Tribunal Enforces Cost Recovery through District Magistrate for Insolvency Code Violation
In a significant ruling, the National Company Law Tribunal (NCLT), Ahmedabad Bench, has directed the recovery of Rs. 2,00,000 from Mr. Yash Thakarshibhai Gajera, a personal guarantor, as arrears of land revenue. This decision was made following Mr. Gajera's failure to comply with a previous order to deposit the amount in the Prime Minister National Relief Fund.
The case, titled "Mr. Yash Thakarshibhai Gajera v. Bank of India," involves Mr. Gajera who had filed an application under Section 94 of the Insolvency and Bankruptcy Code, 2016. This application was dismissed by the Tribunal on August 25, 2025, with an imposed cost of Rs. 2,00,000 for non-compliance, which Mr. Gajera was ordered to pay within seven days.
Despite multiple notices and opportunities to comply, Mr. Gajera failed to deposit the required amount or provide any documentation of an appeal or stay order from a higher authority. The Tribunal, exercising its inherent powers under Rule 11 of the NCLT Rules, 2016, has now instructed the jurisdictional District Magistrate of Rajkot to proceed with the recovery process as per the Gujarat Land Revenue Code, 1879.
The Tribunal underscored the importance of adherence to its orders, emphasizing that such non-compliance undermines the integrity of legal processes. The District Magistrate is tasked with ensuring the amount is recovered and deposited into the Prime Minister National Relief Fund, with a compliance report to be submitted within 60 days.
This order marks a critical enforcement of the Insolvency and Bankruptcy Code provisions, highlighting the Tribunal's commitment to uphold its directives and ensure effective legal compliance.
Bottom Line:
Insolvency and Bankruptcy Code, 2016 - Non-compliance of Tribunal's order imposing cost - Tribunal directs recovery of cost amount as arrears of land revenue through jurisdictional District Magistrate/District Collector under provisions of Gujarat Land Revenue Code, 1879.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 94, National Company Law Tribunal Rules, 2016 Rule 11, Gujarat Land Revenue Code, 1879
Mr. Yash Thakarshibhai Gajera v. Bank of India, (NCLT)(Ahmedabad) : Law Finder Doc Id # 2833608
