IBC-Case Laws-Supreme Court

Can an application under Section 95(1) of IBC be filed jointly with other Creditors/Resolution Professional for initiating an insolvency resolution process? – Arvind Dham Vs. State Bank of India and Anr. – Supreme Court

Hon’ble Supreme Court (3Judge Bench) has dismissed an appeal filed against NCLAT’s judgment which was on the issue whether Section 95(1) empowers the creditor to apply either by himself, or jointly with other creditors, or through a resolution professional for initiating an insolvency resolution process under this section by submitting an application to the Adjudicating Authority.

Can an application under Section 95(1) of IBC be filed jointly with other Creditors/Resolution Professional for initiating an insolvency resolution process? – Arvind Dham Vs. State Bank of India and Anr. – Supreme Court Read Post »

Can a New Resolution Applicant be brought in or substituted with another Resolution Applicant, after approval of a Resolution Plan u/s 31 of IBC? – UV Asset Reconstruction Company Ltd. and Anr. Vs. Aircel Ltd. – Supreme Court

A 3-Judge Bench of Hon’ble Supreme Court has upheld the decision of NCLAT where NCLAT fully agreed with the reasons given by the Adjudicating Authority for rejecting the application filed by the Appellant for substituting another Resolution Applicant in place of the Appellant. When plan of the Appellant as Resolution Applicant was approved, the Adjudicating Authority rightly refused to substitute another Resolution Applicant, in which order no infirmity is found

Can a New Resolution Applicant be brought in or substituted with another Resolution Applicant, after approval of a Resolution Plan u/s 31 of IBC? – UV Asset Reconstruction Company Ltd. and Anr. Vs. Aircel Ltd. – Supreme Court Read Post »

Can Dissenting Secured Financial Creditor insist payment of amount as per security interest?, Supreme Court dismisses appeal – Paridhi Finvest Pvt. Ltd. Vs. Value Infracon Buyers Association and Anr. – Supreme Court

A three-Judge Bench of Hon’ble Supreme Court has dismissed an appeal filed against an order of NCLAT where Hon’ble NCLAT held that dissenting Secured Financial Creditor cannot insist payment of amount as per security interest, when there is resolution of Corporate Debtor through a Resolution Plan.

The NCLAT also held that the Resolution Plan submitted by Flat Buyers Association cannot be faulted on the ground that CoC have chosen not to take any performance security.

Hon’ble Court dismissed the appeal on the ground that no substantial question of law is involved in the appeal.

Can Dissenting Secured Financial Creditor insist payment of amount as per security interest?, Supreme Court dismisses appeal – Paridhi Finvest Pvt. Ltd. Vs. Value Infracon Buyers Association and Anr. – Supreme Court Read Post »

While deciding the issue of whether a debt is a Financial Debt or an Operational Debt under IBC, it is necessary to ascertain what is the real nature of the transaction – Global Credit Capital Ltd. and Anr. Vs. Sach Marketing Pvt. Ltd. and Anr. – Supreme Court

In this landmark decision, Hon’ble Supreme Court ruled that:

(i) There cannot be a debt within the meaning of Section 3(11) of the IB Code unless there is a claim within the meaning of Section 3(6) of thereof;
(ii) The test to determine whether a debt is a financial debt within the meaning of Section 5(8) is the existence of a debt along with interest, if any, which is disbursed against the consideration for the time value of money. The cases covered by categories (a) to (i) of sub-section (8) must satisfy the said test laid down by the earlier part of Section 5(8);
(iii) While deciding the issue of whether a debt is a financial debt or an operational debt arising out of a transaction covered by an agreement or arrangement in writing, it is necessary to ascertain what is the real nature of the transaction reflected in the writing; and
(iv) Where one party owes a debt to another and when the creditor is claiming under a written agreement/ arrangement providing for rendering ‘service’, the debt is an operational debt only if the claim subject matter of the debt has some connection or co-relation with the ‘service’ subject matter of the transaction.

While deciding the issue of whether a debt is a Financial Debt or an Operational Debt under IBC, it is necessary to ascertain what is the real nature of the transaction – Global Credit Capital Ltd. and Anr. Vs. Sach Marketing Pvt. Ltd. and Anr. – Supreme Court Read Post »

Whether the right of subrogation shall stand extinguished after approval of the Resolution Plan under the Code or the same will continue to vest with Personal Guarantors in terms of the Indian Contract Act, 1872 – Sapna Aggarwal Vs. Asian Colour Coated Ispat Ltd. and Ors. – Supreme Court

Hon’ble Supreme Court upholds the decision of NCLAT where it was held that Doctrine of subrogation is an absolute right of Guarantor, however, the issue becomes different, if it falls within the domain of IBC. A Resolution Plan itself can vary and modify the rights of Creditors and Guarantors and provide for continuation of Personal Guarantees which do not need any confirmation from Personal Guarantor.

Whether the right of subrogation shall stand extinguished after approval of the Resolution Plan under the Code or the same will continue to vest with Personal Guarantors in terms of the Indian Contract Act, 1872 – Sapna Aggarwal Vs. Asian Colour Coated Ispat Ltd. and Ors. – Supreme Court Read Post »

Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code | Any amendment to Section 435 of Companies Act, 2013, after the date on which the IBC came into effect would not have any effect on the provisions of Section 236(1) of the Code | Provision with regard to Special Court under Section 236 is a case of ‘legislation by incorporation’ and not ‘legislation by reference’ – Insolvency and Bankruptcy Board of India (IBBI) Vs. Satyanarayan Bankatlal Malu and Ors. – Supreme Court

In this case, the question before the Hon’ble Supreme Court was whether the Special Court under the Code (Section 236 of IBC) would be as provided under Section 435 of the Companies Act as it existed at the time when the Code came into effect, or it would be as provided under Section 435 of the Companies Act after the 2018 Amendment.

The Hon’ble Court:

(i) Interpreted Section 236 of IBC and Section 435 of Companies Act, 2013 with various amendments.
(ii) Listed distinction between ‘legislation by reference’ and ‘legislation by incorporation’.
(iii) Quashed and set aside the order of Bombay High Court reported in (2022) ibclaw.in 40 HC.

Special Court presided by a Sessions Judge or an Additional Sessions Judge will have jurisdiction to try the complaint under the Code | Any amendment to Section 435 of Companies Act, 2013, after the date on which the IBC came into effect would not have any effect on the provisions of Section 236(1) of the Code | Provision with regard to Special Court under Section 236 is a case of ‘legislation by incorporation’ and not ‘legislation by reference’ – Insolvency and Bankruptcy Board of India (IBBI) Vs. Satyanarayan Bankatlal Malu and Ors. – Supreme Court Read Post »

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