Login with GoogleOR Username Password Remember Me Forgot Password In case you’ve already logged in, click here to […]
Login with GoogleOR Username Password Remember Me Forgot Password In case you’ve already logged in, click here to
In this important judgment, Hon’ble NCLAT held that:
(i) In the facts of the present case, it is not the case of the Appellant that the Corporate Guarantor and Personal Guarantor have paid the dues of the creditor and thus they are entitled to get in the shoes of the principal creditor. On this single ground claim of Section 140, does not subsist.
(ii) In the present case, debt of the Principal Borrower is being discharged consequent to the Resolution Plan under the IBC.
(iii) When the statute provides that the Resolution Plan is binding on the Guarantors also, Appellants are not entitled to make any submission that they are not bound by Clause 34.50 of the Resolution Plan which expressly extinguishes the right of subrogation.
(iv) The law is well settled that after approval of the Resolution Plan, the Personal Guarantors and Corporate Guarantors have no right of subrogation especially when in the facts of the present case under Clause 34.50 of the Resolution Plan, right of subrogation is expressly extinguished.
(v) The debt against the Corporate Debtor might have extinguished after approval of the Resolution Plan but said consequence shall not be with regard to the Corporate Guarantors and the Personal Guarantors. The same shall be as per the express provisions of the Resolution Plan.
Hon’ble NCLAT held that:
(i) The claim which was submitted in the proceeding and the Successful Resolution Applicant has very well dealt with claim submitted by the Income Tax Department of Rs.3334.29 Crores. Even if the claim for the AY 2012-13 of Income Tax Department cannot be said to be extinguished, Appellant being an Operational Creditor, the liquidation value of the Income Tax Department is NIL. The payment of Rs.10 Lakhs cannot be said to be violative of provisions of Section 30(2)(e).
(ii) Appellants claim for the AY 2012-13 cannot be said to be non-existent, as is the stand taken by the IRP. However, after admitting the aforesaid claim for the AY 2012-13 for total amount of Rs.1157.07 Crores, as claimed by the Appellant, Income Tax Department who has filed claim as Operational Creditor was entitle for amount not less than the amount to be paid in the event of liquidation as per Section 53. It is specifically submitted on behalf of Respondent No. 2 and 3 that liquidation value of the Appellant being NIL, the Appellant was not entitled to receive any amount as per Section 30(2)(b). We, thus, are of the view that no effective relief can be granted to the Appellant in the present Appeal. The treatment of the claim of the Appellant in the Resolution Plan cannot be said to be in violation of Section 30(2)(e).
By the Impugned Order dated 07th March, 2023, the Adjudicating Authority issued direction for appropriation of amount of Rs. 750 Crores as per the Judgment of the Hon’ble Supreme Court, reported at (2021) ibclaw.in 63 SC.
NCLAT held that:
(i) In Company Appeal (AT) (Ins.) No. 302 of 2023, we have taken the view that direction of the Adjudicating Authority in Para 111 for payment of proportionate interest to the JIL on its receivables is unsustainable. Company Appeal (AT) (Ins.) No. 302 of 2023 thus deserves to be partly allowed setting aside the direction of the Adjudicating Authority in Para 111 to make payment of proportionate interest on the receivables by JIL. Other prayers of the Appellant in Company Appeal (AT) (Ins.) No. 302 of 2023 are rejected.
(ii) In Company Appeal (AT) (Ins.) No. 507 of 2023, finding of issues no. (a), (d) and (e) (as contained in Para 13 of the impugned order) deciding issues in favour of JAL are unsustainable. The JAL was not entitled to adjust/deduct aforesaid amounts from the amount receivable by JIL. We notice that the Adjudicating Authority in operative portion of the order in Paras 109 to 111 has ultimately not deducted or adjusted the aforesaid amounts from the amount receivable by JIL. The direction issued by the Adjudicating Authority in Para 109, 110 and 111 are affirmed except the direction to proportionate interest, as indicated above. Company Appeal (AT) (Ins.) No. 507 of 2023 is thus disposed of holding that findings of Adjudicating Authority on Issues No. (a), (b), (d) and (e) are unsustainable.
Jaiprakash Associates Ltd. Vs. Jaypee Infratech Ltd. – NCLAT New Delhi Read Post »
Login with GoogleOR Username Password Remember Me Forgot Password In case you’ve already logged in, click here to
NCLAT held that since order of the Adjudicating Authority dated 07.03.2023, which has virtually extinguished the claim of the Appellant of additional farmers compensation by allocating an amount of INR 10 lakhs, which according to the Respondents is the amount to which the Appellant is entitled and the said judgment under challenge in this Appeal, we have found substantial ground to entertain this Appeal and hear the Appeal. We are of the view that the impugned judgment of the Adjudicating Authority, insofar as determination of the claim of the Appellant regarding additional compensation, shall not be relied for any determination between the Appellant and the Corporate Debtor regarding liability and entitlements of respective parties in respect of bearing of the additional farmers compensation claim.
In the meantime, we direct that impugned order dated 07.03.2023 insofar as it determines the claim of the Appellant regarding additional farmers compensation shall not be relied in determination of rights and liabilities of the Appellant and the Corporate Debtor in the pending proceedings in Arbitration Case pending before the Commercial Court.
NCLAT makes it clear that pendency of this Appeal and the above interim order may not be treated as any restraint in implementation of the Plan insofar as other aspects of the Plan are concerned. List the Appeal for hearing on 29th May, 2023.
Login with GoogleOR Username Password Remember Me Forgot Password In case you’ve already logged in, click here to
Bank of Baroda Vs. Anuj Jain, Interim RP Jaypee Infra Tech Ltd. & Ors. – NCLAT New Delhi Read Post »
Summary of judgment of NCLT (total 365 pages judgment) in approval of Resolution Plan of Consortium of M/s. Suraksha Realty Limited and M/s. Lakshdeep Investments and Finance Private Limited for Jaypee Infratech Limited (JIL) (Corporate Debtor) is now available in IBC Laws database.
Following are silent points of the summary:
• (1) Whether a Secured Creditor is entitled to choose the security interest of its own choice for enforcing?
• (2) Whether dissenting secured creditors have right to recover cost of enforcing security interest in case of enforced security interest?
• (3) Whether a Secured Creditor can be treated as an Unsecured Creditor and will be entitled to both the benefits under Section 53(1)(b)(ii) and Section 53(1)(d) both simultaneously??
• (4) Whether YEIDA is Secured Creditors as per Rainbow Decision?
• (5) Whether a Resolution Plan would have given immunity to the personal guarantors from that debt?
• (6) Whether Personal Guarantor has right to subrogation?
• (7) Other such as termination of the maintenance agreement etc.
Further, the Successful Resolution Applicant (SRA)/Suraksha has sought for 38 “Reliefs and Concessions”, some are: (i) Legal proceedings relating to Income Tax, (ii) Waived all the procedural requirements in terms of Section 66, Section 42, Section 62, Section 71 of the CA, 2013 in relation to reduction of share capital of the Corporate Debtor, (iii) Waiver from payment of stamp duty (iv) Non-compliances of the Corporate Debtor or further claims of the Governmental Authorities, (iv) Regularization all the loan accounts of the Corporate Debtor (v) Withdraw all legal proceedings, (vi) Initiation of any investigations, actions or proceedings against the Corporate Debtor, (vi) Resolution Applicants reserve their right to institute any investigation pertaining to any transaction(s) carried out by the ex-management of the Corporate Debtor, (vii) Necessary permissions or approvals under the Banking Regulation Act 1949, (vii) claim set-off of the entire Minimum Alternate Tax (MAT) credit as available to the Corporate Debtor, against the normal income-tax (viii) Losses already lapsed/not lapsed as on the Approval Date should be allowed to be carried forward, (ix) Capital gains/business income to the Corporate Debtor, (x) past litigations pending (xi) Waived of penalty (xii) Removal of the existing auditors of the Corporate Debtor etc.
JIL has already been represented in the reconciliation process through its IRP. In our view, there cannot be two representations on behalf of JIL, especially when the resolution plan submitted by the Applicant/SRA is yet to be approved by this Adjudicating Authority and it has yet to step into the shoes of the Corporate Debtor. At present, the status of the Applicant/SRA is of only a stakeholder of the Corporate Debtor and not the Corporate Debtor itself, which is represented by the IRP. The reconciliation process was intended by the Hon’ble Supreme Court to be carried out solely between JIL and JAL and it has been specifically held that the reconciliation process is “…otherwise not be treated as determinative of the rights and obligations of any stakeholder in any of these two companies, JAL and JIL..”, therefore, we are of the view that the Successful Resolution Applicant has no say in the reconciliation process, till the time its Resolution Plan is approved by this Adjudicating Authority.
