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Adjudicating Authority (NCLT) is not to exercise its adjudicatory function at any stage prior to hearing of the application under Section 100 of IBC | Supreme Courts’ judgment needs to be followed even if it was not cited before the NCLT | Issue of Principle of waiver: First time raised objection in appeal – Central Bank of India Vs. Deepen Arun Parekh – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) In the present case, the Adjudicating Authority has not even appointed the RP and the order impugned has been passed before the stage of appointment of RP and before even any Report could be called. The objections raised by Personal Guarantor in its IA were considered.
(ii) Law declared by the Hon’ble Supreme Court is law of the land, which needs to be followed by all concerned, even if the judgment was not cited before the Adjudicating Authority.
(iii) When the Adjudicating Authority directed the Financial Creditor to file a reply to the application, filing of the reply by the Appellant to IA, cannot be termed as a waiver of any of its rights.

Adjudicating Authority (NCLT) is not to exercise its adjudicatory function at any stage prior to hearing of the application under Section 100 of IBC | Supreme Courts’ judgment needs to be followed even if it was not cited before the NCLT | Issue of Principle of waiver: First time raised objection in appeal – Central Bank of India Vs. Deepen Arun Parekh – NCLAT New Delhi Read Post »

Resolution Professional cannot exclude existing homebuyers/ past developers \ related/connected persons in EOI from submission of Rplan | RP/CoC can lay down additional criterion in Form G only having regard to the complexity and scale of operations of the business of the Corporate Debtor, as per Section 25(2)(h) of IBC – Mr. Dinesh Chaplot and Anr. Vs. Mr. Dinesh Kumar Deora, RP of Snehanjali and S.B. Developers Pvt. Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:

(i) As per Section 25(2)(h) of the IBC, the duty of the RP to lay down the criteria for inviting prospective resolution applicants (PRAs) must be with the approval of the CoC and is not independent.
(ii) The duty of both RP and CoC is to lay down such criterion as is formulated only having regard to the complexity and scale of operations of the business of the CD and other conditions specified by the IBBI.
(iii) From a conjoint reading of Section 25(2)(h) and Regulation 36A (1), it can be presumed that the RP is not authorised to adjudicate as to the qualification or disqualification of PRAs.
(iv) An insolvency professional is duty bound to abide by all the laws at all times during the resolution process. An RP is the only person who would ensure compliance of all the laws in the processes under the IBC.
(v) Neither the CoC nor the RP has any inherent right to negate a statutory provision available to a person to submit EOI, if such a person is otherwise not ineligible within the meaning of Section 29A of the IBC.

Resolution Professional cannot exclude existing homebuyers/ past developers \ related/connected persons in EOI from submission of Rplan | RP/CoC can lay down additional criterion in Form G only having regard to the complexity and scale of operations of the business of the Corporate Debtor, as per Section 25(2)(h) of IBC – Mr. Dinesh Chaplot and Anr. Vs. Mr. Dinesh Kumar Deora, RP of Snehanjali and S.B. Developers Pvt. Ltd. – NCLT Mumbai Bench Read Post »

The reason that Corporate Debtor or its Bankers were unable to obtain permission for remittance of amount overseas, cannot be made a reason to hold that no default is committed – Hytera Communications Corporation Ltd. Vs. Simoco Telecommunications (South Asia) Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that present is a fit case to admit when inspite of several promises and acknowledgement, the Corporate Debtor failed to pay the outstanding debt. The Corporate Debtor also has not complied with the order of the Adjudicating Authority directing for depositing the amount equivalent to Indian Rupee in the Court, instead it cited certain regulatory procedure in obtaining the permission for remitting the amount, which order was also not complied by the Corporate Debtor. We are of the view that Adjudicating Authority ought to have admitted Section 9 Application.

The reason that Corporate Debtor or its Bankers were unable to obtain permission for remittance of amount overseas, cannot be made a reason to hold that no default is committed – Hytera Communications Corporation Ltd. Vs. Simoco Telecommunications (South Asia) Ltd. – NCLAT New Delhi Read Post »

It is not an absolute right of party to file a petition under Section 34 of Arbitration and Conciliation Act, 1996, after expiry of limitation period u/s 34(3) | Section 14 of the Limitation Act cannot be considered an absolute right – Paramount Ltd. Vs. Ion Exchange (India) Ltd. – Bombay High Court

Hon’ble High Court held that:
(i) The party to the arbitration has the right under section 34(3) of the Act to file an application/ petition to set aside the award within a period of three months from the date of receipt of the award if it is properly instituted. After a period of three months till the further period of 30 days, it is not an absolute right of the party to file a petition under section 34 of the Act, and it is within the discretion of the Court to condone the delay if the Court is satisfied that there is sufficient cause. Thus, if there is no sufficient cause, the Court can dismiss the petition challenging the award on the ground of delay by not condoning the delay. This change from the absolute right to present a petition under section 34 of the Act to the discretion of the Court is noted by the learned Single Judge in the impugned order.
(ii) Though it is correct that if the petition is filed within time/ permitted to be filed within the stipulation of section 34(3) of the Act if it is found that the Court did not have jurisdiction in view of the bar of section 42, the Petitioner can invoke section 14 of the Limitation Act to institute the same in a proper court, because section 14 of the Limitation Act is available, it does not mean that the prejudice to the parties presenting a petition no longer exists.

It is not an absolute right of party to file a petition under Section 34 of Arbitration and Conciliation Act, 1996, after expiry of limitation period u/s 34(3) | Section 14 of the Limitation Act cannot be considered an absolute right – Paramount Ltd. Vs. Ion Exchange (India) Ltd. – Bombay High Court Read Post »

Sale as a going concern is always a better resolution of the Corporate Debtor than permitting part sale – Nimmagadda Surya Pradeep Bio-Tech Pvt. Ltd. Vs. M/s. Kamineni Steel and Power India Pvt. Ltd. – NCLT Hyderabad Bench

As per Clause 12, Schedule I of Liquidation Process Regulation, 2016, the Successful Bidder has to make balance payment of sale consideration within 90 days and interest will be charged at the rate of 12% from 31st day to 90 days. If the payment is not paid within 90 days, the sale shall be cancelled. In this case, the Bid was allotted to the Successful Bidder on 26.08.2020. Enough time has elapsed and several pleadings for additional time were made by this Successful Bidder. Further, the commitments given to the Bench were also not honoured by the Successful Bidder on one pretext or the other. The counsel for the Successful Bidder has also not made any grounds to consider their plea for extension of time for making payment of the bid amount. Notwithstanding the above and Considering the facts mentioned by the Successful Bidder and also keeping in mind that sale as a going concern is always a better resolution of the Corporate Debtor than permitting part sale. The Adjudicating Authority is given a final chance to Applicant to make the payment of 25% of the bid amount including EMD amount or Rs.5.00 crores on or before 30th November, 2021.

Sale as a going concern is always a better resolution of the Corporate Debtor than permitting part sale – Nimmagadda Surya Pradeep Bio-Tech Pvt. Ltd. Vs. M/s. Kamineni Steel and Power India Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

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