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In case of assignment of the debt during the course of pendency of CIRP petition, Assignee is entitled to all rights exercisable under the IBC and enjoys the locus to file the restoration application before the Adjudicating Authority – Raj Radhe Finance Ltd. Vs. Shrinathji Spintx Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that when NCLT Rule 2(4) defines “applicant” to mean a petitioner or an appellant or any other person or entity capable of making an application including an interlocutory application or a petition or an appeal under the IBC. Tested against this definition of an “applicant”, let us now see whether the Appellant fits into this definition of an “applicant”. An Appellant who by virtue of an assignment agreement has already stepped into the shoes of the original petitioner.

In case of assignment of the debt during the course of pendency of CIRP petition, Assignee is entitled to all rights exercisable under the IBC and enjoys the locus to file the restoration application before the Adjudicating Authority – Raj Radhe Finance Ltd. Vs. Shrinathji Spintx Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Summary of Go Airlines insolvency judgement under Section 10 of IBC – Go Airlines (India) Ltd. – NCLT Principal Bench

The Adjudicating Authority admitted the CIRP application u/s 10 of IBC and held that: (i) before the commencement of CIRP, an Application under Sections 7 and 9 are in personam i.e., a litigation between two parties, where notice to the Respondent/Corporate Debtor is a matter of right.
(ii) no express provision in the law, which necessitates the issue of notice or service of a copy of the Section 10 Application to the Creditor(s).
(iii) in Section 10 proceedings, though there is no mandatory requirement of issuing notice to the Creditor(s) at the pre-admission stage, rather giving notice to the Creditor(s) is a matter of discretion to be exercised on a case-to-case basis on valid grounds. Wherever there is a clear apprehension of deterioration of assets of the Corporate Applicant/Debtor and larger public interest is involved, issuance of notice at the pre-admission stage cannot be claimed as a matter of right.
(iv) Section 65 only uses the word “initiates”, and does not make any distinction like the stage of pre-admission or post-admission of CIRP.
(v) Section 65 of IBC can be resorted by an aggrieved party at any stage, be it pre-admission or post-admission. Accordingly, we conclude that there is no bar in entertaining/considering/adjudicating a Section 65 Application after the initiation of the CIRP.
(vi) The IRP also shall ensure that retrenchment of employees is not resorted to as a matter of course. In any event, any such decision/event should be brought to the attention of this Adjudicating Authority.

Summary of Go Airlines insolvency judgement under Section 10 of IBC – Go Airlines (India) Ltd. – NCLT Principal Bench Read Post »

Financial Debt in absent of agreement and amount advanced to the Corporate Debtor is against the time value of money – M/s VRG Healthcare Pvt. Ltd. Vs. M/s VRG Infrastructure Pvt. Ltd. – NCLAT New Delhi

NCLAT held that we agree with the findings given by the Adjudicating Authority that the Appellant has not produced any agreement between the Appellant and the Respondent that any interest would be payable by the Respondent/Corporate Debtor against the alleged loan. Further, the Adjudicating Authority rightly come to the conclusion that in order to qualify the debt to be a ‘financial debt’, it is necessary that the amount advanced to the Corporate Debtor is against the time value of money, which is totally absent in the present matter. Further, it was held that since the Appellant is not a financial creditor as the Appellant has not disbursed money against the consideration for the time value. Accordingly, the claim of the Appellant is not a ‘financial debt’ within the meaning of Section 5(8) of the IBC. Keeping in view of the aforenoted, we do not find any merit in the Appeal to interfere with the order impugned passed by the Adjudicating Authority.

Financial Debt in absent of agreement and amount advanced to the Corporate Debtor is against the time value of money – M/s VRG Healthcare Pvt. Ltd. Vs. M/s VRG Infrastructure Pvt. Ltd. – NCLAT New Delhi Read Post »

Whether experience of self-employed and running a Consultancy and Valuation business is considered for management expertise as provided under Regulation 5(3)(c)(iii)(b) or (c) of Insolvency Professional Regulations, 2016 – Mr. Arvind Kumar Agrawal Vs. Insolvency & Bankruptcy Board of India (IBBI) – Madhya Pradesh High Court

The petitioner is aggrieved by the order dated 18.11.2021, passed by Insolvency & Bankruptcy Board of India (IBBI), whereby the petitioner’s application for grant of Certificate of Registration as an Insolvency Professional (IP) under Regulation 7 of the Insolvency Professional Regulations, 2016 has been rejected by the Whole Time Member of IBBI on the ground that the petitioner is self-employed and is running a Consultancy and Valuation business and does not have the managerial experience as a salaried employee.

Whether experience of self-employed and running a Consultancy and Valuation business is considered for management expertise as provided under Regulation 5(3)(c)(iii)(b) or (c) of Insolvency Professional Regulations, 2016 – Mr. Arvind Kumar Agrawal Vs. Insolvency & Bankruptcy Board of India (IBBI) – Madhya Pradesh High Court Read Post »

Case on abnormal high rate of interest/ exorbitant maximum high rate of interest in claim during Liquidation Process – JM Financial Asset Reconstruction Company Ltd. Vs. Mr. Pradeep Kumar Kabra Liquidator for Pacific Pipe Systems Pvt. Ltd. – NCLAT New Delhi

NCLAT upheld decision of the Adjudicating Authority holding that Section 39 of the Code empowers the Liquidator to verify the claim and he has full authority to ask for production of any other documents or evidence which he feels necessary for the purpose of verification of the claim. In the corresponding period the base rate was 9% p.a and that over base rate a spread of 4% p.a. was provided with maximum lending rate of 20% p.a.

Case on abnormal high rate of interest/ exorbitant maximum high rate of interest in claim during Liquidation Process – JM Financial Asset Reconstruction Company Ltd. Vs. Mr. Pradeep Kumar Kabra Liquidator for Pacific Pipe Systems Pvt. Ltd. – NCLAT New Delhi Read Post »

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