Uttam Galva Steels Limited Vs DF Deutsche Forfait AG And Anr (NCLAT Delhi)
In a significant ruling, the National Company Law Appellate Tribunal (NCLAT) Delhi has set aside an order by the National Company Law Tribunal (NCLT) Mumbai that initiated corporate insolvency resolution proceedings against Uttam Galva Steels Limited. The NCLAT’s decision, delivered in the case of Uttam Galva Steels Limited Vs DF Deutsche Forfait AG & Anr., hinged on several crucial interpretations of the Insolvency and Bankruptcy Code (IBC), 2016, concerning joint applications by operational creditors, the validity of demand notices issued by lawyers, and the mandatory nature of financial institution certificates.
Background of the Dispute
The case originated from a joint application filed under Section 9 of the IBC by DF Deutsche Forfait AG and another entity, both claiming to be operational creditors of Uttam Galva Steels. The NCLT Mumbai had admitted this application on April 10, 2017, despite objections raised by Uttam Galva Steels.
Uttam Galva Steels, the Corporate Debtor, challenged the NCLT’s order on multiple grounds. Their primary contention was the existence of a pre-existing, bona fide dispute between the parties, which, they argued, rendered the insolvency application non-maintainable under Section 5(6) of the IBC.
Grounds for Appeal by Uttam Galva Steels
