Case Updates

From the Tribunals

Principles decided in matters handled by the firm before the NCLT, the NCLAT and the courts, stated for information.

NCLATHomebuyers2026

Statutory transfer of maintenance to the Apartment Owners Association

Under Section 14(5) of the U.P. Apartment (Promotion of Construction, Ownership and Maintenance) Act, 2010, upon formation of the association of apartment owners, the management of the common areas and facilities stands deemed to be transferred from the promoter to the association.

So long as the registration subsists, it cannot be questioned by the maintenance agency in collateral proceedings, and a challenge pending at the instance of some allottees does not divest the association of its status.

OutcomeThe maintenance agency appointed by the promoter, presently under CIRP, was directed to hand over maintenance to the Association within thirty days.

NCLTAcquisition2025

Approval of a resolution plan under Section 31 of the Code

Once a resolution plan is approved by the Committee of Creditors, the scrutiny of the Adjudicating Authority is confined to examining whether the plan satisfies the requirements of Section 30(2) of the Code. The commercial terms and the feasibility and viability of the plan rest in the commercial wisdom of the Committee of Creditors, and where those requirements are met, the plan shall be approved under Section 31(1).

Upon approval, the plan binds the corporate debtor, its employees, members, creditors, including governmental authorities, guarantors and other stakeholders. Under Section 32A, where the plan results in a change in management or control, the liability of the corporate debtor for offences committed prior to the commencement of the CIRP ceases.

OutcomeThe firm advised the consortium on its acquisition of the corporate debtor, structuring and preparing its proposal and representing it before the NCLT. The Resolution Plan, approved by the Committee of Creditors with 100% of the voting share and valued above the fair value of the corporate debtor, was approved by the NCLT, completing the acquisition.

NCLATInsolvency2024

Financial debt without a written contract

A written financial contract is not a pre-condition or an exclusive requirement for proving the existence of a financial debt. Where a loan is disbursed against interest and is repayable on demand, the essential conditions of a financial debt, including the time value of money, stand established, and no separate written notice demanding repayment is necessary.

Entries in Form 26AS reflecting TDS deducted by the corporate debtor on interest, which correspond to the claim, constitute evidence of the financial debt and of the rate of interest, particularly where the debt is also reflected in the corporate debtor’s audited financial statements and ledgers.

OutcomeThe appeal of the Suspended Director was dismissed, and the admission of the Corporate Debtor into CIRP on the application of the Financial Creditor was upheld.

NCLATInsolvency2022

Recall of an ex-parte admission is not a review

An application to set aside an ex-parte order admitting a Section 9 application lies under Rule 49(2) of the NCLT Rules, 2016, and is not barred by the absence of a power of review under the Code. Recall is a procedural review, available where the order suffers from a procedural defect such as want of service.

The bar on recall after constitution of the Committee of Creditors does not apply where the recall application was filed before the CoC came into existence.

OutcomeThe ex-parte orders were set aside, bringing to an end a CIRP that had continued for over two years. On remand, the NCLT decided the Section 9 application in favour of the Suspended Management.

These summaries are provided for information on the principles decided. They are not legal advice, and parties are not named where it is not necessary to explain the principle.

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