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Essentially for a transaction to qualify as Fraudulent Trading under Section 66(1) of IBC, 2016 and Wrongful Trading under Section 66(2) of Insolvency Code – Mr. Vijendra Kumar Jain Vs. Mr. Nitin Ramchandra Jadhav and Ors. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai held that It is pertinent to mention that the concept of ‘Wrongful Trading’ has been imported from the UK Insolvency Act, 1986 into the IBC, 2016 which is still at a nascent stage in this country. Thus, by taking a cue from the judgments rendered by the English Courts in this regard, the following acts have been held to constitute ‘Wrongful Trading’;
(i) Repaying the director loan made to the company while other creditors were not paid;
(ii) Repayment of a loan to a family member;
(iii) A director paying his own salary while the salary for the employees was not paid;
(iv) Buying goods on credit when there is no means to pay for them;
(v) Using customer deposits for cash-flow purposes with no means of supplying goods;
(vi) Repaying bank personal guarantees over other creditors;
(vii) Not keeping proper accounting records;
(viii) Falsification of company records; and
(ix) Any transfer or sale of assets at anything less than a fair and reasonable commercial value.

Essentially for a transaction to qualify as Fraudulent Trading under Section 66(1) of IBC, 2016 and Wrongful Trading under Section 66(2) of Insolvency Code – Mr. Vijendra Kumar Jain Vs. Mr. Nitin Ramchandra Jadhav and Ors. – NCLT Mumbai Bench Read Post »

Even if CIRP Regulation 6A was not applicable on the date of CIRP, RP as a part of his duty to get complete information from all the Creditors, is expected to inform all the Creditors, about whom he has knowledge, in order to have an effective CIRP – Union Bank of India Vs. Mr. M. Madhusudhana Reddy RP of Cura Technologies Ltd. – NCLT Hyderabad Bench

NCLT Hyderabad Bench held that:
(i) The fact remains that the publication for EoI was made in Newspapers which do not have wide circulation. As per the Audit Bureau of Circulations, the papers in which the publication was carried out in this case are not in the list of highly circulated newspapers.
(ii) Even if Regulation 6A was not there on the date of CIRP, the RP as a part of his duty to get complete information from all the Creditors, is expected to inform all the Creditors, about whom he has knowledge, in order to have an effective CIRP. As rightly contended by the Counsel for the Applicant, the approval of the CoC with regard to the Resolution Plan cannot be a ground to reject the Application.

Even if CIRP Regulation 6A was not applicable on the date of CIRP, RP as a part of his duty to get complete information from all the Creditors, is expected to inform all the Creditors, about whom he has knowledge, in order to have an effective CIRP – Union Bank of India Vs. Mr. M. Madhusudhana Reddy RP of Cura Technologies Ltd. – NCLT Hyderabad Bench Read Post »

Whether the Application filed by single allotee under section 7 of IBC and pending for consideration of this Adjudicating Authority is to be rejected holding to be not maintainable or allotees in same project who has already filed such applications and pending for consideration are allowed to peruse their application joint? – M/s Emaar Hills Township Pvt. Ltd. Vs. Mr. Srinivas Manthena – NCLAT Chennai

NCLAT set aside the order of adjudicating Authority reported at (2021) ibclaw.in 238 NCLT.

Whether the Application filed by single allotee under section 7 of IBC and pending for consideration of this Adjudicating Authority is to be rejected holding to be not maintainable or allotees in same project who has already filed such applications and pending for consideration are allowed to peruse their application joint? – M/s Emaar Hills Township Pvt. Ltd. Vs. Mr. Srinivas Manthena – NCLAT Chennai Read Post »

Even otherwise the nature of agreement entered into by the petitioner is purely contractual in nature which cannot be decided by this tribunal under Section 7 of the code in summary proceedings – Ketaki Shah Talati Vs. Mirador Construction Pvt. Ltd. – NCLT Mumbai Bench

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Even otherwise the nature of agreement entered into by the petitioner is purely contractual in nature which cannot be decided by this tribunal under Section 7 of the code in summary proceedings – Ketaki Shah Talati Vs. Mirador Construction Pvt. Ltd. – NCLT Mumbai Bench Read Post »

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