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Doctrine of necessity: NCLAT too can extend its powers under section 60(5) of IBC, 2016 to meet out the ends of Justice in order to avoid liquidation of the Corporate Debtor – Mr. C. Sivasami Vs. Mr. A.R. Ramasubramania Raja, Liquidator of Topknit Processing Mills Pvt. Ltd. and Anr. – NCLAT Chennai

Hon’ble NCLAT held that:

(i) The concept of the ‘doctrine of necessity’, which has to be read in accordance with the provisions contained under section 60(5) of I & B Code, 2016, it provides for meeting out such inevitable circumstances in form of the powers vested with the Tribunals and particularly the NCLT as referred to in Section 60(5) of I & B Code, 2016, to pass any appropriate order for fruitfully disposing of any application or proceedings in order to meet the purpose of CIRP, as against the Corporate Debtor.

(ii) When the provisions contained under section 60(5) of I & B Code, 2016, it starts with a non-obstinate clause, that means it has an overriding effect to any of the provisions to the contrary, of the Code as contained therein and that the exercise of inherent powers have been vested with the Tribunal to carry out the exceptions in order to meet out the objective of the Code in order to avoid liquidation and to enable the Corporate Debtor to transition into position of being a going concern.

(iii) The NCLAT too can extend its powers under section 60(5) to meet out the ends of Justice in order to avoid liquidation of the Corporate Debtor.

Doctrine of necessity: NCLAT too can extend its powers under section 60(5) of IBC, 2016 to meet out the ends of Justice in order to avoid liquidation of the Corporate Debtor – Mr. C. Sivasami Vs. Mr. A.R. Ramasubramania Raja, Liquidator of Topknit Processing Mills Pvt. Ltd. and Anr. – NCLAT Chennai Read Post »

There is no provision in law to grant time for filing objection if any certificate debtor is interested to raise any objection and to resist execution of any certificate, he may prefer objection and in that circumstances, Recovery Officer is under obligation to decide objections – Shriram Plast and Ors. Vs. Recovery Officer Debts Recovery Tribunal and Anr. – Madhya Pradesh High Court

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There is no provision in law to grant time for filing objection if any certificate debtor is interested to raise any objection and to resist execution of any certificate, he may prefer objection and in that circumstances, Recovery Officer is under obligation to decide objections – Shriram Plast and Ors. Vs. Recovery Officer Debts Recovery Tribunal and Anr. – Madhya Pradesh High Court Read Post »

Resolution Professional and the representative of the CoC who are the Chairman/Members of the Monitoring Committee should assist the Resolution Applicant in sorting out the issues pending at various forums be it Excise Authority, Enforcement Directorate etc. – Amit Gupta Vs. Anil Kohli RP for Dunar Foods Ltd. – NCLAT New Delhi

NCLAT held that the CIRP shall mandatorily be completed within a period of 330 days from the insolvency commencement date. Including the extension of CIRP Period and time taken in legal proceedings. Liability for prior offences etc. particularly removing/lifting attachments/liens/charges/encumbrances existing prior to CIRP needs to be dealt with in accordance with the provisions of Section 32(A) of the Code. It is also not in dispute that the object of the IBC would be defeated if the responsibility for prior offences is put on the Resolution Appellant. The Resolution Appellant is supposed to get a clean slate and all dues of the Corporate Debtor prior to commencement of CIRP stand extinguished. The Successful Resolution Applicant is supposed to get all the assets of the Corporate Debtor free from any encumbrances and would be available for use by the Resolution Applicant without any fetters or brevity and clarity.

Resolution Professional and the representative of the CoC who are the Chairman/Members of the Monitoring Committee should assist the Resolution Applicant in sorting out the issues pending at various forums be it Excise Authority, Enforcement Directorate etc. – Amit Gupta Vs. Anil Kohli RP for Dunar Foods Ltd. – NCLAT New Delhi Read Post »

Brig. E. S. Krishnamurthy & Ors. Vs. M/s Bharath Hi-Tech Builders Pvt. Ltd. – NCLAT New Delhi

NCLAT held that it is manifestly clear that the application under Section 7 of the Code came to be disposed of at the pre-admission stage and no order of admission or rejection of application was passed by the Adjudicating Authority keeping in view the nature of claims which admittedly were relatable to a Housing Project. The Adjudicating Authority appears to have been influenced by the fact that claims of the maximum number of stakeholders have been settled which included some claims settled at pre-admission stage before the Adjudicating Authority. In so far as the remaining claims were concerned, the Adjudicating Authority allowed a definite time frame viz. 3 months giving liberty to the claimant(s) whose claims would remain unsettled after expiry of the given time frame, to come back and re-agitate the matter.

Brig. E. S. Krishnamurthy & Ors. Vs. M/s Bharath Hi-Tech Builders Pvt. Ltd. – NCLAT New Delhi Read Post »

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