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In GoAir Insolvency, Delhi High Court allows Aircrafts’ Lessors to access Airports, carry out inspection and maintenance of 30 Aircrafts – Accipiter Investments Aircraft 2 Ltd. Vs. Union of India & Anr. – Delhi High Court

In this case, the grievance of the lessors and owners of Aircrafts that have been leased to Go Air (India) Ltd. are that the DGCA has failed to deregister their Aircraft(s) in contravention of Sub-Rule (7) of Rule 30 of the Aircraft Rules, 1937.
Hon’ble High Court held that there can also be no denial of the fact that the Aircrafts of the Petitioners are extremely valuable and highly sophisticated equipment and require regular maintenance for their preservation. Therefore, with a view to obviate any further losses, the following directions are being passed:
• (i) The Petitioners, their employees, agents, officers and/or representatives shall be permitted by the DGCA and the appropriate Airport Authorities to access the Airport(s) where the 30 Aircrafts are parked inter alia to inspect their respective Aircrafts, within the next 3 days;
• (ii) The Petitioners, their employees, agents, officers and/or representatives shall be permitted to carry out inspection and all maintenance tasks of the Aircraft, its engines and other parts and components, of all 30 Aircrafts, at least twice every month, until the final disposal of the Writ Petitions;
• (iii) Respondent/GoAir, its directors, employees, agents, officers and or representatives or the IRP/RP(s) or any person acting on their behalf, are hereby restrained from removing, replacing, taking out any accessories, parts, components or spares, etc. or any relevant operational or other Manuals /records, documentation from any of the 30 Aircraft, except with prior written approval of the Lessor of such Aircraft;
• (iv) The following additional directions shall be applicable to Aircraft MSN 6072: Respondent/DGCA shall permit the Respondent/RP to carry out the mandatory maintenance/engine runs of this Aircraft until its de-registration.

In GoAir Insolvency, Delhi High Court allows Aircrafts’ Lessors to access Airports, carry out inspection and maintenance of 30 Aircrafts – Accipiter Investments Aircraft 2 Ltd. Vs. Union of India & Anr. – Delhi High Court Read Post »

Whether Resolution Professional is within his power to amend or modify the terms of the contract for the supply of electricity entered into before the commencement of CIRP – Schreiber Dynamix Dairies Pvt. Ltd. Vs. Mr. Sumat Kumar Gupta, RP of International Mega Food Park Ltd. – NCLT Chandigarh Bench

In the present case, the rates have been increased by the original supplier of electricity, i.e., PSPCL and all that the Resolution Professional has done is to pass this increased electricity tariff to the applicant. The Adjudicating Authority found merit in the argument of the Resolution Professional that otherwise respondent-corporate debtor would have incurred huge financial losses thereby affecting its financial viability, had the RP not passed on to the applicant, the differentiated amount of tariffs fixed by PSPCL. In view of the afore-mentioned discussions, we are of the considered view that the upward modification of the tariff made by the RP to secure the financial health of the corporate debtor is justified and is as per the provisions of the IBC 2016.

Whether Resolution Professional is within his power to amend or modify the terms of the contract for the supply of electricity entered into before the commencement of CIRP – Schreiber Dynamix Dairies Pvt. Ltd. Vs. Mr. Sumat Kumar Gupta, RP of International Mega Food Park Ltd. – NCLT Chandigarh Bench Read Post »

Neither NCLT nor NCLAT is having jurisdiction to adjudicate a dispute comes around the execution of sale deed/interpretation of agreement to sale which had already occurred prior to initiation of CIRP – SICOM Ltd. Vs. Kitply Industries Ltd. – NCLAT New Delhi

By the impugned order, the appellant/Sicom Ltd was directed by NCLT to transfer Igatpuri Unit to the nominee of the Resolution Applicant M/s Kitply Industries Ltd within 45 (forty five) days.

NCLAT observed that till date the Corporate Debtor is not title holder of the property in question and dispute comes around the execution of the sale deed. It is admitted that dispute regarding either payment of remaining consideration amount as per sale agreement or non-execution of sale deed arose much much before initiation of CIRP in the present proceeding and as such neither RP nor NCLT was having any jurisdiction to deal with such property. We may observe that even in the resolution plan it was indicated that dispute in respect of the property in question was existing which is evident from communication dated 02.06.2019. NCLT has exceeded its jurisdiction in directing the appellant to transfer the property in question in favour of Corporate Debtor. The dispute whether agreement to sale which was entered in between the parties in the year 1998 was breached by the appellant or the respondent breached the agreement, may not be examined in a proceeding under the IBC. Such disputes are required to be examined by the court of competent jurisdiction. In view of admitted position that title of the property in respect of Igatpuri Unit still lies with the appellant, the Learned NCLT has committed error in allowing the application filed on behalf of the Respondent in directing for transferring the land in question and as such there is no option but to set aside the impugned order.

Neither NCLT nor NCLAT is having jurisdiction to adjudicate a dispute comes around the execution of sale deed/interpretation of agreement to sale which had already occurred prior to initiation of CIRP – SICOM Ltd. Vs. Kitply Industries Ltd. – NCLAT New Delhi Read Post »

Transactions of giving huge amount without any security interest or bank guarantee and subsequently writing off the same from the book can only be termed as fraudulent transactions – Shri Baiju Trading and Investment Pvt. Ltd. Vs. Mr. Arihant Nenawati (Liquidator for Royal Refinery Pvt. Ltd.) & Ors. – NCLAT New Delhi

NCLAT observes that in 2019 such huge loan was all of a sudden written off by the Respondent Nos. 2 & 3 from the books of the Corporate Debtor and evidently the Appellant is the principal/sole beneficiary. The plea of the Appellant made before us that it is a Corporate Debtor who has written off and not by the Appellant and therefore the Appellant should not be held liable for fraudulent transactions under Section 66 is not convincing at all. It is a matter of common prudence that if the money is written off from the books of the Corporate Debtor, there is hardly any chance for the management/ successor/ Resolution Professional to recover the same from the Appellant. There is no explanation which we can take into account either from the submissions of the Appellant or Respondent Nos. 2 & 3 as to why such write off was necessary and circumstances which led to this write off. Such transactions of giving huge amount to unconnected/unrelated parties and apparently without any security interest or bank guarantee as collateral security in favour of the Corporate Debtor and subsequently writing off the same from the book can only be termed nothing else but as fraudulent transactions done with the intent to defraud the creditors of the Corporate Debtor. From the averments as well from the records made available, this Appellate Tribunal tend to agree with the Adjudicating Authority that the nature of the transactions are covered squarely under Section 66 of the Code, 2016.

Transactions of giving huge amount without any security interest or bank guarantee and subsequently writing off the same from the book can only be termed as fraudulent transactions – Shri Baiju Trading and Investment Pvt. Ltd. Vs. Mr. Arihant Nenawati (Liquidator for Royal Refinery Pvt. Ltd.) & Ors. – NCLAT New Delhi Read Post »

A commercial appeal before High Court against the issue of decree is not allowed if moratorium under Section 14 of IBC was in place on the date of filing of the appeal – M/s G.K. Ispat Pvt. Ltd. Vs. M/s Consolidated Construction Consortium Ltd. – Karnataka High Court

Hon’ble High Court held that a conjoint reading of the proviso to Section 14 of the IBC and the provisions of Section 33 of the IBC, would show that where the resolution plan is rejected or not accepted, the Tribunal is required to pass an order requiring corporate debtor be liquidated in the manner laid down in the chapter and carry out such other actions as mandated therein. From a reading of the above, it is apparent that the prohibition under Section 14 of the IBC prohibiting the initiation of proceedings or continuation of proceedings was in place as on the date of filing of the appeal.

A commercial appeal before High Court against the issue of decree is not allowed if moratorium under Section 14 of IBC was in place on the date of filing of the appeal – M/s G.K. Ispat Pvt. Ltd. Vs. M/s Consolidated Construction Consortium Ltd. – Karnataka High Court Read Post »

On account of failure of assignee to file application to continue the proceeding, the application could not have been dismissed, the original Financial Creditor could have continued the proceeding for the benefit of assignee – Surender Singh Vs. Yes Bank Ltd. & Anr. – NCLAT New Delhi

In the present case we are considering the case where Section 7 Application was filed by the Yes Bank where hearing took place before the Adjudicating Authority, the fact of assignment was brought under notice and prayer was made to dismiss Section 7 Application. Application was entertained by the Adjudicating Authority and notices were issued on 19.01.2023 fixing 21.12.2022 as the next date.
NCLAT held that the Application could have been continued and would not have been prejudicially affected by reason of acquisition of the financial asset. Hon’ble Supreme Court in Sharadamma Vs. Mohammed Pyrejan (Dead) on considering the aforesaid Rules had held that on account of failure of assignee to file application to continue the proceeding, the application could not have been dismissed, the original Applicant could have continued the proceeding for the benefit of assignee.

On account of failure of assignee to file application to continue the proceeding, the application could not have been dismissed, the original Financial Creditor could have continued the proceeding for the benefit of assignee – Surender Singh Vs. Yes Bank Ltd. & Anr. – NCLAT New Delhi Read Post »

Section 66(1) of IBC confers no jurisdiction but declaring any transaction as void, even if fraudulent, but confers jurisdiction on NCLT to fix the liabilities on the persons responsible for conducting business of corporate debtor which is fraudulent or wrongful – Smt. Sudipa Nath Vs. Union of India – Tripura High Court

Hon’ble High Court held that in legislature wisdom and as apparent from the text of 66(1) it is clear that firstly it confers no jurisdiction but declaring any transaction as void, even if fraudulent, but confers jurisdiction on NCLT to fix the liabilities on the persons responsible for conducting business of corporate debtor which is fraudulent or wrongful. Secondly section 66(1) contemplates an application thereunder only by the resolution professional and by none other. Thirdly section 66 (1) also restricts the power of NCLT subject to being satisfy with pre-requisite that any business of the corporate debtor has been carried on with intent to defraud creditors or the corporate debtors or for any fraudulent purpose and if satisfied it powers to pass an order is only against such person who are responsible for the conduct of such fraudulent business of the corporate debtor with mens rea to make them personally liable to make such contributions to the assets of the corporate debtor as it may deem fit.

Section 66(1) of IBC confers no jurisdiction but declaring any transaction as void, even if fraudulent, but confers jurisdiction on NCLT to fix the liabilities on the persons responsible for conducting business of corporate debtor which is fraudulent or wrongful – Smt. Sudipa Nath Vs. Union of India – Tripura High Court Read Post »

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