An unpaid Demand Notice is good enough to exhibit the Debtor’s inability to pay its debts for the purpose of Bankruptcy Proceedings, If a bonafide dispute is established then an Insolvency petition is not the appropriate proceeding to determine the validity of a disputed deb – Mr. Shailendra Sharma Director of R&M International Pvt. Ltd. Vs. Ercon Composites A Registered Partnership Firm – NCLAT New Delhi

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The grounds under Section 30(2) or 61(3) of the IBC are regarding testing the validity of the approved resolution plan by COC and not for approving the resolution plan which has been disapproved by the CoC in exercise of its business decision – Harkirat Singh Bedi Vs. The Oriental Bank of Commerce & Anr. – NCLAT New Delhi

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Whether the Adjudicating Authority can direct the CoC to consider the Resolution Plan of a person who was not part of CIRP? – Kalinga Allied Industries India Pvt. Ltd. Vs. Hindustan Coils Ltd. – NCLAT New Delhi

NCLAT referring Hon’ble Supreme Court in the matter of Maharashtra Seamless Limited vs Padmanabhan Venkatesh & Ors. (2020) ibclaw.in 355 NCLAT and Shrawan Kumar Agrawal Consortium Vs. Rituraj Steel Private Limited [2020] ibclaw.in 250 NCLAT held that we are of the considered view that the Adjudicating Authority has a very limited power of judicial scrutiny under Section 31 of the Code and the statutory provision does not permit the Adjudicating Authority to interfere with the commercial wisdom of the COC. Even for maximization of value of assets of the Corporate Debtor. In the impugned order Ld. Adjudicating Authority erroneously assumed that it is the duty of the Adjudicating Authority to satisfy itself that the price offer is reasonable and adequate. For this purpose, considered the liquidation value and fair value of the Corporate Debtor and price offered by successful Resolution Applicant and reached a conclusion that the Respondent No. 1’s offer is around 12% more than the offer of successful Resolution Applicant. We are of the considered view that Ld. Adjudicating Authority has exceeded his jurisdiction and indulge in quantitative analysis which is not permissible under Section 31 of the I&B Code.(p12-14)

In case of a person other than an Advocate, the Board Resolution would be required but in the event of a Demand Notice being issued by an Advocate duly instructed by his client (Operational Creditor), there is no need of requirement of authority being backed by the Board Resolution – Mohit Minerals Ltd. Vs. Nidhi Impotrade Pvt. Ltd. – NCLAT New Delhi

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Demand Notice having been returned unserved would amount to non-delivery of notice but where the Corporate Debtor who refused to accept delivery of notice, the Adjudicating Authority would not be justified in coming to conclusion that notice has not been served on the Corporate Debtor – Sri D. Srinivasa Rao Vs. Vaishnovi Infratech Ltd. – NCLAT New Delhi

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