Omkara Assets Reconstruction Pvt. Ltd. Vs. Panda Technologies India Pvt. Ltd. – NCLT Indore Bench
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Hon’ble Delhi High Court issues directions to IBBI to frame/finalise a code of conduct/guidelines in accordance with its stand set out in the instant case, principles mentioned hereinabove and as per other relevant considerations, within a reasonable period of time, preferably, within three months from the date of the passing of this judgment, for the effective functioning of the CoC, without diluting the sanctity of the ‘commercial wisdom’ of the CoC and the legislative intent of the IBC.
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In this important judgment on period of limitation for a decree passed by DRT, the following issues are before Hon’ble Supreme Court:
(i) Date of default in case of the recovery certificate issued by DRT
(ii) Can an acknowledgement of debt made after filing of CIRP application under Section 7 of the IBC extend the period of limitation as Section 18 of the Limitation Act, 1963?
(iii) Can settlement proposed during CIRP application pending for admission be treated as an acknowledgment under Section 18 of the Limitation Act
(iv) Doctrine of election: between the fora for enforcement of debt under the Recovery of Debts and Bankruptcy Act, 1993 and initiation of CIRP under the IBC.
(v) Is the period of limitation twelve years for enforcement of a decree as per Article 136 of the schedule of Limitation Act, 1963.
In this case, the major objection of the Resolution Professional is that there is no Express Agreement between the Corporate Debtor and the respondent with regard to the set off of the debit balances with the credit balances. Further, under the IBC, 2016, there is no provision for setting off the balance between a creditor and corporate debtor.
The Adjudicating Authority held that netting off should be allowed in keeping with observations made in the foregoing paragraphs and especially in view of the treatment reflected in the books of accounts of the corporate debtor while determining the liability of the parties with regard to the purchase and sale of sugar. As on the date of initiation of CIRP, after allowing netting off, there is a net payable to the respondent in the accounts of the corporate debtor. Thus, the prayer in the present application for payment of Rs. 69.76 Crores to the corporate debtor plus interest cannot be acceded to. In the result, the application is dismissed and disposed of accordingly.(p32)
NCLAT held that having regard to the ratio of the Judgement in Jet Aircraft Maintenance Engineers Welfare Association (2022) ibclaw.in 861 NCLAT of this Tribunal, upheld by the Hon’ble Apex Court, this Tribunal is of the earnest view that PF and Gratuity is to be paid in full as per the provisions of EPF and NP Act, 1952 and payment of Gratuity Act, 1972. Since admittedly the amounts paid are only 35.13% having treated them as Secured Creditors, we are of the considered view that indeed there was a violation of the provisions of Section 30(2) of the Code, with respect to the payment of PF and Gratuity only.
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Hon’ble Supreme Court held that the standard with reference to which a case of a pre-existing dispute under the IBC must be employed cannot be equated with even the principle of preponderance of probability which guides a civil court at the stage of finally decreeing a suit. Once this subtle distinction is not overlooked, we would think that the NCLAT has clearly erred in finding that there was no dispute within the meaning of the IBC.
Rajratan Babulal Agarwal Vs. Solartex India Pvt. Ltd. & Ors. – Supreme Court Read Post »
Hon’ble High Court set aside decision of the DRAT and held that while dealing with a challenge to the auction of the secured asset, the question that needs to be asked and answered is whether there is any real prejudice suffered by the borrower due to adoption of the method complained of, as not being in conformity with the Rules. If there is any confusion amongst the two documents regarding the modalities for sale of the secured asset, the terms of sale of the secured assets that are in consonance with the relevant Rules, and which further the objective of the SARFAESI Act (i.e., to recover the dues of the secured creditor), must be preferred. If the auction purchaser tenders the cheque on the same day, or even the following day, it is to be presumed that he has the financial capacity to ensure that the cheque would be honoured upon presentation. Rule 9(3) and 9(4) of the Security Interest (Enforcement) Rules, 2002 make it evident that there is no bar on the mode of payment through which a payment has to be tendered by the auction purchaser. Hence, the acceptance of cheque dated 01.09.2018 of the 15% amount, and encashment thereof by the respondent no.4 is in compliance with Rule 9(3) and Rule 9(4) of the Security Interest (Enforcement) Rules, 2002. Even if it were to be accepted that the respondent Nos.4 & 5 delayed the encashment of the said cheque, that delay, if any, cannot be to the prejudice of the petitioner, who had tendered the same in time. There was no mandatory requirement for the Petitioner to make payment of the 15% amount by way of DD/RTGS/NEFT only.