Zoom Communications Pvt. Ltd. Vs. M/s Par Excellence Real Estate Pvt. Ltd.

NCLAT upholds Show Cause Notice issued under Section 65 of IBC – Zoom Communications Pvt. Ltd. Vs. M/s. Par Excellence Real Estate Pvt. Ltd. – NCLAT New Delhi

NCLAT held that the present case are considering the initiation of the CIRP, the Adjudicating Authority had sufficient reason to believe that debt itself is doubtful. No error has been committed by the Adjudicating Authority in refusing to initiate the CIRP on such suspicious debt. Thus, the order of the Adjudicating Authority refusing to initiate CIRP cannot be faulted and we affirm the said order passed by the Adjudicating Authority.

NCLAT upholds Show Cause Notice issued under Section 65 of IBC – Zoom Communications Pvt. Ltd. Vs. M/s. Par Excellence Real Estate Pvt. Ltd. – NCLAT New Delhi Read Post »

CIRP cannot be initiated on sham transaction entered between related parties – Zoom Communications Pvt. Ltd. Vs. M/s Par Excellence Real Estate Pvt. Ltd. – NCLT New Delhi Bench Court-II

The Adjudicating Authority observed that both the Applicant Company, which has claimed the operational debt based on an invoice for a loan procured for the Corporate Debtor and the Corporate Debtor against whom the Applicant is seeking to initiate CIRP were having common Director. By way of visiting the records at the MCA Website and on piercing the corporate veil, it is clear that not only both the Applicant Company as well as the Corporate Debtor were ‘related party’ due to common Directorship on the date of the invoice but also here is a case, where Director of the Corporate Debtor (in the capacity of Director of the Applicant Company) has procured a loan for his own Company and is charging procurement fee therefor. In view of the aforesaid finding, we are of the considered view that the aforesaid transaction, which had taken place between the two related Companies in the year 2015 is sham and the CIRP cannot be initiated on the basis of such a sham transaction.

CIRP cannot be initiated on sham transaction entered between related parties – Zoom Communications Pvt. Ltd. Vs. M/s Par Excellence Real Estate Pvt. Ltd. – NCLT New Delhi Bench Court-II Read Post »

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