12. December Archives

Whether a notice issued under sections 13(2) and 13(4) of the SARFAESI Act, 2022 can be treated as an invocation of guarantee for the purpose of Section 95 of the IBC? – State Bank of India Vs. Amit Ranjan Mukherjee – NCLT Kolkata Bench

January 2, 2025 / 4 minutes of reading

Hon’ble NCLT Kolkata Bench held that:

(i) The criteria for examining the date of default for the purpose of limitation for the Corporate Debtor and Personal Guarantor are not the same.
(ii) The date when guarantee is invoked by the Creditor is the date of commencement of period of Limitation for filing Application under Section 95 of IBC, 2016.
(iii) The Date of Default will be the date on which the guarantee was invoked.

Whether a notice issued under sections 13(2) and 13(4) of the SARFAESI Act, 2022 can be treated as an invocation of guarantee for the purpose of Section 95 of the IBC? – State Bank of India Vs. Amit Ranjan Mukherjee – NCLT Kolkata Bench Read Post »

As long as a Corporate Debtor is categorised or registered under the relevant provisions for the Financial Service Provider, the Section 7 of IBC cannot be invoked, irrespective of the details surrounding the conditions attached to the FSP | A question relating to violation of the certificate as provided by the RBI, falls beyond the purview of NCLT – Sital Leasing and Finance Ltd. Vs. Gracious Portfolio Pvt. Ltd. – NCLT New Delhi Bench

January 2, 2025 / 3 minutes of reading

The NCLT New Delhi Bench held that the as long as the FSPt is categorised or registered under the relevant provisions for the Financial Service Provider, the provisions of Section 7 of the Code cannot be invoked against the FSP, irrespective of the details surrounding the conditions attached to the FSP. The settled position of law, as elucidated hereinabove, is that such a question relating to violation of the certificate as provided by the Reserve Bank of India, falls beyond the purview of this Adjudicating Authority.

As long as a Corporate Debtor is categorised or registered under the relevant provisions for the Financial Service Provider, the Section 7 of IBC cannot be invoked, irrespective of the details surrounding the conditions attached to the FSP | A question relating to violation of the certificate as provided by the RBI, falls beyond the purview of NCLT – Sital Leasing and Finance Ltd. Vs. Gracious Portfolio Pvt. Ltd. – NCLT New Delhi Bench Read Post »

Interest payable by the employer under Section 7Q and the damages levied under Section 14B of the EPF Act will also be covered as dues from the employer and the same does not form part of the Liquidation Estate and will fall outside the waterfall mechanism as stipulated under Section 53 of the IBC – Employees Provident Fund Organisation (EPFO) Vs. Sandeep D. Maheshwari, Liquidator of Shiv Mfg. Pipes Pvt. Ltd. – NCLT Mumbai Bench

January 2, 2025 / 4 minutes of reading

Interest payable by the employer under Section 7Q and the damages levied under Section 14B of the EPF Act will also be covered as dues from the employer and the same does not form part of the Liquidation Estate and will fall outside the waterfall mechanism as stipulated under Section 53 of the IBC – Employees Provident Fund Organisation (EPFO) Vs. Sandeep D. Maheshwari, Liquidator of Shiv Mfg. Pipes Pvt. Ltd. – NCLT Mumbai Bench Read Post »

When auction advertisement not indicate the sale is a Slump Sale or as a Going Concern, it is open for Auction Purchaser to treat the sale on Going Concern basis | SCC decision to sell as a slump sale basis without exploring the options provided in Liquidation Regulations 32(d) and 32(e) is against the objectives of the IBC, 2016 – Mr. Daulat Ram Jain, RP Vs. ASL Enterprises Ltd. – NCLT Kolkata Bench

January 2, 2025 / 4 minutes of reading

The Hon’ble NCLT Kolkata Bench held that the intention and the decision taken by the SCC to sell the corporate debtor on slump sale basis has not come out clearly in the advertisement when the entire factory is sold along with the plant and machinery. In such a scenario it is open for the auction purchaser to treat the sale on going concern basis, particularly when the entire plant, along with land, buildings, machineries has been sold. It is the successful auction purchaser who is in a position to decide whether he will be in a position to run the Company as a going concern or not with or without carrying out necessary repairs/refurbishing.

When auction advertisement not indicate the sale is a Slump Sale or as a Going Concern, it is open for Auction Purchaser to treat the sale on Going Concern basis | SCC decision to sell as a slump sale basis without exploring the options provided in Liquidation Regulations 32(d) and 32(e) is against the objectives of the IBC, 2016 – Mr. Daulat Ram Jain, RP Vs. ASL Enterprises Ltd. – NCLT Kolkata Bench Read Post »

As long as there is an existence of a fund by whatever name it is called which is for the use of the employee in future i.e. Provident fund or Superannuation fund, it is the workers’/employees’ money held in trust by the employer and as such cannot form a part of the liquidation estate – Nicco and Associated Companies Senior Management Superannuation Fund Vs. Vinod Kumar Kothari, Liquidator of Nicco Corporation Ltd. – NCLT Kolkata Bench

January 2, 2025 / 3 minutes of reading

In cases where the employees would not opt for being a part of such a superannuation scheme would naturally get the equal or equivalent amount along with their salaries to keep them at par with those who do, in whose case i.e. those who would opt for the scheme, this money would be deposited in the superannuation fund. In either case the employer’s liability is established and the contribution of the employees whether directly or indirectly would not form a part of the liquidation estate.

As long as there is an existence of a fund by whatever name it is called which is for the use of the employee in future i.e. Provident fund or Superannuation fund, it is the workers’/employees’ money held in trust by the employer and as such cannot form a part of the liquidation estate – Nicco and Associated Companies Senior Management Superannuation Fund Vs. Vinod Kumar Kothari, Liquidator of Nicco Corporation Ltd. – NCLT Kolkata Bench Read Post »

Whether a company petition which has been dismissed on account of withdrawal or in view of a settlement between the parties can be revived when no liberty was granted in the earlier order of dismissal? – Surya Dealtrade Pvt. Ltd. Vs. Vipul Ltd. – NCLT New Delhi Bench

January 1, 2025 / 5 minutes of reading

The Hon’ble NCLT New Delhi Bench held the object and intent of CIRP is to rescue the Corporate Debtor and to put it back to its feet. The same is not to facilitate the recovery of debt. Therefore, granting the relief being sought by the Applicant in the present application would result in turning the IBC, 2016 into a debt recovery proceeding where a party would repeatedly approach this Tribunal for recovery of the same debt.

Whether a company petition which has been dismissed on account of withdrawal or in view of a settlement between the parties can be revived when no liberty was granted in the earlier order of dismissal? – Surya Dealtrade Pvt. Ltd. Vs. Vipul Ltd. – NCLT New Delhi Bench Read Post »

If no application for insolvency has been filed against the Corporate Debtor, a petition under Section 95(1) of IBC, filed against Personal Guarantor, is not maintainable before NCLT – Tata Capital Financial Services Ltd. Vs. Arjun Agarwal – NCLT Kolkata Bench

January 1, 2025 / 7 minutes of reading

The Hon’ble NCLT Kolkata Bench held that:

(i) If the Corporate Debtor has already been resolved or even liquidated and there is no scope for further value maximization of the Corporate person, the proceedings against the personal guarantor are relegated to a modus of recovery only and not that of resolution of insolvency.
(ii) When the CIRP or liquidation proceeding is pending before a NCLT, an application relating to the Insolvency resolution or liquidation or Bankruptcy of a Corporate guarantor or Personal Guarantor, as the case may be of such Corporate Debtor, shall be filed before such NCLT ostensibly to avoid multiplicity of the judicial fora. However, when this is not so, the proceedings in our humble opinion are recovery proceedings only and not being a recovery forum, the NCLT shall not be the Adjudicating authority in such cases.

If no application for insolvency has been filed against the Corporate Debtor, a petition under Section 95(1) of IBC, filed against Personal Guarantor, is not maintainable before NCLT – Tata Capital Financial Services Ltd. Vs. Arjun Agarwal – NCLT Kolkata Bench Read Post »

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench

January 1, 2025 / 2 minutes of reading

It is well settled law that an approved Resolution plan is binding on all the stake holders and in this case, the Hon’ble Tribunal is of the view the resolution plan has been approved with payments in instalments only to the assenting financial creditors whereas the dissenting financial creditors will have to be paid in full before the assenting financial creditors are paid. We have also considered the explanation 1 of Section 30 (2) of IB Code which says that distribution in accordance with provisions of this clause shall be fair and equitable to such creditors (Operational creditors and dissenting financial creditors).

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench Read Post »

Once a petition under Section 7 of the IB Code is admitted, its withdrawal can be possible only if a compliance is made with Section 12A of the IB Code – Ravindra G. Sapkal Vs. Samata Nagari Sahkari Patsantha Maryadit – Supreme Court

December 30, 2024 / 2 minutes of reading

Once a petition under Section 7 of the IB Code is admitted, its withdrawal can be possible only if a compliance is made with Section 12A of the IB Code – Ravindra G. Sapkal Vs. Samata Nagari Sahkari Patsantha Maryadit – Supreme Court Read Post »

Section 14 of the Limitation Act cannot be applied to dilute the implication of limitation contained under Section 61 of IBC – Kalyan Muppaneni Vs. K. Computers and Anr. – NCLAT Chennai

December 30, 2024 / 55 minutes of reading

The Hon’ble NCLAT held that it could be said that the provisions of the Limitation Act as contemplated to be applied by Section 238A of I & B Code 2016, is general in its applicability and will not cover those provisions where the aspect of Limitation itself, has been self-contained and, hence it cannot be utilized where the limitation is independently prescribed under Section 61, particularly when the legislation intends that the proceedings held under the I & B Code, have to be decided within a specified time frame.

Section 14 of the Limitation Act cannot be applied to dilute the implication of limitation contained under Section 61 of IBC – Kalyan Muppaneni Vs. K. Computers and Anr. – NCLAT Chennai Read Post »