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When Erstwhile Management indulged into fraudulent trading or unlawful trading which may also include any preferential transactions, order to make contribution by the Erstwhile Directors is very well contemplated under Section 66 of the Code, Section 44(1)(d) of IBC contemplates a direction requiring any person to pay such sums in respect of benefits received by him from the Corporate Debtor – Mr. Saptarshi Nath Vs. Kapil Dev Taneja, RP of Exit 10 Marketing Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) Essential conditions need to be fulfilled for issuing direction under Section 44(1)(d). (i) The Adjudicating Authority may require any person to pay and (ii) Such sums in respect of benefits received by him from the Corporate Debtor. Thus as observed above, the provision of Section 44 is aimed at reversing the effects of preferential transactions when the effects of preferential transaction are, reversed the person who has received benefits from the transactions, can be required to pay the sum which is the power given under Section 44(1)(d) of the Code.
(ii) When Erstwhile Management indulged into fraudulent trading or unlawful trading which may also include any preferential transactions, order to make contribution by the Erstwhile Directors is very well contemplated under Section 66 of the Code.
(iii) Present is not a case where the Adjudicating Authority has returned any finding under Section 66 or exercised power and issued an order under Section 66 of the Code. The Adjudicating Authority has only issued direction under Section 44(1)(d) of the Code.

When Erstwhile Management indulged into fraudulent trading or unlawful trading which may also include any preferential transactions, order to make contribution by the Erstwhile Directors is very well contemplated under Section 66 of the Code, Section 44(1)(d) of IBC contemplates a direction requiring any person to pay such sums in respect of benefits received by him from the Corporate Debtor – Mr. Saptarshi Nath Vs. Kapil Dev Taneja, RP of Exit 10 Marketing Pvt. Ltd. – NCLAT New Delhi Read Post »

Borrower, son of the mortgagor, who died even before proceedings under SARFAESI Act, 2002 were initiated, has an interest in the property along with the other legal heirs of the deceased mortgagor – Dr. Mrs. Amita Verma Vs. The Authorized Officer, Indian Bank – Patna High Court

Hon’ble High Court held that the proprietor of the firm was the son of the guarantor who was no more. The proprietor of the firm had an interest in the property after the death of his father. We say this only to put the matter in the correct perspective and it is not as if the borrower, who had mortgaged the property of another, could not have filed the application before the DRT under Section-17(1). When the proceedings under the SARFAESI Act is taken, the borrower and the mortgagor are both parties interested in the proceedings. Merely because mortgagor has not been impleaded, it does not follow that the borrower cannot file an application under Section-17.

Borrower, son of the mortgagor, who died even before proceedings under SARFAESI Act, 2002 were initiated, has an interest in the property along with the other legal heirs of the deceased mortgagor – Dr. Mrs. Amita Verma Vs. The Authorized Officer, Indian Bank – Patna High Court Read Post »

Company Secretary is the Watchdog of protecting the Principles of Corporate Governance as well as the collective interest of all the stakeholders so also the Company; of course he is not a blood hound – Mayank Agarwal Vs. Technology Frontiers (India) Pvt. Ltd., Represented by Sriram Srivatsan, PCS – NCLT Chennai Bench

The NCLT held that the Company Secretary is the Secretary of the Company; the Secretary of the Company is the Secretary of the Company; he is not the Secretary of shareholders. Needless to mention that he is the Watchdog of protecting the Principles of Corporate Governance as well as the collective interest of all the stakeholders so also the Company; of course he is not a blood hound. The era in which the Company Secretary occupied the position of a glorified clerk in Companies has expired consequent upon evolution of corporate governance and the various compliance requirement in a complex regime so as to protect the interest of the company as well as its various stakeholders.
Further, it held that the company can be represented by the Company Secretary since he is a key managerial person under section 2(51) of Companies Act, 2013, officer in default as per sec.2(60) as per companies act 2013 and as per the power given under sec. 205(1)(c) read with Rule 10 clause 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 it is abundantly clear that the Company Secretary can represent before various regulators and other authorities under the Act in connection with discharge of various duties under the Act. The NCLT being a quasi-judicial authority the Company Secretary can very well do the same.

Company Secretary is the Watchdog of protecting the Principles of Corporate Governance as well as the collective interest of all the stakeholders so also the Company; of course he is not a blood hound – Mayank Agarwal Vs. Technology Frontiers (India) Pvt. Ltd., Represented by Sriram Srivatsan, PCS – NCLT Chennai Bench Read Post »

Whether the Adjudicating Authority while considering Application of Pre-packaged Insolvency under Section 54C of the Code can, before admission of the Application, hear Objectors/Interveners – Krrish Realtech Pvt. Ltd. – NCLAT New Delhi

This Appeal raises a limited issue as to whether the Adjudicating Authority while considering Application of pre-packaged insolvency(PPIRP) under Section 54C of the Code can, before admission of the Application, hear Objectors/ Interveners.
NCLAT held that the statutory scheme delineated by Chapter III-A of the Code as well as the Regulations, 2021 as observed above does not indicate any prohibition on the Adjudicating Authority to hear any objector or intervener before admitting an application of PPIRP. When there is no prohibition in hearing an objector or interveners by the Adjudicating Authority, the orders passed by the Adjudicating Authority giving time to the objectors to file objection cannot be said to be in breach of any statutory provisions. We may hasten to add that hearing of objectors or interveners in each case where PPIRP application has been filed is not a matter of course and has to be limited to exceptional cases. We are cautious that proceeding under the Code are time bound procedure where unnecessary delay has to be avoided by the Adjudicating Authority and giving time to objections which are meritless and giving time to objectors and interveners has to be exercised on sound discretion on valid grounds.

Whether the Adjudicating Authority while considering Application of Pre-packaged Insolvency under Section 54C of the Code can, before admission of the Application, hear Objectors/Interveners – Krrish Realtech Pvt. Ltd. – NCLAT New Delhi Read Post »

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