Insolvency and Bankruptcy Code 2016

When the contract is oral, its enforceability will come into question if there is dispute | Mere fact that a reply to notice under Section 8(1) of IBC having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the latter to bring pre-existing dispute before NCLT – German Solar Asia Pte Ltd. Vs. Zytech Solar India Pvt. Ltd. – NCLT Hyderabad Bench

The Hon’ble NCLT Hyderabad Bench held that:
(i) The contract can be either oral or written. When the contract is oral, its enforceability will come into question if there is dispute.
(ii) Mere fact that a reply to notice under Section 8(1) having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the latter to bring relevant materials before the adjudicating authority to establish that there is pre-existing dispute which may lead to the rejection of Section 9 application.
(iii) Pre-existing dispute employed under the IBC cannot be equated with even the principle of preponderance of probability which guides a civil court at the stage of finally decreeing a suit.
(iv) The IBC is not intended to be a substitute for a recovery forum.

When the contract is oral, its enforceability will come into question if there is dispute | Mere fact that a reply to notice under Section 8(1) of IBC having not been given within 10 days or no reply to demand notice having been filed by the Corporate Debtor does not preclude the latter to bring pre-existing dispute before NCLT – German Solar Asia Pte Ltd. Vs. Zytech Solar India Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

Even if there is no plea raised regarding limitation, the Court is obliged to examine the question of limitation before further proceeding in any matter | Default in the case of Personal Guarantors arises when the guarantees were invoked making them liable to pay the debt – Bank of Maharashtra Ltd. Vs. Mr. Suraj Bharatkumar Parekh – NCLT Mumbai Bench

The Hon’ble NCLT Mumbai Bench held that it is well settled that even if there is no plea raised regarding limitation, the Court is obliged to examine the question of limitation before further proceeding in any matter. The default in the case of Personal Guarantors arises when the guarantees were invoked making them liable to pay the debt. Generally, the default date of the principal borrower is the date of default for the guarantor also. However, it may not always be the same, rather it depends upon the nature and contents of the deed of guarantee executed by the guarantor.

Even if there is no plea raised regarding limitation, the Court is obliged to examine the question of limitation before further proceeding in any matter | Default in the case of Personal Guarantors arises when the guarantees were invoked making them liable to pay the debt – Bank of Maharashtra Ltd. Vs. Mr. Suraj Bharatkumar Parekh – NCLT Mumbai Bench Read Post »

Resolution Professional cannot accept any claim which has been adjudicated during the moratorium – The Regional Provident Fund Commissioner-II (Legal), Employees Provident Fund Organization Vs. Mr. Rajendra Jain, RP of Kimaya Industries Pvt. Ltd. – NCLT Ahmedabad Bench

The Hon’ble NCLT Ahmedabad Bench held that the applicant being the EPF authority has raised certain demands which were adjudicated during the CIRP period which was after the initiation of the moratorium under Sec. 14(1) of IBC, when no assessment proceedings can be continued by the applicant irrespective of whether certain documents were sought from the Resolution Professional. This does not, however, as per Sec. 33 (5) prohibit the applicant to continue with or even initiation of proceedings after the liquidation order is passed. When the liquidation order is passed, the moratorium ends which enables the protected assets of the Corporate Debtor to be free of any further consideration under liquidation estate.

Resolution Professional cannot accept any claim which has been adjudicated during the moratorium – The Regional Provident Fund Commissioner-II (Legal), Employees Provident Fund Organization Vs. Mr. Rajendra Jain, RP of Kimaya Industries Pvt. Ltd. – NCLT Ahmedabad Bench Read Post »

Liability arises on the part of Corporate Debtor in respect of sale agreement, which, being in the nature of a financial lease under Ind AS, is covered under Section 5(8)(d) of the Code? – Ghaziabad Development Authority Vs. Mr. Amit Agarwal – NCLT Principal Bench

The Hon’ble NCLT Principal Bench is of the view that the judgment, in Sandeep Mittal v. ASREC (India) Ltd. and Ors. (2024) ibclaw.in 573 NCLAT relied by Corporate Debtor is on a different footing based on a different factual matrix in which primarily the ingredients of Section 5(8)(f) of the Code were covered whereas in the present case ingredients of Section 5(8)(d) of the Code is applicable wherein it is a case of liability of Corporate Debtor, as is in the form a financial lease with the element of time value of money being incorporated in the agreement to sale itself and part transacted and balance defaulted with interest liability.

Liability arises on the part of Corporate Debtor in respect of sale agreement, which, being in the nature of a financial lease under Ind AS, is covered under Section 5(8)(d) of the Code? – Ghaziabad Development Authority Vs. Mr. Amit Agarwal – NCLT Principal Bench Read Post »

The power of re-call does not mean to hear the case – Mr. Chintala Maipal Reddy and Ors. Vs. Mr. Nethi Mallikarjuna Setty Liquidator of Amazon Enterprises Pvt. Ltd. – NCLT Hyderabad Bench

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The power of re-call does not mean to hear the case – Mr. Chintala Maipal Reddy and Ors. Vs. Mr. Nethi Mallikarjuna Setty Liquidator of Amazon Enterprises Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

Whether the admission of Corporate Debtor into CIRP can be kept in abeyance based on the order of Vidarbha Industries Power Ltd? – Kotak Mahindra Bank Ltd. Vs. Kunal Structure (India) Pvt. Ltd. – NCLT Ahmedabad Bench

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Whether the admission of Corporate Debtor into CIRP can be kept in abeyance based on the order of Vidarbha Industries Power Ltd? – Kotak Mahindra Bank Ltd. Vs. Kunal Structure (India) Pvt. Ltd. – NCLT Ahmedabad Bench Read Post »

Is an application under Section 7 of the IBC maintainable against the interest portion only? – Piramal Capital & Housing Finance Ltd. Vs. Sunblink Real Estate Pvt. Ltd. – NCLT Mumbai Bench

The Hon’ble NCLT Mumbai Bench held that the present petition has been filed on the basis of default in payment of interest on the amounts due arising for the period after the 10A period in terms of clause 4.1 and 4.2 of Loan Agreement. The said amount in default is in excess of Rs. 1.00 crores and default is stated to have taken place on 12.02.2024 i.e. after 15 working days subsequent to the issuance of the Demand Notice dated 25.01.2024. There has been a financial debt in respect of which default has been committed by the Corporate Debtor and further that the Application has been filed within the period of limitation. Therefore, the Application u/s 7 of the Code, deserves to be admitted.

Is an application under Section 7 of the IBC maintainable against the interest portion only? – Piramal Capital & Housing Finance Ltd. Vs. Sunblink Real Estate Pvt. Ltd. – NCLT Mumbai Bench Read Post »

ITAT remands the appeal to the Assessing Officer to take necessary action as per Section 156A of the Income Tax Act, 1961 – Bhushan Steels Ltd. Vs. ACIT Central – ITAT New Delhi

The Hon’ble ITAT, New Delhi referring Section 14 of IBC and Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd. and Ors., (2021) ibclaw.in 54 SC case, held that in the present facts of the case, the resolution plan is yet to be finalized. As per the newly inserted provisions of Section 156A of the Income Tax Act 1961, it is necessary to remand the appeal to the Ld. AO to take necessary steps/action as per Rules.

ITAT remands the appeal to the Assessing Officer to take necessary action as per Section 156A of the Income Tax Act, 1961 – Bhushan Steels Ltd. Vs. ACIT Central – ITAT New Delhi Read Post »

Section 33(2) of the IBC leaves hardly any choice to the Adjudicating Authority, once the CoC decide with the 66% voting rights to liquidate the Corporate Debtor – Amrit Rajani Vs. Pegasus Assets Reconstruction Pvt. Ltd. and Anr. – NCLAT New Delhi

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Section 33(2) of the IBC leaves hardly any choice to the Adjudicating Authority, once the CoC decide with the 66% voting rights to liquidate the Corporate Debtor – Amrit Rajani Vs. Pegasus Assets Reconstruction Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Does NCLT have jurisdiction to direct the valuation of shares sold by Liquidator of a foreign Subsidiary Company of Corporate Debtor? – State Bank of India Vs. Shantanu Prakash and Ors. – NCLAT New Delhi

The Hon’ble NCLT held that the order on liquidation on EAPPL was passed by the High Court of Singapore, therefore, any issue regarding the liquidation proceedings including sale value of the shares held by the Subsidiary of the Corporate Debtor sold by SBI with the consent of the liquidators of the Subsidiary could have been raised in liquidation proceedings of the Subsidiary before the High Court of Singapore as the assets in question were owned by the Subsidiary and not by the Corporate Debtor.

Does NCLT have jurisdiction to direct the valuation of shares sold by Liquidator of a foreign Subsidiary Company of Corporate Debtor? – State Bank of India Vs. Shantanu Prakash and Ors. – NCLAT New Delhi Read Post »

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