In a significant development, the High Court of Gujarat, in a hearing held on Monday, September 4, issued an order staying the National Company Law Tribunal (NCLT) order dated September 1, 2023, in the case of Arzeen Khambatta versus Bharat Road Carriers. The petitioner, represented by Gupta Law Associates, had approached the High Court seeking relief against the NCLT order.

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The petitioner, Arzeen Khambatta, had filed a Special Civil Application (SCA) numbered 15469 of 2023, seeking several reliefs, including a stay on the effect of the NCLT order dated September 1, 2023, until the statutory appeal preferred against it is heard and disposed of.

During the hearing, Mihir Thakore, Senior Counsel representing Gupta Law Associates, argued that the petitioner had resorted to approaching the High Court due to the order passed by the NCLT, which was challenged by filing an appeal before the National Company Law Appellate Tribunal (NCLAT) under Section 61 of the Insolvency and Bankruptcy Code, 2016.

The High Court, taking into account the unique circumstances of the case, issued an ad-interim order directing that the NCLT order dated September 1, 2023, should not be acted upon until the statutory appeal before the NCLAT is listed for hearing. The Court also issued notice returnable on September 11, 2023.

This development has immediate implications for the petitioner, Arzeen Khambatta, as it allows them to continue operating the bank accounts of the Corporate Debtor until their appeal is heard by the NCLAT. The case has garnered attention within legal circles for the swift action taken by the High Court in granting a stay on the NCLT order on the very first day of the hearing.

The dispute in question, which revolves around the Corporate Insolvency Resolution Process (CIRP), has raised significant legal and financial concerns, making it a matter of considerable interest to the business and legal communities.

The High Court's decision to stay the NCLT order sets an important precedent in the realm of insolvency and bankruptcy law, emphasizing the need for due process and fair legal proceedings.

Earlier on on Friday, September 1, NCLT's Ahmedabad branch had accepted an insolvency application against soft drink manufacturing company Rasna. The order was delivered by a two-judge bench on Friday in a case of non-payment of freight of about Rs 71 lakh.

Also Read - Rasna to challenge NCLT's insolvency order; court appoints official to take full charge of firm's assets