CIRP-02A

Vijay Kumar Singhania Vs. Bank of Baroda and Anr. – Supreme Court

Hon’ble Supreme Court has affirmed the decision of the NCLAT where NCLAT held that IU Regulation 20 although has been amended w.e.f 14.06.2022 but there is no amendment either in Section 7 of the IBC which empowers Financial Creditor to file record of the default recorded in the information utility or such other record and default as may be specified or in Rules 2016 or CIRP Regulations 2016. The statutory scheme, thus, contemplates furnishing record of default by the financial creditor as recorded with the information utility or such other record or evidence of default as may be specified.
The record of default for purposes of Section 7(3)(a) has been specified by Regulation 2A of the CIRP Regulations, 2016. Thus, record of default recorded with the information utility is not the only document which has to be furnished by financial creditor. Financial creditor is at liberty to submit such other record of default as may be specified which is a statutory provision contained in Section 7. Even after amendment of IU Regulation 20 by insertion of Regulation 20(1A) w.e.f 14.06.2022, Financial Creditor is entitled to file evidence of record of default as contemplated by CIRP Regulation 2A r/w Rule 4 of the AAA Rules, 2016.

Vijay Kumar Singhania Vs. Bank of Baroda and Anr. – Supreme Court Read Post »

Filing of default information with Information Utility in compliance of Rule 20(1A) of IBBI (Information Utilities) Regulations 2017 is not mandatory compliance | Whether simultaneous CIRP can be initiated against Principal Borrower and its Corporate Guarantor – State Bank of India Vs. Anupriya Management Pvt. Ltd. – NCLT Kolkata Bench

Hon’ble NCLT Kolkata Bench hold that:
(i) Financial Creditor can also prove default with own records as provided in Sec 7(3) of the Code which says that the Financial Creditor shall, along with the application furnish the record of the default recorded with the information utility or such other record or evidence of default as may be specified.
(ii) The Financial Creditor can produce certified copies of the entries in the relevant account in the banker’s book as defined in clause (3) of Section 2 of the Bankers Book Evidence Act 1891, in this Financial Creditor has furnished the same and thus no fault can be attributed.
(iii) The Corporate Debtor has built a few apartments on the very same land as a Joint venture Partner and is in the process of seeking Liquidation. When the Corporate Debtor himself could not seek any resolution plan as a builder, the question of the Corporate Guarantor getting Resolution Plan does not arise.

Filing of default information with Information Utility in compliance of Rule 20(1A) of IBBI (Information Utilities) Regulations 2017 is not mandatory compliance | Whether simultaneous CIRP can be initiated against Principal Borrower and its Corporate Guarantor – State Bank of India Vs. Anupriya Management Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Whether filing of Record of Default(RoD) of Information Utility is mandatory? and without obtaining an Authentication of Default(AoD) as per IU Regulation 21, no application under Sec. 7 can be filed by Financial Creditor? – Vijay Kumar Singhania Vs. Bank of Baroda and Anr. – NCLAT New Delhi

In this landmark judgment, Hon’ble NCLAT, bench comprising of three members, held that:
(i) IU Regulation 20 although has been amended w.e.f 14.06.2022 but there is no amendment either in Section 7 of the IBC which empowers Financial Creditor to file record of the default recorded in the information utility or such other record and default as may be specified or in Rules 2016 or CIRP Regulations 2016.
(ii) The statutory scheme contemplates furnishing record of default by the financial creditor as recorded with the information utility or such other record or evidence of default as may be specified.
(iii) Record of default recorded with the information utility is not the only document which has to be furnished by financial creditor.
(iv) Regulations framed by the Board as per Section 240(1) has to be consistent with provisions of the Code and the Rules. When Section 240 itself provides that regulations have to be consistent with provision of Code and Rules, no regulation can be implemented or enforced which is not in consonance with the Code and the Rules.
(v) If IU Regulation 20(1A) is to be read as Regulation now mandating the Financial Creditor to file only the record of default in the information utility, the said Regulation will not be consistent with provision of Section 7(3) of the Code and AAA Rule 4 which provides that what documents have to be filed by the Financial Creditor.
(vi) IU Regulation 20(1A) cannot be read to mean that after the said amendment brought in regulation w.e.f 14.06.2022 an application filed under Section 7 which is not supported by information of default from an information utility is to be rejected and if the Financial Creditor has filed other evidence to prove default which is contemplated by the AAA Rules, 2016 and the CIRP Regulations, 2016, the said application has not to be considered.
(v) Filing of counter claim or money suit shall not absolve the Appellant from its liability to discharge its debt and if there is a financial debt which is due and default is committed by the Corporate Debtor proceedings under Section 7 can be initiated. Mere filing of the counter claim or money suit cannot lead to dismissal of Section 7.

Whether filing of Record of Default(RoD) of Information Utility is mandatory? and without obtaining an Authentication of Default(AoD) as per IU Regulation 21, no application under Sec. 7 can be filed by Financial Creditor? – Vijay Kumar Singhania Vs. Bank of Baroda and Anr. – NCLAT New Delhi Read Post »

The initial onus lies on the Financial Creditor to establish that there is a debt and it shall be proved by submitting the “ROD” issued by NESL and in the absence of which by relying on the documents available with them for initiation of CIRP – Reliance Commercial Finance Ltd. Vs. SKIL Shipyard Holdings Pvt. Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that it is well settled that the initial onus lies on the Financial Creditor to establish that there is a debt and it shall be proved by the Financial Creditor by submitting the “ROD” issued by NESL and in the absence of which by relying on the documents available with them for initiation of CIRP. Further, the Section 215 governs submission of financial information to an “information utility”. This record of information is a conclusive proof about the occurrence of a default. In the present matter, the Financial Creditor has not produced any Record of Default in the form of NESL Report, to corroborate the status of the loans and default in the present case.

The initial onus lies on the Financial Creditor to establish that there is a debt and it shall be proved by submitting the “ROD” issued by NESL and in the absence of which by relying on the documents available with them for initiation of CIRP – Reliance Commercial Finance Ltd. Vs. SKIL Shipyard Holdings Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Rejoinder was filed subsequently amendments in CIRP Regulation 2A shall not put any statutory obligation on the Appellant to file the documents of evidence of default as provided in CIRP Regulation 2A – Abhijit Sinha Vs. Asset Reconstruction Company (India) Ltd. – NCLAT New Delhi

NCLAT held that CIRP Regulation 2A cannot come to the help of the Appellant in any manner since the Application was filed in 2019, at that time Regulation 2A was not there. The Financial Creditor was not obliged to comply the Regulation. The mere fact that Rejoinder was filed subsequently shall not put any statutory obligation on the Appellant to file the documents of evidence of default as provided in Regulation 2A. It also held that the question under admission of Section 7 Application is not as to what is correct liability of the Corporate Debtor when admission was there that the amount of more than One Crore was due, it was sufficient for admission of Section 7 Application.

Rejoinder was filed subsequently amendments in CIRP Regulation 2A shall not put any statutory obligation on the Appellant to file the documents of evidence of default as provided in CIRP Regulation 2A – Abhijit Sinha Vs. Asset Reconstruction Company (India) Ltd. – NCLAT New Delhi Read Post »

The balance sheet, brought on record for acknowledgement under Section 18 before the AA while deciding the question of limitation, cannot be ignored simply on the ground that it is not pleaded in the Application filed in Form-1 for initiation of the CIRP – Vidyasagar Prasad Vs. UCO Bank – NCLAT New Delhi

The plea of Section 18 of the Limitation Act not having been raised by the Financial Creditor in the Application filed under Section 7 cannot come to the rescue of the Appellant’s in the facts of the case. It is further observed that if the documents constituting acknowledgement of their debt had not been brought on record, the Application filed under Section 7 of the Code would be liable to be dismissed. Therefore, in the instant case, the balance sheet that has been brought on record in the instant case before the Adjudicating Authority shall be taken into consideration while deciding the question of limitation and default on the part of the Corporate Debtor. The said documents cannot be ignored simply on the premise that it is not pleaded in the Application filed in Form-1 for initiation of the Corporate Insolvency Process.

The balance sheet, brought on record for acknowledgement under Section 18 before the AA while deciding the question of limitation, cannot be ignored simply on the ground that it is not pleaded in the Application filed in Form-1 for initiation of the CIRP – Vidyasagar Prasad Vs. UCO Bank – NCLAT New Delhi Read Post »

The burden of proving occurrence of default and application filed under Section 7 of the IBC is within the period of limitation, is entirely on Financial Creditor | Approves the view taken by the NCLAT in Palogix Infrastructure Pvt. Ltd. v. ICICI Bank Ltd. – Rajendra Narottamdas Sheth & Anr. Vs. Chandra Prakash Jain & Anr. – Supreme Court

This judgment covers:

A. Maintainability of the application under Section 7 of IBC when filed by a Power of Attorney Holder and also, Hon’ble Supreme Court approves the view taken by the NCLAT in Palogix Infrastructure Pvt. Ltd. v. ICICI Bank Ltd. (2017) ibclaw.in 16 NCLAT.
B.1 Applicability of Limitation Act in IBC proceedings.
B.2 Section 18 of the Limitation Act is applicable to applications filed under Section 7 of the Code.
B3. Adjudicating Authority is duty-bound to scrutinise application filed under Section 7 of IBC.
B.4 Burden of proving occurrence of the default and the period of limitation is entirely on the Financial Creditor.

The burden of proving occurrence of default and application filed under Section 7 of the IBC is within the period of limitation, is entirely on Financial Creditor | Approves the view taken by the NCLAT in Palogix Infrastructure Pvt. Ltd. v. ICICI Bank Ltd. – Rajendra Narottamdas Sheth & Anr. Vs. Chandra Prakash Jain & Anr. – Supreme Court Read Post »

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