IBC-Case Laws-High Courts

Once the claim was returned by Resolution Professional, there is no substantive claim to be included in the Resolution Plan in the absence of re-submission of the said claim | Merely because the waiver was not allowed by the NCLT while approving the Resolution Plan would not, ipso facto, resurrect the right of claim – Union of India Vs. OCL Iron and Steel Ltd. – Delhi High Court

Hon’ble Division Bench of Delhi High Court while dismissing LPA held that the appellant did not take appropriate steps in law to lay its claim in time and by prescription of law, that is the IBC, and supervening circumstances, claims not forming part of the Resolution Plan as approved, stood extinguished. Besides, the “clean slate” theory.

Once the claim was returned by Resolution Professional, there is no substantive claim to be included in the Resolution Plan in the absence of re-submission of the said claim | Merely because the waiver was not allowed by the NCLT while approving the Resolution Plan would not, ipso facto, resurrect the right of claim – Union of India Vs. OCL Iron and Steel Ltd. – Delhi High Court Read Post »

Issue of willful defaulters after moratorium under Section 96 of IBC – R.Malliga and Anr. Vs. The Deputy General Manager, State Bank of India and Anr. – Madras High Court

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Issue of willful defaulters after moratorium under Section 96 of IBC – R.Malliga and Anr. Vs. The Deputy General Manager, State Bank of India and Anr. – Madras High Court Read Post »

Can jurisdiction of the High Court under Articles 226 and 227 be invoked where the orders passed by the Arbitral Tribunal are procedural in nature? | Can Arbitral Tribunal pass the order during moratorium under Section 96 of IBC? – Lalit Mohan Vs. National Agricultural Co. Federation of India Ltd. (NAFED) – Delhi High Court

The Hon’ble High Court holds that the question of maintainability of a writ petition in relation to arbitration proceedings is well settled. The jurisdiction of the Court under Articles 226 and 227 of the Constitution of India, 1950, cannot be invoked where the orders passed by the Arbitral Tribunals are procedural in nature. The Arbitral Tribunal has clearly and specifically observed that the Tribunal shall “consider the feasibility of signing the Award, without pronouncing it, which would be kept in abeyance, pending decision on Respondent’s application.” . This clearly indicates that there is no finality on this issue. Hence, the Court does not deem fit to entertain the present petition.

Can jurisdiction of the High Court under Articles 226 and 227 be invoked where the orders passed by the Arbitral Tribunal are procedural in nature? | Can Arbitral Tribunal pass the order during moratorium under Section 96 of IBC? – Lalit Mohan Vs. National Agricultural Co. Federation of India Ltd. (NAFED) – Delhi High Court Read Post »

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court

The Hon’ble High Court finds substance in the argument of the learned counsel for the petitioner that the action of the respondent in seeking to recover the outstanding tax due to it under the Maharashtra Village Panchayat Act, 1959 payable before the initiation of CIRP cannot be sustained. The petitioner who acquired the assets of Gupta Global Resources Pvt. Ltd. (Corporate Debtor) through the liquidation process in the year 2019 has received the sale certificate on 31.08.2019 and therefore, it is unflappable that the respondent can recover its outstanding dues payable before this date. The Scheme under the IBC, definitely do not permit such an action.

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court Read Post »

It is not permissible for the Registrar, NCLT, to go into the merits of a petition filed u/s 94 or 95 of IBC and/or to decide about maintainability | The Registrar does not discharge any adjudicatory or judicial function at this stage | Receiving of insolvency petitions is ministerial and procedural in nature | Adjudicatory process starts at the stage of Section 100 of the Insolvency Code, 2016 – Buoyant Technology Constellations Pvt. Ltd. Vs. Manyata Reallty and Ors. – Karnataka High Court

Hon’ble Karnataka High Court held that the function of registering the applications filed under Section 5 of the Insolvency Code is a ministerial function and a procedural act. This stage does not store any adjudicatory process. The role of the Registrar while registering the application under Section 95 of the Code is not adjudicatory in nature and this duty of the Registrar, NCLT was in no way adjudicatory trapping. Application of judicial mind towards merits has no place in discharge of a ministerial or clerical function. For the Registrar, it is not permissible at the time of registering the petition which is filed by the debtor or creditor. Adjudicatory function of adjudicatory authority commences under Part III of the Code, 2016 after submission of a recommendatory report by the resolution professional. The Registrar at the stage of receipt of the petition filed under Section 94 or 95 of the Code by the debtor or creditor, which is a stage even prior to Section 97 and 99 of the Code can decide on the maintainability of the petition by entering into merit and thus the realm of adjudication.

It is not permissible for the Registrar, NCLT, to go into the merits of a petition filed u/s 94 or 95 of IBC and/or to decide about maintainability | The Registrar does not discharge any adjudicatory or judicial function at this stage | Receiving of insolvency petitions is ministerial and procedural in nature | Adjudicatory process starts at the stage of Section 100 of the Insolvency Code, 2016 – Buoyant Technology Constellations Pvt. Ltd. Vs. Manyata Reallty and Ors. – Karnataka High Court Read Post »

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court

Hon’ble Bombay High Court held that:

(i) The action of suspending the registration of the petitioner as RP on the basis of judgment of NCLAT, which was not challenged by the IP, is justified.
(ii) The period for which such suspension should operate is a matter within the realm of the Disciplinary Committee.
(iii) The Disciplinary Committee in the light of the jurisdiction conferred upon it by Section 220 of the Code is empowered to take into consideration all relevant aspects including the conduct of RP.

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court Read Post »

In terms of Section 31 of IBC, all demands raised against the Corporate Debtor pertaining to the period prior to the Resolution Plan effective date stand automatically extinguished in terms of approved Resolution Plan – Orissa Manganese & Minerals Ltd. Vs. State of Odisha and Ors. – Orissa High Court

Hon’ble Orissa High Court held that:
(i) Successful Resolution Applicant should start with fresh slate on the basis of the Resolution Plan approved shunning its prior status as Corporate Debtor
(ii) Upon approval of the Resolution Plan, the Corporate Debtor no more stands as the Corporate Debtor and it is only under the legal obligation as being in the management of the Corporate Debtor strictly in terms of the Resolution Plan.
(iii) In terms of Section 31 of IBC, all those impugned demands raised against the Corporate Debtor pertaining to the period prior to the Plan Effective Date stand automatically extinguished in terms of Approved Resolution Plan.

In terms of Section 31 of IBC, all demands raised against the Corporate Debtor pertaining to the period prior to the Resolution Plan effective date stand automatically extinguished in terms of approved Resolution Plan – Orissa Manganese & Minerals Ltd. Vs. State of Odisha and Ors. – Orissa High Court Read Post »

Rule 22 of the CESTAT (Procedure) Rules, 1982 is not applicable in cases where the Resolution Plan has been approved under the IBC – Patanjali Foods Ltd. Vs. Commissioner of Customs – Karnataka High Court

Hon’ble Karnataka High Court held that:

(i) The Custom Dept. not having made any claim before the IRP during the CIRP process and the demand not having been part of the resolution plan, has stood extinguished and cannot be continued.
(ii) As per Rule 22 of CESTAT (Procedure) Rules, 1982, in the event a party to the appeal dies or is adjudicated as an insolvent or in the case of a company, is being wound up, the appeal would abate.
(iii) It is clear that Rule 22 of the CESTAT (Procedure) Rules, 1982 would not be attracted in a case where the resolution plan has been approved by the IBC.

Rule 22 of the CESTAT (Procedure) Rules, 1982 is not applicable in cases where the Resolution Plan has been approved under the IBC – Patanjali Foods Ltd. Vs. Commissioner of Customs – Karnataka High Court Read Post »

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