Analysis of CIRPs, Liquidation Process, Voluntary Liquidation, Registered Insolvency Professionals & Registered Valuers with IBBI etc.. in Chart & Diagrams...
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Notified categories of financial service providers
Notified categories of financial service providers Notifications S.O.4139(E) dated 18.11.2019 E GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 18th November, 2019 S.O. 4139(E).—In exercise of the powers conferred by section 227…
If the amount offered in favour of stakeholders including the Financial Creditors & the Operational Creditors is being much less than the Liquidation Value, such Plan cannot be accepted-M/s. Accord Life Spec Private Limited Vs. M/s. Orchid Pharma Limited-NCLAT
The Liquidation Value is decided before the publication of the Information memorandum, which is published for the purpose of calling for Resolution Plan from eligible Resolution Applicants. It cannot be accepted that Liquidation Value is Notional Value and can never be realized during the Liquidation. The objective of the Code, 2016 is Resolution and not Liquidation. Further, the aim of the Code is to consolidate and amend the law relating to reorganization and insolvency resolution of corporate persons, partnership firms and individual persons in a time bound manner for maximization of the value of assets of such persons (Corporate persons herein), to promote entrepreneurship availability of credit and balance interest of such persons (Creditors)/ stakeholders. The maximization of value of assets of the Corporate Debtor as also the maximization of the assets of the ‘Financial Creditors’ and the ‘Operational Creditors’, are the basic essence of the Code.
Scope of Valuation under Companies Act, 2013
Scope of Valuation under Companies Act, 2013 The Ministry Corporate Affairs (MCA) has, since October 2017, notified Section 247 of the Companies Act, 2013 and introduced the Companies (Registered Valuers and Valuation) Rules, 2017. The MCA has designated the Insolvency…
Transfer made in the ordinary course of the business or financial affairs of the Corporate Debtor or the transferee be not included within the meaning of preferential transactions-Tirumala Balaji Alloys Private Limited Vs. Sumit Binani-NCLAT
From the Sec. 43, it is clear that if there is a transfer of property or an interest thereof of the Corporate Debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the Corporate Debtor is transferred, then it comes within the meaning of preferential transactions. The preferential transactions has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with Section 53. As per sub-section (3) of Section 43, transfer made in the ordinary course of the business or financial affairs of the Corporate Debtor or the transferee be not included within the meaning of preferential transactions.
Once the claim of a creditor is taken into consideration in Resolution Plan providing them same treatment as has been given to the other similarly situated Creditors, the Creditor, thereafter cannot take the benefit of Sec. 60(6) nor they can take benefit of arbitration proceeding for the same claim-M/s. Kotak Mahindra Prime Ltd. Vs. Mr. Bijay Murmuria & Ors.-NCLAT
As per the Sec. 60(6), it is always open to a Creditor to proceed with the suit or arbitration proceeding, if pending, on completion of the Moratorium. However, once a Creditor/Financial Creditor or Operational Creditor files its claim before the Resolution Professional and the same is taken into consideration by the Successful Resolution Applicant and while submitting the plan or the revised plan providing them same treatment as has been given to the other similarly situated Financial Creditors/Operational Creditors, the Financial Creditors/Operational Creditors, thereafter cannot take the benefit of sub-section (6) of Section 60 of the Code nor they can pray to pursue the suit or arbitration proceeding or to file a fresh suit or arbitration proceeding for the same claim.
The CoC & the AA if they refused to approve the Resolution Plans filed and rejected the applications for reconsideration of the same, no interference is called for-M/s. B.R. Traders Vs. Venkataramanarao Nagarajan & Ors.-NCLAT
Case Reference Case Name : M/s. B.R. Traders Vs. Venkataramanarao Nagarajan & Ors. Company Appeal : Company Appeal (AT) (Insolvency) No. 189 of 2019 Appellant : M/s. B.R. Traders Respondent : Venkataramanarao Nagarajan & Ors. Case Name : M/s. K.K.…
The limitation(Article 137) for application u/s 7 will start from the date of accrual of right i.e. from the date of confirmation or acknowledgment of the debt & to be read along with Sec. 18 of the Limitation Act, 1963- K.R.V. Uday Charan Rao Vs. Bank of India & Anr.-NCLAT
NCLAT held that For counting the period of limitation in filing the application u/s 7, Part II of Third Division of Schedule of Limitation Act, 1963 i.e. Article 137 is applicable. It is clear that the limitation will start from the date of accrual of right. The accrual of right is also to be noticed from the date of confirmation or acknowledgment of the debt and to be read along with Section 18 of the Limitation Act, 1963 and held that the application u/s 7 is not barred by limitation and the Adjudicating Authority has rightly admitted the application u/s 7.
Bulletin-XIV