Mr. Anil Mehta, Liquidator of Pratibha Industries Ltd. Vs. VDB Projects Pvt. Ltd. – NCLT Mumbai Bench
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Mr. Manish Kumar Gupta, IP Vs. Disciplinary Committee, Insolvency and Bankruptcy Board of India and Anr. – Delhi High Court
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Once dispute has been adjudicated by Arbitrator and award has been passed in favour of Operational Creditor, the Operational Creditor cannot be allowed to go for forum shopping and rake up the issue for making a case for alleged default against the Corporate Debtor u/s 9 of the Code – SRV Techno Engineering Pvt. Ltd. Vs. Purvanchal Vidyut Vitran Nigam Ltd. – NCLT Allahabad Bench
In this case, during CIRP pending for admission, an arbitration award passed u/s 18 of MSMED Act, 2006.
NCLT Allahabad Bench held that:
(i) Once a dispute exists, the Adjudicating Authority under the Code, 2016 is not required to examine the merit of dispute.
(ii) After the Operational Creditor has approached the grievances committee of MSME tribunal resulting into referring the dispute to the Arbitrator as per the scheme envisaged under the MSME Act/ Rules, and the arbitrator thus has finally decided the dues of the Operational Creditor as against the Corporate Debtor, the process of determination of the dues has thus already gone into.
(iii) Once, the dispute has been adjudicated by the Arbitrator and award has been passed in favour of the Operational Creditor to the extent of the amount mentioned in the award itself, the Operational Creditor cannot be allowed to go for forum shopping and rake up the issue for making a case for alleged default against the Corporate Debtor U/s 9 of the Code for remaining amount if any.
(iv) Moreover, the Corporate Debtor has been found to be a solvent company. It has been held in catena of judgments by the Hon’ble NCLAT as well Hon’ble Supreme Court that IBC is not meant to be used as a means to recover the disputed dues against a solvent company.
SREI Infrastructure Finance Ltd. Vs. Uday Narayan Mitra IRP of ARSS Infrastructure Projects Ltd. – NCLAT New Delhi
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First Court where a party to an Arbitration Agreement files an application under Part-I of Arbitration and Conciliation Act, 1996 must be a Court of competent jurisdiction and the petition must be validly/properly constituted – Liberty Footwear Company Vs. Liberty Shoes Ltd. – Delhi High Court
Hon’ble High Court held that:
(i) Once an application has been filed under Part-I comprising of Sections 1 to 43 of the 1996 Act in a Court, that Court alone will have jurisdiction over the arbitral proceedings and all subsequent applications arising out of the Agreement and Section 42 will bar the parties from approaching any other Court in respect of disputes arising from the said Arbitration Agreement.
(ii) The first Court where a party to an Arbitration Agreement files an application under Part-I of the 1996 Act must be a Court of competent jurisdiction and the petition must be validly/properly constituted.
(iii) If a frivolous application is filed and opined to be so and the application is dismissed by the first Court as an abuse of the process of law, it would require to be held that though de facto a petition was first made in the said Court, but de jure none would be required to be treated as having been made.
Provisions under sections 184, 169 and 203 of the Companies Act, 2013 provide rational and reasonable norms and standards regarding eligibility of a KMP (CFO) and which are quite relevant and useful in conducting the affairs of the company in a transparent, independent and unbiased manner keeping the interest of the company foremost – The Hamlin Trust Vs. LSFIO Rose Investments S.a.r.I. – NCLAT New Delhi
The position of CFO is included as a KMP in Section 2(51) of the Act. Section 6 of the Companies Act provides that the provisions of this Act shall override anything to the contrary contained in the memorandum or articles of association of the company. We also note that the Impugned Order accepts the applicability of sections 184, 189 and 203 of the Companies Act, 2013 in that it directs Mr. Bipin Kabra to file an affidavit undertaking to abide by the requirements of these provisions. These provisions under sections 184, 169 and 203 of the Act provide rational and reasonable norms and standards regarding eligibility of a KMP (CFO in the present case) and which are quite relevant and useful in conducting the affairs of the company in a transparent, independent and unbiased manner keeping the interest of the company foremost.
Section 203 of the Act lays down that the CFO is a whole-time KMP and is prohibited from holding office in more than one company except in its subsidiary company at the same time. There are other elements of conduct that are provided in the Act as being relevant to the functioning of a KMP. A perusal of Article 140 of AoA makes it clear that in case JV Partners/appellants reject appointment of two suggested candidates, it has to accept the nomination of the third candidate. While the right of Rose Investments has been made primary the text of this article does not imply that any person, even if ineligible by the normal standard of eligibility given in section 203 of the Companies Act and the requirement of the CFO to be a whole-time KMP, can be considered a valid candidate for the position of CFO.
Slump sale under IBC cannot be converted into the sale as a going concern – Jindal Power Ltd. Vs. Dushyant C. Dave Liquidator- Shirpur Power Pvt. Ltd. – NCLT Ahmedabad Bench
In this case, the applicant wanted us to issue the direction to the liquidator to convert the slump sale into the sale as a going concern. NCLT held that in our considered opinion this cannot be done. The price of the corporate debtor in the sale as a going concern was fixed at Rs. 5,66,23,00,000/- as maximum and Rs. 4,33,16,59,500/- as a minimum whereas the price of slump sale of the corporate debtor was fixed at Rs. 4,77,84,50,000/- as maximum and Rs. 3,14,38,49,770/- as a minimum. The applicant accepted the corporate debtor in slump sale for a minimum price of Rs. 3,14,38,49,770/-. There is a vast difference between the sale price of the corporate debtor as a going concern and the sale price of the corporate debtor in a slump sale. If we allow the applicant’s request then certainly the rights of members of the stakeholders’ committee will affect prejudicially.
Merely, showing receipts of the transaction amount could not be considered as a surety that the person shall necessarily take possession of the Flat/Apartment, even if that person is considered as an allotee – Mr. Amish Jaysukhlal Sanghrajka Vs. Akshar Shanti Realtors Pvt. Ltd. – NCLT Mumbai Bench
The Adjudicating Authority observed that in order to attract the provisions of IBC, a homebuyer must qualify as an ‘Allotee’ under the Section 2 (d) of the RERA Act. For the petitioner to qualify the threshold limit 100 or 10% to initiate a CIRP under the purview of Section 7 of IBC, it must primarily satisfy the requisite of an Allotee which the Petitioner has failed in the instant case. Further, even if we consider that the Petitioner is a Allotee, in line to the Hon’ble NCLAT’s decision in Navin Raheja v. Shilpa Jain & Ors [2020] ibclaw.in 142 NCLAT, we are inclined to reject this petition.
Mr. S. Rajendran, RP of M/s. Empee Distilleries Ltd. Vs. South India Hotels & 7 Ors. – NCLT Chennai Bench
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Dr. Manju Varma Vs. State of U.P. & Ors. – Supreme Court
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