NCLAT Asks NCLT to Send Insolvency Plea Against Samay Electronics to 3rd Member after Split Verdict

Must Read

NGT Red-Flags Kaleshwaram Project: Green Clearance Violated the Law, Halt Work

Excerpt The National Green Tribunal (NGT), Principal Bench, dated 20th October 2020, directed the Telangana government to stop all work,...

There Can Be No Leniency Shown To Appellant Who Pleaded To Reduce Sentence: Delhi High Court

Facts On 25.2.2016 the victim’s sister who was 13 years old was present with her sister who was 2 years...

Violation of Executive Instructions Cannot Be Sole Ground to Invalidate Transfer Orders: Tripura High Court

In Dr Bithika Choudhury vs the State of Tripura & Ors., a Division Bench consisting of Hon’ble Justice S. Talapatra...

Case Regarding Anticipatory Bail, Applicant May Be Released Imposing Suitable Conditions: Gujarat High Court

A Single-Judge Bench of Gujarat High Court consisting of Honourable Dr Justice A.P. Thakur had been hearing submissions of...

Proof of Infliction of Fatal Injury Not Mandatory for Conviction Under Section 307, IPC: Tripura High Court

In the case of Mamin Miah vs the State of Tripura, a Division Bench consisting of Hon’ble Justice S....

Bombay High Court Pursues Case Alleging Media Trial, Says NBSA Guidelines Must Be Toothed by Centre

Amid the pleas alleging media trials, the Division Bench had been hearing submissions of the News Broadcasters’ Authority (NBA)....

Follow us

Introduction 

The National Company Law Appellate Tribunal (NCLAT) judgment, dated 22nd September 2020 has directed the NCLT to place the matter before a third member so that it is decided by a majority. JM Financial Asset Reconstruction Company filed an application under Section 7 of the Insolvency and Bankruptcy Code. 

Brief Facts

Conflicting orders have been passed by the two Members comprising the Bench of Adjudicating Authority (National Company Law Tribunal), Ahmedabad Bench, Court I. The two-member Ahmedabad bench of the National Company Law Tribunal (NCLT) had delivered the split verdict on February 26, 2020. The technical member-directed admitting the application filed under Section 7 of the Insolvency and Bankruptcy Code to initiate the proceedings, while the judicial member gave a dissenting view, rejecting the plea.

Arguments Before the Court

JM Financial Asset Reconstruction Company (appellant), which is acting as a trustee of JMFARC-SBI, approached the National Company Law Appellate Tribunal (NCLAT), asking for the appeal against the orders of NCLT.

The Appellant submits that the mandate of Section 419(5) of the Companies Act was not followed as the two Members of the Bench had conflicting views on the vital issues resulting in disposal of application in two different ways viz. one allowing admission of the application under Section 7 and other rejecting it.

Analysis

The two-member Ahmedabad bench of the National Company Law Tribunal (NCLT) had delivered the split verdict on February 26, 2020, in the case of

J.M. Financial Asset Reconstruction Company Ltd. V. Samay Electronics Pvt. Ltd. 

The case dealt with Section 7 of Insolvency and Bankruptcy Code which provides for a statutory right in favour of a financial creditor to initiate the corporate insolvency resolution process of a corporate debtor on the occurrence of a default.

Court’s Observation and Decision

Appellate tribunal NCLAT has directed that a plea by JM Financial Asset Reconstruction Company to initiate insolvency proceedings against Samay Electronics be placed before a third member of the NCLT Ahmedabad bench after two other members of the same bench gave a split verdict in the matter. 

The Court observed and said:

“After hearing learned counsel for the appellant, we deem it appropriate to dispose of this appeal with direction to the same Bench of the Adjudicating Authority, which passed two conflicting orders, to make a reference to the President, NCLT, if not already made…”

“… for hearing on the issues and points on which the two Members of the Bench had a divergent view in the split verdict so that the matter is placed before a third Member for hearing and the Company Petition is decided in accordance with the opinion of the majority of the Members who heard the case including the member before whom it is placed.”


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgment from courts. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

NGT Red-Flags Kaleshwaram Project: Green Clearance Violated the Law, Halt Work

Excerpt The National Green Tribunal (NGT), Principal Bench, dated 20th October 2020, directed the Telangana government to stop all work, except the drinking water component...

There Can Be No Leniency Shown To Appellant Who Pleaded To Reduce Sentence: Delhi High Court

Facts On 25.2.2016 the victim’s sister who was 13 years old was present with her sister who was 2 years old (victim) at their home....

Violation of Executive Instructions Cannot Be Sole Ground to Invalidate Transfer Orders: Tripura High Court

In Dr Bithika Choudhury vs the State of Tripura & Ors., a Division Bench consisting of Hon’ble Justice S. Talapatra and Hon’ble Justice S.G. Chattopadhyay...

Case Regarding Anticipatory Bail, Applicant May Be Released Imposing Suitable Conditions: Gujarat High Court

A Single-Judge Bench of Gujarat High Court consisting of Honourable Dr Justice A.P. Thakur had been hearing submissions of the Applicant to release him...

Proof of Infliction of Fatal Injury Not Mandatory for Conviction Under Section 307, IPC: Tripura High Court

In the case of Mamin Miah vs the State of Tripura, a Division Bench consisting of Hon’ble Justice S. Talapatra and Hon’ble Justice S....

Bombay High Court Pursues Case Alleging Media Trial, Says NBSA Guidelines Must Be Toothed by Centre

Amid the pleas alleging media trials, the Division Bench had been hearing submissions of the News Broadcasters’ Authority (NBA). It prayed that severe restrictions...

Himachal Pradesh High Court Supports Promotion Based on Seniority of Post Rather Based on the Eligibility Test

In the case of Ramesh Chand Versus State of Himachal Pradesh & Others, the petitioner, reached the court as he was aggrieved by the...

NCDRC Dismisses PIL against Urologist, Holy Family Hospital, Says Mode Of Treatment Or Skill Differs From Doctor To Doctor

The National Consumer Dispute Redressal Commission (NCDRC) dismissed a petition against Holy Family Hospital and a Urologist, alleging negligence in diagnosing the septicemia and...

Himachal Pradesh High Court Disposes Suit for Possession and Permanent Prohibitory Injunction Due To Mutual Consent

In the case of Parveen Kumar vs Smt. Vijay Laxmi and Ors, the Petitioner, Parveen had filed a suit for declaration, possession and a permanent prohibitory...

Supreme Court Appoints Committee To Examine Arbitrariness of Sealing of Resorts in Elephant Corridor, Tamil Nadu

A Full Bench headed by the Chief Justice of India, in the matter of Hospitality Association of Mudumalai V. In Defence of Environment and Animals...

More Articles Like This

- Advertisement -