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Does Interim Moratorium under Section 96 of the IBC bar the insolvency applications against the Personal Guarantor? – YES Bank Ltd. Vs. Mr. Kunal Jiwarajka Personal Guarantor of JSK Marketing Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:

(i) The scheme of Code does not contemplate manifold applications against the same Personal Guarantor by different lenders. Multiplicity of applications against the same Personal Guarantor is not contemplated under Chapter III.
(ii) If they have not filed any application during moratorium period, they have every right to file application and for computation of the period of limitation, period during which moratorium is in place is to be excluded.

Does Interim Moratorium under Section 96 of the IBC bar the insolvency applications against the Personal Guarantor? – YES Bank Ltd. Vs. Mr. Kunal Jiwarajka Personal Guarantor of JSK Marketing Ltd. – NCLT Mumbai Bench Read Post »

Base Resolution Plan in which an attempt to circumvent SEBI Takeover Regulations, in respect of acquisition of shareholding in a listed entity beyond the specified threshold limit, cannot be approved even under Sec. 54C in the garb of Insolvency Resolution Process – Garodia Chemicals Ltd. – NCLT Mumbai Bench

In this PPIIRP case, NCLT Mumbai Bench observes that:
The Base Resolution Plan contemplates write off of 100% promoter shareholding and 12/13 of public shareholding. The Plan further contemplates that (a) the Compliances prescribed under Section 61, 66 of the Companies Act, 2013 and Regulation 37 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 31A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (SAST) Regulations and any other applicable laws and Regulations shall be dispensed off in implementing this plan; (b) The Approval of Resolution Plan shall be deemed approval as specified above in point XII (1 to 12) as required under the Companies Act, 2013, SEBI (LODR) Regulations, 2015, SEBI (ICDR) Regulations, 2011, and any other applicable laws, rules, Regulations, and schedule etc. In other words, the Plan seeks exemption from compliance to SEBI Takeover Regulations.
The Bench held that present application is not intended towards resolution of the Corporate Debtor but is an attempt to circumvent the Takeover Regulations of SEBI by bringing M/s WZ Enterprises Private Limited in control in place of existing promoter group.
The legislative intent behind the introduction of PPIRP in the Code was to provide an alternative process for resolution of the stress of corporate MSMEs due to their unique nature of business and simpler corporate structures. PPIRP is built on trust and honors the honest MSME owners by enabling resolution when the company remains with them.

Base Resolution Plan in which an attempt to circumvent SEBI Takeover Regulations, in respect of acquisition of shareholding in a listed entity beyond the specified threshold limit, cannot be approved even under Sec. 54C in the garb of Insolvency Resolution Process – Garodia Chemicals Ltd. – NCLT Mumbai Bench Read Post »

A bare perusal of the Section 4 of IBC makes it clear that the amount of default as on date of filing of the application should be within the prescribed threshold when the application is filed – M/s Inter Plaza Impex LLP & Ors. Vs. M/s Columbus Overseas LLP – NCLT Jaipur Bench

In this case, the Applicant on one hand has filed the Application on 22.06.2020 to ensure that it is within limitation period whereas on the other hand the Applicant is trying to calculate the claim amount till date i.e. 31.08.2022 to fall within the prescribed threshold limit of One Crore. From the actions of the Applicant, we can clearly perceive that the Applicant is trying to obtain the best of both worlds by filing the application within limitation period i.e. a period of 3 years from the date of default and at the same time, the computation of interest is being made till 31.08.2022 i.e. 2 years after the date of filing of the petition. NCLT held that the said representation of the applicant in computing the interest till date to ensure that the application falls within the threshold limit is clearly flawed. This Adjudicating Authority does not appreciate such absurd submissions.

A bare perusal of the Section 4 of IBC makes it clear that the amount of default as on date of filing of the application should be within the prescribed threshold when the application is filed – M/s Inter Plaza Impex LLP & Ors. Vs. M/s Columbus Overseas LLP – NCLT Jaipur Bench Read Post »

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