Metenere Limited

In case Sale of Resolution Plan approved by CoC to third party as transferring shareholding of Successful Resolution Applicant against terms and conditions of Rplan, CoC can withdraw Rplan which is pending for NCLT approval and forfeit EMD/PBG | CIRP Regulation 36B(4A) does not exclude forfeiture of performance security as per conditions in RFRP – Jubilee Metal Pvt. Ltd. v. Mr. Surendra Raj Gang RP of Metenere Ltd. and Anr. – NCLAT New Delhi

In this case, shareholding of the Successful Resolution Applicant has been changed while Resolution Plan is pending before NCLT for approval.
On IA, NCLT allow withdrawal of Rplan and forfeiture PGB and extended the CIRP time period.
Hon’ble NCLAT has upheld the decision of NCLT Principal Bench, holding that:
(i) The law is well settled and clear that even CoC cannot go back and pray for withdrawal of the Resolution Plan since the plan is clearly binding on the CoC but the above legal position and situation may not apply in a case where after approval of the Resolution Plan by the CoC, the Resolution Applicant himself has breached the terms and conditions and undertaking which was given by him as in the present case.
(ii) Present is a case where in essence we may say it is a case of sale of Resolution Plan approved by the CoC to third party. CoC approves the Resolution Plan looking to the credentials of the Resolution Applicant and its credibility and finances. When very basis of Resolution Applicant is knocked out and it changes its constitution substantially the CoC cannot be faulted in view of breach of the conditions by the Resolution Applicant, application for approval of the Resolution Plan be withdrawn.
(iii) CIRP Regulation 36B(4A) only contemplate one contingency that where performance security shall stand forfeited but the said provision does not exclude forfeiture of performance security in other conditions as contemplated in RFRP.

In case Sale of Resolution Plan approved by CoC to third party as transferring shareholding of Successful Resolution Applicant against terms and conditions of Rplan, CoC can withdraw Rplan which is pending for NCLT approval and forfeit EMD/PBG | CIRP Regulation 36B(4A) does not exclude forfeiture of performance security as per conditions in RFRP – Jubilee Metal Pvt. Ltd. v. Mr. Surendra Raj Gang RP of Metenere Ltd. and Anr. – NCLAT New Delhi Read Post »

Whether a Bank/Financial Institution can institute or continue with proceedings against a Guarantor under the SARFAESI Act, when proceedings under the IBC have been initiated against the Principal Borrower & the same are pending adjudication – Kiran Gupta Vs. State Bank of India & Anr – Delhi High Court

The view expressed by the Supreme Court in State Bank of India v. V.Ramakrishan and Another, reported as [2018] ibclaw.in 29 SC amply demonstrates that neither Section 14 nor Section 31 of the IB Code place any fetters on Banks/Financial Institutions from initiation and continuation of the proceedings against the guarantor for recovering their dues. That being the position, the plea taken by the counsel for the petitioner that all proceedings against the petitioner, who is only a guarantor, ought to be stayed under the SARFESI Act during the continuation of the Insolvency Resolution process qua the Principal Borrower, is rejected as meritless. The petitioner cannot escape her liability qua the respondent/Bank in such a manner. The liability of the principal borrower and the Guarantor remain co-extensive and the respondent/Bank is well entitled to initiate proceedings against the petitioner under the SARFESI Act during the continuation of the Insolvency Resolution Process against the Principal Borrower.

Whether a Bank/Financial Institution can institute or continue with proceedings against a Guarantor under the SARFAESI Act, when proceedings under the IBC have been initiated against the Principal Borrower & the same are pending adjudication – Kiran Gupta Vs. State Bank of India & Anr – Delhi High Court Read Post »

State Bank Of India Vs. M/S Metenere Ltd. – SC

Supreme Court held that the order passed by NCLAT in the matter whether an ex-employee of the Financial Creditor having rendered services in the past, should not be permitted to act as IRP at the instance of such Financial Creditor, regard being had to the nature of duties to be performed by the IRP & RP does not reflect the correct approach, the same shall not be treated as a precedent

State Bank Of India Vs. M/S Metenere Ltd. – SC Read Post »

Whether an ex-employee of the Financial Creditor having rendered services in the past, should not be permitted to act as IRP at the instance of such Financial Creditor, regard being had to the nature of duties to be performed by the IRP & RP – State Bank of India Vs. M/s. Metenere Ltd. – NCLAT

NCLAT held that the fact that the proposed ‘Resolution Professional’ Mr. Shailesh Verma had a long association of around four decades with the ‘Financial Creditor’ serving under it and currently drawing pension coupled with the fact that the ‘Interim Resolution Professional’ is supposed to collate all the claims submitted by Creditors, though not empowered to determine the claims besides other duties as embedded in Section 18 of the ‘I&B Code’ raised an apprehension in the mind of Respondent- ‘Corporate Debtor’ that Mr. Shailesh Verma as the proposed ‘Interim Resolution Professional’ was unlikely to act fairly justifying the action of the Adjudicating Authority in passing the impugned order to substitute him by another Insolvency Professional. Observations of the Adjudicating Authority in the impugned order with regard to ‘Interim Resolution Professional’ to act as an Independent Umpire must be understood in the context of the ‘Interim Resolution Professional’ acting fairly qua the discharge of his statutory duties irrespective of the fact that he is not competent to admit or reject a claim.

Whether an ex-employee of the Financial Creditor having rendered services in the past, should not be permitted to act as IRP at the instance of such Financial Creditor, regard being had to the nature of duties to be performed by the IRP & RP – State Bank of India Vs. M/s. Metenere Ltd. – NCLAT Read Post »

Scroll to Top