IBC-Case Laws-High Courts

Unless a Court is satisfied beyond a reasonable doubt, the jurisdiction under the Contempt of Courts Act, 1971, ought not to be exercised – Mr. Rajan Chadha and Anr. Vs. Mr. Sanjay Arora and Anr. – Delhi High Court

Hon’ble Delhi High Court held that:
(i) To punish a contemnor, the disobedience should be willful. Element of willingness is an indispensable requirement to hold a party guilty of contempt. It has been held time and again that contempt jurisdiction is a powerful weapon in the hands of the Courts, and the said proceedings being quasi-criminal in nature, the standard of proof required in these proceedings, is beyond all reasonable doubt.
(ii) Since the company is undergoing CIRP, all the assets and management of the company are with the Resolution Professional. Further, the liability of loan installments, in the form of claim submitted by the South Indian Bank, is also with the Resolution Professional. Thus, the respondent no. 1 has no control over the assets, management and liabilities of the Company. Thus, it is manifest that the R1 has been unable to pay the EMIs to the bank due to his financial inability and constraints, due to circumstances, as brought forth before this Court.

Unless a Court is satisfied beyond a reasonable doubt, the jurisdiction under the Contempt of Courts Act, 1971, ought not to be exercised – Mr. Rajan Chadha and Anr. Vs. Mr. Sanjay Arora and Anr. – Delhi High Court Read Post »

The applicability of interim moratorium under Section 96 of IBC, 2016, on the proceedings initiated by a Bank under SARFAESI Act, cannot be excluded merely because the bank has taken possession prior to commencement of the proceedings against Personal Guarantor under the IBC, 2016 – Sanjay Dhingra Vs. IDBI Bank Ltd. and Ors. – Delhi High Court

Hon’ble Delhi High Court held that after commencement of the insolvency proceedings under the IBC, 2016, against the petitioner, in his capacity as a personal guarantor with respect to default of a loan account, the interim moratorium shall be applicable to all the debts, including the debt owed by the petitioner to the respondent-bank, in his capacity as a personal guarantor, for which property in question was mortgaged by the petitioner, against which SARFAESI proceedings have been initiated by the bank.

The Hon’ble Court also held that judgment of Kerala High Court in the case of Jeny Thankachan Vs. Union of India and Ors. (2023) ibclaw.in 918 HC does not apply to the facts and circumstances of the present case.

The applicability of interim moratorium under Section 96 of IBC, 2016, on the proceedings initiated by a Bank under SARFAESI Act, cannot be excluded merely because the bank has taken possession prior to commencement of the proceedings against Personal Guarantor under the IBC, 2016 – Sanjay Dhingra Vs. IDBI Bank Ltd. and Ors. – Delhi High Court Read Post »

High Court allows Ex-Director of Corporate Debtor to inspect of the record available with Resolution Professional – Shantanu Prakash Vs. State Bank of India and Ors. – Delhi High Court

In this case, SCNs issued by Bank to ex-director of Corporate Debtor for reporting of Fraud, however, complete documents, on the basis of which SCNs have been issued have not been provided.

Hon’ble High Court held that it is settled law that fair procedure and the Principles of Natural Justice require that the requisite documents, which form the basis of a SCN, ought to be provided to the concerned party in order to enable such party to submit a proper reply to answer all the allegations raised against it. No party can be expected to respond to a SCN in an effective manner, in the absence of the underlying documents, which form the basis of the said SCN.

Further, Hon’ble High Court directs that the petitioner shall be allowed inspection of the records of the company, as available with the lead bank, i.e., SBI. Since, record of the company is also stated to be in the possession of the RP, it is directed that the petitioner shall also be allowed to inspect of the record of the company, as available with the RP. Upon inspection of the record of the company, the petitioner shall state the specific documents that are required from the record of the company, that form the basis of the SCNs.

High Court allows Ex-Director of Corporate Debtor to inspect of the record available with Resolution Professional – Shantanu Prakash Vs. State Bank of India and Ors. – Delhi High Court Read Post »

Merely because of initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 the signatory of the cheque cannot escape from his liability | Section 96 of IBC does not bar on Court’s direction to deposit an amount as a condition precedent for suspension of sentence under NI Act, 1881 – Anurodh Mittal Vs. Rehat Trading Company and Anr. – Madhya Pradesh High Court

Hon’ble High Court refers P. Mohanraj & Ors. v. Shah Brothers Ispat Pvt. Ltd. (2021) ibclaw.in 24 SC and Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation of India Ltd. (2023) ibclaw.in 30 SC judgments and holds that considering the totality of facts and circumstances of the case and in view of the fact that merely because of initiation of proceedings under the Code, 2016 the signatory of the cheque cannot escape from his liability, it is held that conviction recorded by Trial Court was not bad on account of initiation of proceedings under the Code, 2016.

Merely because of initiation of proceedings under the Insolvency and Bankruptcy Code, 2016 the signatory of the cheque cannot escape from his liability | Section 96 of IBC does not bar on Court’s direction to deposit an amount as a condition precedent for suspension of sentence under NI Act, 1881 – Anurodh Mittal Vs. Rehat Trading Company and Anr. – Madhya Pradesh High Court Read Post »

The Electricity dues for the periods prior to approval of the Resolution Plan and on no claim being made would stand extinguished and Section 56 of the Electricity Act will not be attracted – Reliance Infratel Ltd. and Anr. Vs. State of Meghalaya and Ors. – Meghalaya High Court

Hon’ble High Court held that the dues claimed by the respondent No. 1, are for the periods prior to the effective date i.e. 22.12.2022, which on the approval of the Resolution Plan, on no claim being made by the respondent No. 2, would therefore stand extinguished. In the considered view of this Court, Section 56 of the Electricity Act will not be attracted, as it is not a case where the petitioner No. 1, after the effective date, has neglected to pay any charge of electricity, or that any amount is due.

The Electricity dues for the periods prior to approval of the Resolution Plan and on no claim being made would stand extinguished and Section 56 of the Electricity Act will not be attracted – Reliance Infratel Ltd. and Anr. Vs. State of Meghalaya and Ors. – Meghalaya High Court Read Post »

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