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Section 3 of the Interest Act, 1978 is not applicable in case of submission of claim for interest without any documents before RP in Insolvency Code – Capriso Finance Ltd. and Anr. Vs. Trishul Dream Homes Ltd. – NCLAT New Delhi

In this case, the Resolution Professional has accepted the claim of the Appellant/ Financial Creditor but has not allowed the interest. In IA filed by the Financial Creditor, NCLT held that the Financial Creditor has failed to place any document which entitles for the alleged interest and the Resolution Professional could admit the amount which is principal amount only. Counsel for the Appellant challenging the order submits that under the Interest Act, 1978, the entitlement is there although he submits that no document could be filed for claiming interest.

Hon’ble NCLAT holds that there cannot be any dispute to the statutory provision of Section 3 of the Interest Act, 1978 which empowers the Court to allow the interest. In the present case, it was the Resolution Professional who had to collate the claim and allow the interest. Present was not a case where Section 3 is applicable and it was only claim to be admitted in the CIRP, hence, reliance on Section 3 is misplaced.

Section 3 of the Interest Act, 1978 is not applicable in case of submission of claim for interest without any documents before RP in Insolvency Code – Capriso Finance Ltd. and Anr. Vs. Trishul Dream Homes Ltd. – NCLAT New Delhi Read Post »

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench

In this case, IA was filed by RP for recovery of due to the Corporate Debtor.
NCLT Jaipur Bench held that:
(i) The duties imposed upon the RP/IRP does not entitle the Adjudicating Authority to exercise jurisdiction in matters where recovery of a particular amount is sought on behalf of the Corporate Debtor. For adjudication of disputes and recovery of sums the RP is empowered to approach relevant competent authorities.
(ii) The Resolution Professional in the present matter had approached this forum for recovery of debt which is allegedly owed by the Respondent No. 2 to the Corporate Debtor whereas it has forgotten the underlying principle which enunciates that this is not a debt recovery forum.
(iii) There is no doubt that the Resolution Professional has ample powers to proceed and protect the debts of the Corporate Debtor, but it cannot do so by merely filing an Application under Section 60(5) of the Code in the pending CIRP of the Corporate Debtor.
(iv) The Adjudicating Authority does not have the jurisdiction to allow the Application filed by the Resolution Professional.

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench Read Post »

Moratorium u/s 14 of IBC does not impose any restriction on charging of any interest/Penal Interest during the CIRP period and it is not in the domain of the IBC, 2016 to decide any contractual interest liability – Mr. Arun Kumar Vs. Ms. Sripriya Kumar – NCLAT Chennai

In this important judgment, NCLAT held that:
(i) A simple and purposive reading of this Section 14 does not specify any ‘interest waiver’ during the period of moratorium.
(ii) The role of the RP under IBC, 2016 is only to collate the Claims and that he does not have any adjudicatory powers. The Claim of the Creditors does not stop on initiation of CIRP.
(iii) It is not in the domain of the IBC, 2016, even to decide any contractual interest liability. Section 14 does not impose any restriction on charging of any interest till the amount is paid. It is the commercial wisdom of the CoC with respect to the quantum of amounts to be paid to the Creditors within the Provisions of the Code.
(iv) There is no provision in the Code that enables the Corporate Debtor or a Guarantor to seek remission in the interest claims from the Financial Creditors solely on the basis that there is a Resolution Plan.
(v) Having not challenged the decision of the CoC in not qualifying him as a Prospective Resolution Applicant, the Promotor cannot now at the belated stage after the approval of the Plan by the Adjudicating Authority states that he is interested in offering a viable solution.
(vi)The Promotor being an MSME is given an opportunity under the Provisions of the Code to present a Plan. At the same time, the Code does not contemplate any kind of preference to be given to an MSME Promotor by the CoC while accepting a Resolution Plan.

Moratorium u/s 14 of IBC does not impose any restriction on charging of any interest/Penal Interest during the CIRP period and it is not in the domain of the IBC, 2016 to decide any contractual interest liability – Mr. Arun Kumar Vs. Ms. Sripriya Kumar – NCLAT Chennai Read Post »

Is advanced against immovable property Deposit under Section 2(31) of the Companies Act, 2013? – Arpit Agarwal Vs. Skytech Constructions Pvt. Ltd. – NCLAT New Delhi

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Is advanced against immovable property Deposit under Section 2(31) of the Companies Act, 2013? – Arpit Agarwal Vs. Skytech Constructions Pvt. Ltd. – NCLAT New Delhi Read Post »

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