01/09/2023

Whether the period excluded by NCLT from the total liquidation process time period should be excluded for the purpose of calculation of the Liquidator’s fee in terms of the slab under Liquidation Process Regulation 4 – Mr. Sanjay Kumar Aggarwal Liquidator of Punjab Basmati Rice Ltd. Vs. Canara Bank – NCLT Chandigarh Bench

NCLT Chandigarh Bench held that:
(i) The liquidator has carried out his responsibility with due diligence and without any prejudice to the applicant or any other stakeholder. A reference is also made to the decision in the case of SIDBI Vs. Shri Vijender Sharma (2022) ibclaw.in 879 NCLAT and Ashish Arjun Kumar Rathi, wherein on similar facts, the Hon’ble NCLAT, Delhi and Chennai, respectively, have allowed exclusion of period of the said liquidation process of the corporate debtor from the calculation of the time taken for realisation and distribution of the assets of the corporate debtor in terms of Regulation 44 read with Regulation 4(3) of the IBBI (Liquidation Process) Regulation 2016.
(ii) In view of the same, we direct that the period of exclusions allowed by this Adjudicating Authority in the orders dated 01.11.2021, 30.03.2022, and 02.02.2023 be also excluded for the computation of the liquidation period for the purpose of calculating the liquidator’s fee slab under Regulation 4 of the Liquidation Process Regulations 2016.
(iii) The Stakeholder Consultation Committee/ respondents-Canara Bank are directed to complete the process of computation of the liquidator fee within 15 days of this order and make the payments thereof within the said period. However, no relief is granted with regard to the other prayers arising out of this main grievance of non-crystallisation of the liquidator’s dues.

Whether the period excluded by NCLT from the total liquidation process time period should be excluded for the purpose of calculation of the Liquidator’s fee in terms of the slab under Liquidation Process Regulation 4 – Mr. Sanjay Kumar Aggarwal Liquidator of Punjab Basmati Rice Ltd. Vs. Canara Bank – NCLT Chandigarh Bench Read Post »

Mr. Hitesh Goel RP of Supertech Ltd. – NCLT Principal Bench

NCLT Principal Bench held that the Corporate Debtor being a Real Estate Project involving legitimate interests of various stakeholders including the homebuyers/ allottees, the issue related to exclusion of period while computing the CIRP period had to be seen from the prism of realism and pragmatic approach should have been adopted by the Adjudicating Authority, considering the fact that the exclusion is sought on the ground that the litigations in respect to the initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor was sub-judice before the Hon‘ble Apex Court.

Mr. Hitesh Goel RP of Supertech Ltd. – NCLT Principal Bench Read Post »

An Insolvency Professional who is engaged to perform his/her duty as a Resolution Professional is entitled to be remunerated by way of paying fees for his labour and work and accordingly the fees and expenses are to be approved by the CoC – Mr. Sanjeev Jhunjhunwala, RP of Goouksheer Farm Fresh Pvt. Ltd. Vs. Mr. Bimal Kanti Choudhury, RP of PM Cold Storage Pvt. Ltd. – NCLT Kolkata Bench

NCLT Kolkata Bench held that:
(i) In our view that an Insolvency Professional who is engaged to perform his/her duty as a Resolution Professional is entitled to be remunerated by way of paying fees for his labour and work and accordingly the fees and expenses are to be approved by the CoC.
(ii) Referred, the judgment passed by the Hon’ble NCLAT in Jayesh N. Sanghrajka, R.P. (2021) ibclaw.in 436 NCLAT and Mr. Mukesh Verma (2022) ibclaw.in 948 NCLT. That it would not be prudent on our part to reduce the fees already fixed and approved at the meeting of the CoC.
(iii) In regard to the fees paid to the Advocates and/or Counsels and /or Professionals appointed by the RP for defending himself, whether the same can be construed as “directly related to acts done or expenses incurred which are necessary for the CIRP” should be decided by the COC, and being its commercial wisdom, we do not intend to interfere with the same.

An Insolvency Professional who is engaged to perform his/her duty as a Resolution Professional is entitled to be remunerated by way of paying fees for his labour and work and accordingly the fees and expenses are to be approved by the CoC – Mr. Sanjeev Jhunjhunwala, RP of Goouksheer Farm Fresh Pvt. Ltd. Vs. Mr. Bimal Kanti Choudhury, RP of PM Cold Storage Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Whether the Section 29 of State Financial Corporation Act, 1951 shall override the provisions of Insolvency and Bankruptcy Code, 2016 – Pankaj Tibrewal RP of Dutta Agro Mills Pvt. Ltd. Vs. West Bengal Industrial Development Corporation – NCLT Kolkata Bench

In this case, the physical possession of Corporate Debtor has been taken over by West Bengal Industrial Development Corporation (WBIDC) (a Financial Corporation comes under the purview of Section 3 of the State Financial Corporation Act, 1951) and all the employees of Corporate Debtor have left the organization and that the physical possession of the factory cum registered office of the Corporate Debtor was under the possession of the WBIDC.
NCLT Kolkata Bench held that:
(i) No authority, post framing of IBC has been cited to substantiate the view that an earlier Special Act (have SFC Act, 1951) with a non obstante clause shall prevail over the IBC which is a later one.
(ii) The CD is a defaulter debtor but the WBIDC the Creditor Corporation is not the owner of the property hypothecated/mortgaged to it by the CD, it is rarely in control over the assets of the CD.
(iii) It is, therefore, explicit by virtue of Section 238 of IBC, the provisions of IBC will prevail over the other Statutes.
(iv) IBC, 2016 is indubitably and indisputably a Special Statute as also a later statute vis-a-vis the SFC Act of 1951, both having non obstante clause. The reach of non obstante clause of SFC Act is limited by Section 46B of the Act, whereas non obstante clause of IBC shows that it prevails in all situations. Thus, IBC as a Special statute has a non obstante clause which does not have a limited reach unlike SFC Act.

Whether the Section 29 of State Financial Corporation Act, 1951 shall override the provisions of Insolvency and Bankruptcy Code, 2016 – Pankaj Tibrewal RP of Dutta Agro Mills Pvt. Ltd. Vs. West Bengal Industrial Development Corporation – NCLT Kolkata Bench Read Post »

Performance of Bank Guarantee is excluded from the definition Section of 3(31) of the Code, 2016 and does not fall under Moratorium in terms of Section 14 of the Code, 2016 – Mr. Vijay Kumar Garg Liquidator of Lanco Vidarbha Thermal Power Ltd. Vs. Power Grid Corporation of India Ltd. – NCLAT Chennai

NCLAT held that:
(i) Undoubtedly, Performance of Bank Guarantee is excluded from the definition Section of 3 (31) of the Code, 2016. The Performance Bank Guarantee does not fall under Moratorium in terms of Section 14 of the Code, 2016.
(ii) The Bank Guarantee is neither an Asset nor a Liability of a Company, the invocation of eleven Performance Bank Guarantees furnished by the Corporate Debtor to the Power Grid Corporation of India Ltd. pursuant to the Transmission Agreement, the connectivity regulations of the Central Commission and the detailed procedure notified thereunder, coupled with the letters dated 17.12.2020 are just valid and legally tenable, which cannot be found fault with, by the Appellant as held by this Tribunal in a cocksure and unequivocal manner.

Performance of Bank Guarantee is excluded from the definition Section of 3(31) of the Code, 2016 and does not fall under Moratorium in terms of Section 14 of the Code, 2016 – Mr. Vijay Kumar Garg Liquidator of Lanco Vidarbha Thermal Power Ltd. Vs. Power Grid Corporation of India Ltd. – NCLAT Chennai Read Post »

In proceeding under Section 7 of IBC, orders passed in the proceedings under Section 13 of the Companies Act, 2013 cannot be questioned – Ishan Singh Vs. Spaze Towers Pvt. Ltd. – NCLAT New Delhi

The document which was sought to be placed by the Appellant on record was the application which was filed by the Corporate Debtor itself seeking for shifting of registered office from NCT of Delhi to State of Haryana before the Regional Director, Ministry of Corporate Affairs. We accept the submission of the Appellant that in proceeding under Section 7 orders passed in the proceedings under Section 13 of the Companies Act, 2013 cannot be questioned. Whether the documents have any relevance or not has to be considered by the Adjudicating Authority after the document is seen. The Respondent has full liberty to raise objection with regard to relevance of the document and to support its submission that it does not improve the case of the Appellant in any manner.

In proceeding under Section 7 of IBC, orders passed in the proceedings under Section 13 of the Companies Act, 2013 cannot be questioned – Ishan Singh Vs. Spaze Towers Pvt. Ltd. – NCLAT New Delhi Read Post »

The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC – SAJ Housing Pvt. Ltd. Vs. Ms. Priyanka Chouhan Liquidator – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) Though the concept of time value of money has not been expressly defined in the IBC, ordinarily understood, time value of money is not only a regular or timely return received for the duration for which the amount is disbursed as an amount in addition to the principal, but also covers any other form of benefit or value accruing to the creditor as a return for providing money for a long duration.
(ii) In the statutory framework of the IBC, there is only limited review available which can be exercised by the Adjudicating Authority without trespassing upon the business decision of the majority of the CoC. The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC so long as it musters more than 66% vote share. And it is here that primacy of the commercial wisdom of the CoC comes into play.
(iii) There can be no fetters on the commercial wisdom of the CoC. The supremacy of commercial wisdom of the CoC has been reaffirmed time and again by the Hon’ble Supreme Court. It is not for the Adjudicating Authority to consider or evaluate on merits the rationale underlying the commercial decision of the CoC.

The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC – SAJ Housing Pvt. Ltd. Vs. Ms. Priyanka Chouhan Liquidator – NCLAT New Delhi Read Post »

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