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Is the burden on Bank to prove that interest is properly charged and not over charged? | Is under SARFAESI Act, 2002, Tribunal expected to decide the correctness of claim? – The Authorized Officer, Kotak Mahindra Bank Ltd. Vs. IPAC Paper Boards (India) Pvt. Ltd. and Anr. – DRAT Chennai

Hon’ble DRAT Chennai held that as rightly pointed out by Advocate for Appellant, Tribunal below put the burden on Bank to show that the calculation of interest etc., is correct and as per guidelines of RBI. As rightly pointed out by Advocate for Appellant, Tribunal is not justified in putting the burden on Bank. When Bankers’ Books Evidence Act, 1891, permits to draw a presumption, it is for Respondents to rebut that presumption with acceptable evidence. Further, this dispute is under SARFAESI Act, 2002. Under SARFAESI Act, 2002, Tribunal is not expected to decide the correctness of claim. Scope of enquiry under Section 17 of SARFAESI Act, 2002, is to examine whether Bank/Financial Institution has duly followed the procedure contemplated under SARFAESI Act, 2002, in taking measures.

Is the burden on Bank to prove that interest is properly charged and not over charged? | Is under SARFAESI Act, 2002, Tribunal expected to decide the correctness of claim? – The Authorized Officer, Kotak Mahindra Bank Ltd. Vs. IPAC Paper Boards (India) Pvt. Ltd. and Anr. – DRAT Chennai Read Post »

When separate Purchase Orders issued by three associated companies, mere fact that parent company is same, all the invoices cannot be clubbed to meet the threshold of Rs. 1 cr. u/s 4 of IBC – Novacare Healthcare Solutions Pvt. Ltd. Vs. Max Healthcare Institute Ltd. – NCLAT New Delhi

Operational Creditor filed petition u/s 9 of IBC by clubbing the claims in Purchase Orders which were issued against the three associated companies have different CIN and separate assets and liabilities.

The Adjudicating Authority rejected the Section 9 application and held that the claim cannot be clubbed.

Hon’ble NCLAT affirms the decision of NCLT holding that when separate Purchase Orders were issued by the three hospitals, as noted in the order and invoices were also issued separately, the mere fact that parent company of the three hospitals is same, the Appellant cannot club all the invoices and try to complete the threshold by claiming debt of Rs.1,02,20,129/- whereas with regard to each invoice threshold is not complete, as observed by the Adjudicating Authority.

When separate Purchase Orders issued by three associated companies, mere fact that parent company is same, all the invoices cannot be clubbed to meet the threshold of Rs. 1 cr. u/s 4 of IBC – Novacare Healthcare Solutions Pvt. Ltd. Vs. Max Healthcare Institute Ltd. – NCLAT New Delhi Read Post »

If no date is mentioned regarding affixation of the Possession Notice or affixation of sale notice on the conspicuous part of the schedule property, no compliance of Rule 8(7) of Security Interest (Enforcement) Rules, 2002 was made by the Bank – Nampally Kishan Vs. Telengana Grameena Bank – DRAT Kolkata

DRAT observed that in the appeal as well as before the DRT an effort is made by the Bank to show that the notice was affixed on a conspicuous part of the schedule property to make the compliance of Rule 8 (7). But the photographs annexed with the affidavit would show that no date is shown on which date the notice was affixed on the conspicuous part of the schedule property. Even in the list of documents filed by the Bank before this Appellate Tribunal and annexed at Serial No. 5 and 8 no date is mentioned regarding affixation of the Possession Notice or affixation of sale notice on the conspicuous part of the schedule property. Accordingly, it could not be accepted that compliance of Rule 8 (7) of the Rules was made by the Bank. On this count alone SARFAESI Application, under Section 17 of the Act, deserves to be allowed.

If no date is mentioned regarding affixation of the Possession Notice or affixation of sale notice on the conspicuous part of the schedule property, no compliance of Rule 8(7) of Security Interest (Enforcement) Rules, 2002 was made by the Bank – Nampally Kishan Vs. Telengana Grameena Bank – DRAT Kolkata Read Post »

There is no ground available to reject an application u/s 7 of IBC except NCLT finds that the debt has not become due and payable, the decision in ‘Vidarbha Industries’ cannot be read and understood as taking a view which is contrary to the view taken in ‘Innoventive Industries’ and ‘E.S. Krishnamurthy’ – M. Suresh Kumar Reddy Vs. Canara Bank & Ors. – Supreme Court

Hon’ble Supreme Court held that once NCLT is satisfied that the default has occurred, there is hardly a discretion left with NCLT to refuse admission of the application under Section 7. Default is defined under Section 3(12) of the Code. Thus, even the non¬-payment of a part of debt when it becomes due and payable will amount to default on the part of a Corporate Debtoṛ. In such a case, an order of admission under Section 7 of the Code must follow. If the NCLT finds that there is a debt, but it has not become due and payable, the application under Section 7 can be rejected. Otherwise, there is no ground available to reject the application.
The decision in the case of Vidarbha Industries cannot be read and understood as taking a view which is contrary to the view taken in the cases of Innoventive Industries and E.S. Krishnamurthy. The view taken in the case of Innoventive Industries still holds good.

There is no ground available to reject an application u/s 7 of IBC except NCLT finds that the debt has not become due and payable, the decision in ‘Vidarbha Industries’ cannot be read and understood as taking a view which is contrary to the view taken in ‘Innoventive Industries’ and ‘E.S. Krishnamurthy’ – M. Suresh Kumar Reddy Vs. Canara Bank & Ors. – Supreme Court Read Post »

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