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Landmark judgment on various provisions of IBC on Personal Insolvency | Provisions of Section 95 to Section 100 of the IBC are not unconstitutional – Dilip B Jiwrajka Vs. Union of India and Ors. – Supreme Court

/ 83 minutes of reading

Conclusion of the landmark judgment on personal insolvency as under:
(i) No judicial adjudication is involved at the stages envisaged in Sections 95 to Section 99 of the IBC;
(ii) The resolution professional appointed under Section 97 serves a facilitative role of collating all the facts relevant to the examination of the application for the commencement of the insolvency resolution process which has been preferred under Section 94 or Section 95. The report to be submitted to the adjudicatory authority is recommendatory in nature on whether to accept or reject the application;
(iii) The submission that a hearing should be conducted by the adjudicatory authority for the purpose of determining ‘jurisdictional facts’ at the stage when it appoints a resolution professional under Section 97(5) of the IBC is rejected. No such adjudicatory function is contemplated at that stage. To read in such a requirement at that stage would be to rewrite the statute which is impermissible in the exercise of judicial review;
(iv) The resolution professional may exercise the powers vested under Section 99(4) of the IBC for the purpose of examining the application for insolvency resolution and to seek information on matters relevant to the application in order to facilitate the submission of the report recommending the acceptance or rejection of the application;
(v) There is no violation of natural justice under Section 95 to Section 100 of the IBC as the debtor is not deprived of an opportunity to participate in the process of the examination of the application by the resolution professional;
(vi) No judicial determination takes place until the adjudicating authority decides under Section 100 whether to accept or reject the application. The report of the resolution professional is only recommendatory in nature and hence does not bind the adjudicatory authority when it exercises its jurisdiction under Section 100;
(vii) The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction under Section 100 for the purpose of determining whether to accept or reject the application;
(viii) The purpose of the interim-moratorium under Section 96 is to protect the debtor from further legal proceedings; and
(ix) The provisions of Section 95 to Section 100 of the IBC are not unconstitutional as they do not violate Article 14 and Article 21 of the Constitution.

Landmark judgment on various provisions of IBC on Personal Insolvency | Provisions of Section 95 to Section 100 of the IBC are not unconstitutional – Dilip B Jiwrajka Vs. Union of India and Ors. – Supreme Court Read Post »

Whether non-mentioning of date of default in part IV of the petition filed under Section 9 of IBC is fatal? – Winntus Scaffolding Pvt. Ltd. Vs. Aishwarya Business Corporation Pvt. Ltd. – NCLT Kochi Bench

/ 5 minutes of reading

The Adjudicating Authority dismissed the application u/s 9 of IBC on two grounds, (i) The Rule 6 of Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016 prescribed form 5 for filing petition under section 9 IBC 2016 by operational creditors. In the form Part IV Serial No.2 specifically required to mention the date of default, so furnishing the date of default is must. In this case the petitioner not given the date of default instead in the relevant column he mentioned the Debt due from 09.01.2019, this is the date where the 1st payment ought to have been paid. The omission to mention the date of default cannot be taken lightly specially in this case. (ii) The petitioner filed an application before MSEFC, Haryana for Arbitration on 29.07.2021. The respondent entered appearance, contesting the matter, now the proceeding is pending. After filed the application before MSEFC, the petitioner sent section 8 statutory notice dated 20.08.2021. If the application is filed before MSEFC and proceeding is not initiated it is different, here proceeding started and pending even before the issuance of notice under section 8 IBC 2016. As per section 8(2)(a) of IBC 2016 arbitration proceeding filed before the receipt of section 8 notice is amounts to existence of dispute.

Whether non-mentioning of date of default in part IV of the petition filed under Section 9 of IBC is fatal? – Winntus Scaffolding Pvt. Ltd. Vs. Aishwarya Business Corporation Pvt. Ltd. – NCLT Kochi Bench Read Post »

List of landmark judgments on Place (seat & venue) of Arbitration – Honey Bee Multitrading Pvt. Ltd. Vs. Ruchi Soya Industries Ltd. – Bombay High Court

/ 65 minutes of reading

The succinct distinction between ‘venue’ and ‘seat’ of arbitration is one of the most hotly debated aspects of arbitration in India, though for some time a quietus was put, to it, by a Five-Judge Bench of the Hon’ble Supreme Court in the case of Bharat Aluminium Company (BALCO) Vs. Kaiser Aluminium Technical Services INC (2017) ibclaw.in 246 SC, but unfortunately after a decade of it’s authoritative pronouncement, once again the debate between the ‘venue’ and ‘seat’ has reappeared, in the wake of the latest decision of the Supreme Court in the case of Ravi Ranjan Developers Pvt. Ltd. Vs. Aditya Kumar Chatterjee (2022) ibclaw.in 173 SC.

This enigma is placed before me through the present case, where the counter arguments are advanced on issue, whether prescription of mere, ‘venue’ in the arbitration clause contained in the ‘Lease Agreement’ would confer jurisdiction on this Court to appoint an Arbitrator, as prayed in the application, particularly when the subject matter of the suit would fall outside the jurisdiction of this Court.

List of landmark judgments on Place (seat & venue) of Arbitration – Honey Bee Multitrading Pvt. Ltd. Vs. Ruchi Soya Industries Ltd. – Bombay High Court Read Post »

Shifting the entire blame on Resolution Professional on grounds of non-performance of duty and making him the scapegoat does not appear to be justified – Shri Guru Containers Vs. Jitendra Palande – NCLAT New Delhi

/ 35 minutes of reading

NCLAT held that though the scope of CIRP related work became limited and restricted by the fact that progress got stonewalled due to lack of flow of information and lack of claims, diligence on the part of the IRP in proceeding with the CIRP cannot be found to be wanting. Shifting the entire blame on the IRP on grounds of non-performance of duty and making him the scapegoat does not appear to be justified. It is equally important for the creditors to play a catalytic role in the insolvency resolution process given the present regime of creditor-driven IBC. The rigours of similar standards of discipline should also apply on the creditors. This is clearly a case where the CIRP process was being hindered due to want of cooperation and participation from the creditors. The conduct of the Operational Creditor in the present case is deprecatory in that once the CIRP process had commenced, the Operational Creditor went into a sleeping mode. This position has been further aggravated by the fact that it was the Appellant/Operational Creditor who had triggered this judicial process and then abdicated himself from all responsibilities. That the Operational Creditor did not seem interested in resolution of the Corporate Debtor is evident from the fact that till date no claim has been filed with the IRP.

Shifting the entire blame on Resolution Professional on grounds of non-performance of duty and making him the scapegoat does not appear to be justified – Shri Guru Containers Vs. Jitendra Palande – NCLAT New Delhi Read Post »

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