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The IBC provides for a very strict timeline for filing an appeal – Satvir Singh Gulia Vs. Emaar India Ltd. – NCLAT New Delhi

/ 12 minutes of reading

In this case, the Appellant has taken about 170 days to cure the defects and finally re-file the present appeal. The Appellant seeks condonation of delay on several grounds such as advocate’s clerk had misplaced pages of appeal while filing it, personal difficulty in re-filing, engagement in roka ceremony of the advocate in April, 2024 and thereafter preparation of the marriage of the Advocate and thereafter major surgery of his mother in August and thereafter house shifting. These reasons do not inspire much confidence as they appear to be more of bald and casual statements without really justifying the huge delay of 170 days in refiling.

The IBC provides for a very strict timeline for filing an appeal – Satvir Singh Gulia Vs. Emaar India Ltd. – NCLAT New Delhi Read Post »

‘Contemplate’ would mean to deliberate and consider whether regard being had to the facts and circumstances pleaded, any urgent relief is called for | An ‘urgent interim relief’ would mean that the matter cannot wait for the initial period of three months as required under Section 12A(3) of the Commercial Courts, Act, 2015 – Asa International India Microfinance Ltd. Vs. Northern ARC Capital Ltd. and Anr. – Calcutta High Court

/ 15 minutes of reading

The Hon’ble Calcutta High Court held that:

(i) Section 12A of the 2015 Act requires the court to ascertain whether the suit contemplates any urgent interim relief arising out of a commercial dispute as defined in the said Act.
(ii) ‘Contemplate’ would mean to deliberate and consider whether regard being had to the facts and circumstances pleaded, any urgent relief is called for. It would imply that a die is cast and bolt impending and the act is done in expectation of and with a view to it, or that the dispute is already existing and the act is done in support to one side of it. The judge is required to consider and apply its mind to the facts and take a decision keeping in mind that such relief is ex parte.
(iii) An ‘urgent interim relief’ would mean that the matter cannot wait for the initial period of three months as required under Section 12A (3) of the Commercial Courts, Act, 2015. On a reading of a pleading the court has to be satisfied that if the court does not immediately intervene in spite of plaintiff fulfilling the trinity tests namely, prima facie case, balance of convenience and irreparable loss and injury and allow the plaintiff to institute the suit only after the expiry of the statutory period, it would be an injustice to the plaintiff and the situation may be irreversible.

‘Contemplate’ would mean to deliberate and consider whether regard being had to the facts and circumstances pleaded, any urgent relief is called for | An ‘urgent interim relief’ would mean that the matter cannot wait for the initial period of three months as required under Section 12A(3) of the Commercial Courts, Act, 2015 – Asa International India Microfinance Ltd. Vs. Northern ARC Capital Ltd. and Anr. – Calcutta High Court Read Post »

Merely because a person is a Director of a Company, it is not necessary that he is aware about the day-to-day functioning of the company | There is no universal rule that a Director of a Company is in charge of its everyday affairs – Susela Padmavathy Amma Vs. Bharti Airtel Ltd. – Supreme Court

/ 22 minutes of reading

Hon’ble Supreme Court in NI case, held that:

(i) A person cannot be made liable unless, at the material time, he was in-charge of and was also responsible to the company for the conduct of its business.
(ii) Merely because a person is a director of a company, it is not necessary that he is aware about the day-to-day functioning of the company.
(iii) There is no universal rule that a director of a company is in charge of its everyday affairs.
(iv) The position of a managing director or a joint managing director in a company may be different. These persons, as the designation of their office suggests, are in charge of a company and are responsible for the conduct of the business of the company. To escape liability, they will have to prove that when the offence was committed, they had no knowledge of the offence or that they exercised all due diligence to prevent the commission of the offence.

Merely because a person is a Director of a Company, it is not necessary that he is aware about the day-to-day functioning of the company | There is no universal rule that a Director of a Company is in charge of its everyday affairs – Susela Padmavathy Amma Vs. Bharti Airtel Ltd. – Supreme Court Read Post »

Whether Adjudicating Authority (NCLT) has jurisdiction in matters related to the registration of documents by a statutory body, aligning with the provisions of the Registration Act, 1908 and the Kerala Stamp Act, 1959 – Imelt Extrusions Pvt. Ltd. Vs. The Sub Registrar and Anr. – NCLT Kochi Bench

/ 5 minutes of reading

In this case, Auction Purchaser has challenged the act of Sub Registrar, who issued a letter to the Liquidator refusing to make entry in Book No. 1 on the ground that necessary and applicable stamp duty has not been paid to the Sale Certificate as per Schedule 16 to the Kerala Stamp Act, 1959.

Hon’ble NCLT Kochi Bench has held that:

(i) In the exercise of the powers conferred under the Constitution of India, the Kerala Stamp Act, 1959 was enacted by the State of Kerala.
(ii) The NCLT’s jurisdiction is confined to matters within the scope of insolvency proceedings, and it cannot extend its authority to issues lying beyond the ambit of the Insolvency and Bankruptcy Code.
(iii) In the present context, the filing of an Interlocutory Application by the applicant/successful bidder to register the sale certificate in Book No. 1 without the requisite stamp duty does not exhibit a rational nexus with the insolvency proceedings of the Corporate Debtor.
(iv) In light of the existence of a statutory remedy within the framework of the Kerala Stamp Act, 1959, and the fact that the Applicant has not invoked the available remedy under the aforementioned Act, NCLT lacks jurisdiction over decisions made by statutory authorities in the discharge of their duties.

Whether Adjudicating Authority (NCLT) has jurisdiction in matters related to the registration of documents by a statutory body, aligning with the provisions of the Registration Act, 1908 and the Kerala Stamp Act, 1959 – Imelt Extrusions Pvt. Ltd. Vs. The Sub Registrar and Anr. – NCLT Kochi Bench Read Post »

Voting as contemplated in Section 25A(3A) of IBC is not to be applied when an application under Sec. 12A is to be considered which requires 90% vote shares of the CoC (Homebuyers) – Vijay Saini Vs. Shri Devender Singh and Ors. – NCLAT New Delhi

/ 47 minutes of reading

In this case, Adjudicating Authority held that the Resolution Professional ought to have followed the method prescribed under sub-section 3A of Section 25A and come to a conclusion that since more than 50% of the voting has been done in favour of 12A proposal, he should have taken it as 100% since the Financial Creditor have to be treated as a class.

Hon’ble NCLAT holds that:

(i) The voting under sub-section (3A) which is to be cast by Authorised Representative is to be on the basis of vote of more than 50% of the voting share of the Financial Creditor in a class but the said provision of sub-section (3A) was subject to the proviso which proviso created a different voting pattern for 12A.
(ii) For computing voting with regard to 12A proposal, the voting has to be computed as per Section 25A (3A) proviso r/w Section 25A(3). As per Section 25A(3), if the authorised representative represents several financial creditors, then he shall cast his vote in respect of each financial creditor in accordance with instructions received from each financial creditor, to the extent of his voting share.
(iii) When the statute i.e. Section 12A provides 90% voting for approval of Section 12A proposal, 90% of the voting share of the creditor in class have to be taken into consideration.
(iv) Since voting by each homebuyers who represented creditor in class has to be computed as per his voting share and adding all vote shares of the creditor in class with any other Financial Creditor if it is at least up to 90% only then 12A proposal is held to be passed.
(v) The present is a case where the Resolution Professional is required to conduct the proceeding of the CoC according to the IBC and take a decision on the result of voting. There can be no question of Resolution Professional taking, in the present case, any sides. In so far as computation of votes is concerned, the Resolution Professional is required to compute the votes as per the statute. Hence, the judgment of the Hon’ble Supreme Court in Regen Powertech Private Limited vs. Giriraj Enterprises & Anr. (2023) ibclaw.in 111 SC which was in the facts of the said case cannot be said to be applicable in the present set of facts.

Voting as contemplated in Section 25A(3A) of IBC is not to be applied when an application under Sec. 12A is to be considered which requires 90% vote shares of the CoC (Homebuyers) – Vijay Saini Vs. Shri Devender Singh and Ors. – NCLAT New Delhi Read Post »

An application against termination of contract for essential raw material supply to Corporate Debtor (not a going concern) is not maintainable under Section 60(5)(c) of the IBC, 2016 (residuary jurisdiction) – Sundaresh Bhat RP of JBF Petrochemicals Ltd. Vs. Mangalore Refinery and Petrochemicals Ltd. – NCLT Ahmedabad Bench

/ 4 minutes of reading

In this case, the Respondent informed the Corporate Debtor that since the Corporate Debtor has committed default in buying Paraxylene (Px) and there has been no off –take continuously for three months, the agreement dated 12.04.2016 stands terminated. The RP’s prayer is to direct the Respondent to supply Paraxylene (“Px”) as and when the plant is ready and commissioned.
The Adjudicating Authority held that Paraxylene (“Px”) is essential raw material to be used in the products of Petrochemical Industry so as to make such industry functional. However, in this case, the Corporate Debtor, being in Petrochemical Industry has never been functional at all. Section 14(2A) of IBC, 2016 is to be pressed in service to preserve the status of the Corporate Debtor as a going concern. In this case the Corporate Debtor was never a running unit. It cannot be said that by the termination of the agreement by the Respondent, the Corporate Debtor suffered any erosion of assets during the CIRP.

An application against termination of contract for essential raw material supply to Corporate Debtor (not a going concern) is not maintainable under Section 60(5)(c) of the IBC, 2016 (residuary jurisdiction) – Sundaresh Bhat RP of JBF Petrochemicals Ltd. Vs. Mangalore Refinery and Petrochemicals Ltd. – NCLT Ahmedabad Bench Read Post »

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