A digest of insolvency developments in mid-February 2023: the NCLAT on full payment of provident fund and gratuity dues, the dismissal of the IBBI’s appeal in GTL Infrastructure, and NCLT orders in Lavasa, McLeod Russel, Zee Learn and Sintex.
NCLAT
- IBBI’s appeal in GTL Infrastructure dismissed. The NCLAT dismissed the IBBI’s challenge to the NCLT’s refusal to admit GTL Infrastructure into CIRP. The appeal had been seen as an attempt to correct course after tribunals relied on Vidarbha Industries to reject admission despite default. Economic Times
- Provident fund and gratuity must be paid in full. The NCLAT held that a resolution plan which does not provide for full payment of provident fund and gratuity dues of workmen and employees up to the insolvency commencement date does not comply with Section 30(2) of the IBC. A plan paying 35.13% of those dues was found to be in breach. Bar & Bench · LiveLaw
- Google’s competition appeal. Domestic retailers were expected to support Google’s case before the NCLAT in its appeal against the Competition Commission of India’s order, which the Supreme Court directed be disposed of by 31 March. Financial Express
NCLT
- Lavasa: equitable distribution. Relying on the Supreme Court’s decision in Rainbow Papers, the Mumbai Bench directed the lenders of Lavasa Corporation to consider an equitable distribution of sale proceeds and asked the successful bidder to submit a modified plan for the CoC’s consideration. Economic Times
- Rejoinder permitted after the opportunity was closed. In State Bank of India v. India Power Corporation Ltd., the Hyderabad Bench invoked Rule 153 of the NCLT Rules to permit a financial creditor to file its rejoinder after the right to do so had been closed, treating the request as one for condonation of delay and not as a review.
- McLeod Russel India admitted. The Kolkata Bench admitted a Section 7 application filed by IL&FS Infrastructure Debt Fund against the bulk tea producer. Business Standard
- Zee Learn admitted. The NCLT admitted a petition by Yes Bank against Zee Learn over alleged defaults of ₹468.9 crore. Financial Express
- Sintex Industries. The Ahmedabad Bench approved the joint resolution plan of Reliance Industries and Assets Care & Reconstruction Enterprise, which provides for reduction of share capital and delisting of the equity shares at nil value. Business Standard
This bulletin is an initiative for knowledge sharing. It summarises reported judgments and developments and does not contain personal views or opinions on them.
