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An Order under Section 17 of Arbitration and Conciliation Act, 1996 insofar as it affects the rights and remedies of third party secured creditors deserves to be set aside – Asset Reconstruction Company India Ltd. v. ATS Infrastructure Ltd. & Ors. – Delhi High Court

Hon’ble High Court of Delhi held that:
(i) The appellant may be entitled to exercise its rights under the SARFAESI Act, 2002 and/or under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (DRT Act) but the Impugned Order insofar as it infringes upon the contractual rights and entitlements of the appellant (an unconnected third party to an arbitration between the respondents), deserves to be set aside irrespective of any other legal rights the appellant may have.
(ii) It is settled in law that an arbitral tribunal has no jurisdiction to affect the rights and remedies of third party secured creditors in the course of determining disputes pending before it.

An Order under Section 17 of Arbitration and Conciliation Act, 1996 insofar as it affects the rights and remedies of third party secured creditors deserves to be set aside – Asset Reconstruction Company India Ltd. v. ATS Infrastructure Ltd. & Ors. – Delhi High Court Read Post »

For institution of prosecution under Section 70(1)(c) of IBC, there has to be prima facie satisfaction that papers which have been sought for, are in his control or custody which is not being given by the Corporate Debtor – Avneesh Kumar Singh & Anr. Vs. Rakesh Kumar Jain, RP of SN Jee Buildwell Pvt. Ltd. & Ors. – NCLAT New Delhi

Section 70(1)(c) of IBC provides that when Corporate Debtor does not deliver to the resolution professional all books and papers in his control or custody belonging to the corporate debtor and which he is required to deliver, he shall be punishable with imprisonment for a term which shall not be less than three years. Essential fact to be found is “the papers and books in his control or custody”. There has to be prima facie satisfaction that papers which have been sought for, are in his control or custody which is not being given by the Corporate Debtor, which may lead to a reference for institution of prosecution. From the facts, which has been brought on record, it is clear that total thirty-seven documents were asked for by the RP, which all were provided except Sr. No. 27. There is also no finding that this document at Sr. No. 27 is in the possession of either of the Appellants. It held that we thus are of the view that Direction for initiating prosecution was uncalled for. We thus are satisfied that direction in the Order dated 22.10.2021 directing for instituting prosecution deserved to be set aside and is hereby set aside.

For institution of prosecution under Section 70(1)(c) of IBC, there has to be prima facie satisfaction that papers which have been sought for, are in his control or custody which is not being given by the Corporate Debtor – Avneesh Kumar Singh & Anr. Vs. Rakesh Kumar Jain, RP of SN Jee Buildwell Pvt. Ltd. & Ors. – NCLAT New Delhi Read Post »

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