National Company Law Tribunal (NCLT) Chandigarh bench & Debt Recovery Tribunal (DRT) Chandigarh handles corporate matters related to bad debts, NPA, Insolvency & Bankruptcy, anomalies related to the functioning of companies, shares transfer & recovery of loans.(Company Law board, Industrial Disputes,& Insolvency Banking/Bankruptcy Code NCLT Chandigarh for Class Action, Share Transfer Disputes, Oppression, Revision of Financial Statements, Deregistration, Investigation)
The insolvency procedure at the National Company Law Tribunal (NCLT) Chandigarh follows the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC), 2016. This time-bound process can be initiated by a financial creditor, an operational creditor, or the corporate debtor itself if the minimum default amount is at least ₹1 crore.
NCLT Chandigarh Insolvency Procedure/Process
- Filing an Application: The concerned party (creditor or corporate debtor) files an application in the prescribed form (Form 1 for financial creditors, Form 5 for operational creditors, Form 6 for corporate debtors) with the NCLT Chandigarh bench via the e-filing portal and physically at the registry.
- NCLT Review and Admission: The NCLT bench examines the application to verify the existence of a debt and default. It must decide to admit or reject the application within 14 days.
- Appointment of Interim Resolution Professional (IRP) and Moratorium: Upon admission, the NCLT declares a moratorium, which stays all pending legal actions against the corporate debtor. An IRP is appointed to take control of the debtor’s management and assets.
- Public Announcement and Claims Verification: The IRP makes a public announcement inviting creditors to submit their claims, which are then verified.
- Formation of Committee of Creditors (CoC): The IRP forms a CoC comprising financial creditors. The CoC then decides whether to confirm the IRP as the Resolution Professional (RP) or appoint a new one.
- Formulation and Approval of Resolution Plan: The RP invites resolution plans from eligible applicants. The CoC must approve a plan with a 66% voting share and submit it to the NCLT for final approval.
- NCLT Approval or Liquidation: If the NCLT approves the resolution plan, it becomes binding on all stakeholders. If no viable plan is approved within the maximum 330-day timeframe (including extensions and legal proceedings), the NCLT orders the liquidation of the corporate debtor’s assets.
The DRT Chandigarh case procedure involves e-filing a Debt Recovery Application (DRA) with supporting documents on the DRT portal (mandatory now). After filing, the Tribunal issues a summons to the borrower, followed by the borrower’s written statement, then evidence presentation, hearings, and finally, orders or a Recovery Certificate (RC) for enforcement by a Recovery Officer, with options for mediation and appeals to the Appellate Tribunal (DRAT).
Key Steps in the DRT Chandigarh Procedure
- Preparation & E-Filing:
- Document Prep: Gather loan agreements, security documents, bank statements, and evidence of default.
- E-Filing: Use the e-DRT portal to file the application (Original Application – OA) online, selecting the correct jurisdiction (based on police station/district) and entering details.
- Fees: Pay required court fees and process fees.
- Case Initiation:
- Scrutiny & Registration: The DRT scrutinizes the application and registers the case.
- Summons: A summons is issued to the borrower (defendant) to appear and respond within 30 days.
- Hearing & Evidence:
- Written Statement: The borrower files a written statement.
- Evidence: The matter is posted for evidence, where both parties present their case.
- Mediation: Cases can go to mediation for settlement before trial.
- Orders & Recovery:
- Order/Judgment: The Presiding Officer passes an order or judgment.
- Recovery Certificate (RC): If debt is confirmed, an RC is issued.
- Recovery Officer: The Recovery Officer executes the RC to recover the debt, potentially through property sale or attachment.
- Appeals:
- DRAT: An aggrieved party can appeal to the Debt Recovery Appellate Tribunal (DRAT).
Important Considerations
- Timeline: The entire CIRP is designed to be completed within 180 days, with a potential one-time extension of up to 90 days, for a total maximum limit of 330 days including legal proceedings.
- Role of Professionals: While not mandatory, engaging legal professionals experienced in NCLT matters is highly recommended due to the complex procedural and documentation requirements.
- Jurisdiction: The NCLT Chandigarh bench has territorial jurisdiction over relevant cases arising in Northern India, including Punjab, Haryana, Himachal Pradesh, and Chandigarh.
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Key Points for DRT Chandigarh
- Mandatory E-Filing: All cases must now be filed online via the e-DRT portal.
- Jurisdiction: Ensure filing in the correct DRT Bench (e.g., Chandigarh) based on your case’s location.
- Case Status: Check status, cause lists, and orders on the e-DRT portal.
