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Does a Co-borrower who has not been disbursed any amount of loan, fall under the definition of Financial Creditor under Section 5(8), of the IBC? – Ashique Ponnamparambath & Anr. Vs. BMW India Financial Services Pvt. Ltd. – NCLAT Chennai

NCLAT held that the contention of the Appellant that the Appellant having been added as a Co-borrower though with respect of the loan facilities created in favour of the Platino Classic Motor India Pvt. Ltd. yet no disbursement has been made, therefore, the Respondent would not fall within the definition of financial creditor. The argument though appears to be attractive but in view of the fact that the Appellant has itself chosen to join hands with the Co-borrower and owned all its right and liabilities as a Co-borrower, passed a resolution and made a joint request to add the Corporate Debtor as a Co-borrower in the loan facilities coupled with the fact that an addendum agreement was also executed on 17.05.2017 itself wherein the Appellant had taken over all rights and liabilities alongwith Co-borrower in respect of the facilities extended by the Financial Creditor and the Corporate Debtor passed a board resolution consenting to assume the liability would cumulatively prove that the Appellant is a Co-borrower against whom the application under Section 7 of the Code is maintainable.

Does a Co-borrower who has not been disbursed any amount of loan, fall under the definition of Financial Creditor under Section 5(8), of the IBC? – Ashique Ponnamparambath & Anr. Vs. BMW India Financial Services Pvt. Ltd. – NCLAT Chennai Read Post »

The date on which NPA classification is declared is relevant or the date with effect from such classification is made to be effective is relevant for the purpose of 29A(c) – Avantha Holdings Ltd. Vs. Mr. Abhilash Lal, RP for Jhabua Power Ltd. – NCLAT New Delhi

The NCLAT held that the date on which classification is declared is relevant or the date with effect from such classification is made to be effective is relevant for the purpose of 29A(c), is the straight question to be answered. The purpose of date of “such classification” is that from the date of such classification, within grace period, that is, one year, if one year period has expired and NPA still continues, the Resolution Applicant is ineligible. From reverting to the facts of the present case, the NPA classification was declared on 21.05.2018 with effect from 01.04.2009. So, 01.04.2009 is the backdate which has been given by Canara Bank, but actual date of classification is 21.05.2018. If we take the backdate as the date of classification, the purpose and object for giving the grace period will not be fulfilled. If date of classification is declared as a date which is nine years ago, there is no question of a Resolution Applicant to take any benefit of the grace period of one year. The purpose for statutory requirement that at least one year has elapsed from the date of such classification is to see that within a period of one year from classification, if the Resolution Applicant did not get away from NPA, it should be declared as NPA. But in case where the Resolution Applicant does not actually get the grace period whether by a backdate, which is of nine years ago, it can be denied the benefit of the expression statutory requirement of “at least period of one year has elapsed from the date of such classification”.

The date on which NPA classification is declared is relevant or the date with effect from such classification is made to be effective is relevant for the purpose of 29A(c) – Avantha Holdings Ltd. Vs. Mr. Abhilash Lal, RP for Jhabua Power Ltd. – NCLAT New Delhi Read Post »

The GST amount is an amount of tax levied under the assessment order as per the GST Act, 2017, claim of the GST Department cannot be edited or reduced by the Resolution Professional – Bijoy Prabhakaran Pulipra RP PVS Memorial Hospital Pvt. Ltd. Vs. State Tax Officer (Works Contract) SGST Department, Kerala State – NCLAT Chennai

NCLAT held that the IRP/RP has revised the admitted claim of the GST Department. The above exercise of revision of the GST assessment order was beyond the jurisdiction of the IRP/RP. It is pertinent to mention that the IRP/RP was not having the adjudicatory power given by the GST Act. Regulation 14 of the CIRP Regulations only authorises the IRP/RP to exercise power where the claim is not precise due to any contingency or other reasons.
The GST amount is an amount of tax levied under the assessment order as per the Goods and Service Act, 2017. It cannot be edited or reduced by the Resolution Professional himself. Even if the IRP/Resolution Professional was aggrieved by the said Order, they should have filed the Appeal under Section 107 of the CGST/SGST Act, 2017, read with Rule 108 of the GST Rules 2017. Any revision of assessment orders also cannot be made under the pretext of Section 238 of IBC. Section 238 of Insolvency and Bankruptcy Code cannot be read as conferring any appellate or adjudicatory jurisdiction in respect of issues arising under other statutes.

The GST amount is an amount of tax levied under the assessment order as per the GST Act, 2017, claim of the GST Department cannot be edited or reduced by the Resolution Professional – Bijoy Prabhakaran Pulipra RP PVS Memorial Hospital Pvt. Ltd. Vs. State Tax Officer (Works Contract) SGST Department, Kerala State – NCLAT Chennai Read Post »

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