fresh bids so that there is a
wider field of choice provided to the
CoC, and in this entire process JIL
and JAL along with their promoters
would remain ineligible to participate
in the CIRP in light of the bar under
Section 29A of the IBC. The Court
also acceded to the request of the RBI
to initiate CIRP against JAL in order
to address the financial distress of
JAL. The money deposited by the
JAL is to be transferred to NCLT to
take an appropriate decision with
regard to the same.
The apex court further restricted the
owners of Jaypee group to not to
alienate their properties. Supreme
Court through such an order has lifted
the veil of Jaypee group by holding it
accountable for the works of its

16. BK A dispute regarding liability arose
Educational between Parag Gupta & Associates,
Services chartered accountants (the financial
Private creditors) and BK Educational
Limited v Services Private Limited (the
Parag Gupta corporate debtor). The corporate
and Associates debtor, while denying the financial
liability, contended that all but one
financial claim were false and that
the records were tampered and
manipulated by the relatives of the
financial creditors. Further, the
amounts claimed were time-barred
and there was nothing on record that
would extend the limitation to
recover the amount since the period
was between 2012 and 2013.NCLT
held that documents submitted were
not justifiable for the purpose of
extending the limitation and
therefore the claim amounts were
not legally recoverable except one
from 2015.
The order was challenged before
NCLAT by the financial creditors
and NCLAT held that the Limitation
Act provisions were not applicable
for the commencement of the
corporate insolvency resolution
subsidiaries and it also moved
beyond the principle of Limited
Liability. It has asked the Insolvency
Resolution professional Anup Jain to
submit resolution plan within 45
days, to which IRP has asked entities
and companies to invest in the
infrastructure project.
On appeal, while setting aside the
NCLAT order, the Supreme Court
held that an application filed after the
IBC came into force in 2016 cannot
revive a debt which is no longer due
as it is time-barred. The expression
“debt due” in the definition sections
of IBC mean debts that are “due and
payable” in law, i.e., the debts that
are not time-barred. Since the
Limitation Act is applicable to
applications filed under sections 7
and 9 of the IBC from inception,
article 137 of the Limitation Act is
evoked, which provides the period of
limitation in case of “any other
application for which no period of
limitation is provided elsewhere” as
three years from the time when the
right to apply accrues.
“The right to sue”, therefore, accrues
when a default occurs. If the default
has occurred over three years prior to
the date of filing of the application,
the application would be barred under
article 137 of the Limitation Act,
save and except in those cases where,
on the facts of the case, section 5 of
the Limitation Act may be applied to
 process under the IBC and further condone the delay in filing such
passed the order to accept the applications.
application for initiation.
An appeal was filed in Supreme
Court.
17. K Kishan vs. It all began when the parties
Vijay Nirman arbitrated their disputes arising out
Company Pvt of a construction agreement. In the
Ltd arbitral award, the claim of the
respondent in the present appeal
with respect to a certain amount was
allowed. The appellant’s cross claim
of a much higher amount was not
allowed. Now, two events unfolded
following this award. First, the
respondent sent a demand notice of
unpaid operational debt under
section 8 of the IBC to the appellant.
Second, the appellant responded
with a notice of dispute with respect
to the debt and challenged the
arbitral award under section 34 of
the Arbitration Act.
Notwithstanding the receipt of
notice of dispute from the appellant, demonstrated to the court that the
the respondent filed an application
for admission of insolvency
proceedings against the appellant.
Both the NCLT and the National
Company Law Appellate Tribunal
(“NCLAT”) allowed the admission.
The NCLAT reasoned that the non-
obstante clause in section 238 of the process under the Code may then be
IBC would override the Arbitration
Act, and that a challenge of an
award under section 34 of the
Arbitration Act would not constitute
Supreme Court observed that filing of
Section 34 (Arbitration) petition
against an arbitral award shows a pre-
existing dispute which culminates at
the first stage of the proceedings in
an award continues even after the
award, at least till the final
adjudicatory process under Sections
34 and 37 of the Arbitration Act has
taken place.
Hon’ble Supreme Court also dealt
with different situation under which
an appeal u/s.34 of Arbitration Act
may be and its consequence under the
Code as under:
(i) Where a Section 34 petition
challenging an arbitral award may
clearly and unequivocally be barred
by limitation, in that it can be
period of 90 days plus the
discretionary period of 30 days has
clearly expired, after which either no
petition under Section 34 has been
filed or a belated petition under
Section 34 has been filed. It is only in
such clear cases that the insolvency
put into operation.
(ii) In cases where a Section 34
petition may have been instituted in
 a dispute under section 9 of the IBC. the wrong court, as a result of which
the petitioner may claim the
application of Section 14 of the
Limitation Act to get over the bar of
limitation laid down in Section 34(3)
of the Arbitration Act, the insolvency
process under the Code cannot be put
into operation without an
adjudication on the applicability of
Section 14 of the Limitation Act.

Further, the bench disagreed with the

view of NCLAT that Section 238 of
the Code overrides Arbitration Act. It
said Section 238 of the Code would
apply in case there is an
inconsistency between the Code and
the Arbitration Act. In the present
case, no such inconsistency is
observed. On the contrary, the Award
passed under the Arbitration Act
together with the steps taken for its
challenge would only make it clear
that the operational debt, in the
present case, happens to be a disputed
one.

18. Commissioner This Petition was filed by the The Supreme court referred to Dena
of Income Tax Petitioner (Commissioner of Bank v. Bhikhabhai Prabhudas
V. Monnet Income Tax) against the Parekh and Co. & Ors., and made it
Ispat and Respondent (Monnet Ispat and clear that income-tax dues, being in
Energy Ltd. Energy Ltd.). the nature of Crown Debts, do not
Under Section 238 of IBC, the take precedence over secured
Provisions of IBC shall have creditors, who are private persons.
effect, notwithstanding anything The Supreme Court was thus of the
inconsistent therewith contained in view that the High Court of Delhi is
any other law for the time being in correct in law. The Special Leave
force or any instrument having Petition was dismissed and order
effect by virtue of any such law. was passed to dispose any other
 Thus, given Section 238 of IBC,
the Code will override anything
inconsistent contained in any other
enactment, including the Income-
Tax Act.
19. Innoventive The Corporate Debtor appealed
Industries Ltd against the order of the NCLAT
V. ICICI Bank holding that IBC will prevail over
and Anr. the State Act.
pending petitions.
The Supreme Court held that the
State Law is repugnant to Central
enactment because if State Law is
given effect then the scheme or plan
adopted by the Parliament will be
hindered. The Supreme Court also
made the following observations:
1. Concept of Default under the
Code
The Supreme Court made a detailed
analysis of the provisions of the
Code. The Court observed that in the
case of Corporate Debtor who has
committed a default of a financial
debt, the financial creditor has to
satisfy that the default has occurred
whether or not such debt is disputed
so long as the debt is due i.e. payable
unless interdicted by some law or has
not become due in the sense that it is
payable at a future date.
2. Right of Erstwhile Directors to file
appeal
In the present case, the appeal was
filed by the directors of the Corporate
Debtor after corporate insolvency
process was ordered by the NCLT
and consequently upheld by the
NCLT. The Supreme Court held that
once an insolvency professional is
appointed, the erstwhile directors
who are not in the control cannot
maintain an appeal on behalf of the
company.

3. Scope of hearing to be given to the

Corporate Debtor

The Appellant/Corporate Debtor filed

a second application before the
NCLT contending that there was a
Master Restructuring Agreement
(MRA) between all the creditors and
debtors including the respondent
creditor. The Appellant contended
that owing to non-release of funds
under the MRA, the appellant was
unable to pay back its debts as
envisaged. The NCLT dismissed the
application on the grounds that 1) no
audience has to be given to the
Corporate Debtor by the Code 2) the
corporate debtor has not taken the
plea contained in the second
application in the first application

The NCLT gave the above order also

because a limited time frame of only
14 days has been granted under the
Code from the date of filing of the
creditor petition to decide the
application. The NCLAT upheld the
order of the NCLT on appeal. The
Supreme Court upheld the orders of
both the NCLT and NCLAT.