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Aditya Birla Money Insurance Advisory Service Ltd. with Aditya Birla Money Mart Ltd. with Aditya Birla Capital Technology Services Ltd. with Aditya Birla Financial Shares Services Ltd. – NCLT Ahmedabad Bench

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Aditya Birla Money Insurance Advisory Service Ltd. with Aditya Birla Money Mart Ltd. with Aditya Birla Capital Technology Services Ltd. with Aditya Birla Financial Shares Services Ltd. – NCLT Ahmedabad Bench Read Post »

A penalty imposed by SEBI during the liquidation can be claimed before Liquidator and can be considered for the purpose of distribution of assets under Section 53 of IBC? – Securities and Exchange Board of India Vs. Mr. Vishal Ghisulal Jain, Liquidator of, Sterling International Enterprises Ltd. – NCLT Mumbai Bench

NCLT Mumbai Bench referred the judgment in Sundaresh Bhatt (2022) ibclaw.in 103 SC and held that:
(i) IRP, RP or Liquidator as the case may be, has an obligation to ensure that the assessment of statutory dues like taxes, fine, penalty etc. is legally completed. Natural corollary to this is, if determination of the statutory dues is allowed during liquidation period then filing of the claim arising out of such determination cannot be barred under IBC otherwise it would amount to empty formality.
(ii) The only restriction the belated claimant has to face is that it cannot disturb the amount already distributed as per waterfall mechanism under Section 53 of the IBC.
(iii) Any creditor who files belated claim has to suffer the consequences that it is entitled to receive the amount only from the left over assets of Corporate Debtor and has no right to disturb the distribution already made.
(iv) The dues arising out of Adjudication Order passed on 17.02.2022 by SEBI which is admittedly after liquidation commencement date i.e. 18.10.2021, can be claimed before Liquidator.

A penalty imposed by SEBI during the liquidation can be claimed before Liquidator and can be considered for the purpose of distribution of assets under Section 53 of IBC? – Securities and Exchange Board of India Vs. Mr. Vishal Ghisulal Jain, Liquidator of, Sterling International Enterprises Ltd. – NCLT Mumbai Bench Read Post »

Whether a Bank can initiate proceedings u/s 14 of SARFAESI Act, 2002 where sale notice has been stayed by DRT – P. Pandidurai Vs. The City Union Bank Ltd. – Madras High Court

In this case, Borrower have filed an application before DRT challenging the sale notice and obtained an order of interim stay. In the meanwhile, Bank filed an application before the CJM under Section 14 of the SARFAESI Act, 2002 and secured order.
A division bench of the Hon’ble Madras High Court held that:
(i) Object of Section 14 of the Act appears to be to protect the interest of the bank in realising the money by bringing the property for sale. Therefore, this Court is of the view that when the sale is stayed, it is not necessary that the bank should also proceed under Section 14 of the Act.
(ii) a borrower cannot be harassed by multiple proceedings. Though Section 14 of the Act, enables the bank to initiate proceedings and there is no statutory bar to initiate action under Section 14 of the Act, applying the equitable principles, this Court is of the view that the bank can wait or seek permission to initiate further proceedings under Section 14 of the Act. Without any notice or an indication to the Borrower, the bank chose to initiate proceedings under Section 14 of the Act.

Whether a Bank can initiate proceedings u/s 14 of SARFAESI Act, 2002 where sale notice has been stayed by DRT – P. Pandidurai Vs. The City Union Bank Ltd. – Madras High Court Read Post »

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