03/07/2023

A set off benefit under Liquidation Regulation 29 cannot be claimed during Liquidation Process where the due amount was demanded by Resolution Professional(RP) during the CIRP but not paid – Ritu Tandon Vs. M/s Rain Automotive India Pvt. Ltd. – NCLAT New Delhi

During the CIRP, the RP requested the Appellant to refund the amount of security deposit as it was the part of the estate of the Corporate Debtor and could not have been retained by the Appellant in view of prohibition contained in Section 14(1)(c) of the Code but the Appellant did not abide by it nor claim a set off in Form B which was submitted by her to the RP. Therefore, it was only an afterthought on the part of the Appellant who had perhaps waited for the initiation of the liquidation proceedings and at that time the claim of set off, in terms of the provisions of Liquidation Regulation 29 of the Regulations, as alleged was raised.
NCLAT held that had it been a case where the RP had not even asked for the amount of security to be returned as it could not have been retained by the Appellant in view of Section 14(1)(c) of the Code or a case where RP had not gone to the Adjudicating Authority in a case where the Appellant had claimed a set off despite the provisions of Section 14(1)(c) then the matter would have been altogether different and perhaps the Appellant might have been right in its approach because there is no dispute that the rigours of Section 14 would come to an end as soon as the liquidation order is passed but the Appellant cannot be allowed to take advantage of its own wrong.

A set off benefit under Liquidation Regulation 29 cannot be claimed during Liquidation Process where the due amount was demanded by Resolution Professional(RP) during the CIRP but not paid – Ritu Tandon Vs. M/s Rain Automotive India Pvt. Ltd. – NCLAT New Delhi Read Post »

A Trading Member of National Stock Exchange is a Financial Service Provider in terms of Section 3(17) of IBC 2016, CIRP u/s 7, 9 & 10 cannot be initiated – Globe Capital Market Ltd. Vs. Narayan Securities Ltd. – NCLT New Delhi Bench Court-II

In this important judgment, the Adjudicating Authority held that mere holding of a Decree/Award per se by an individual will not make its debt fall within the ambit of “Financial Debt”. Following points to be considering in the decree/award:
a) a Decree/Award of the Court/Tribunal is a measure of debt,
b) mere holding of a Decree per se by an individual will not make its debt fall within the ambit of “Financial Debt”,
c) it is the underlying claim under a decree that will decide the nature of the debt, whether it is Financial or Operational debt.
In our considered view, the amount claimed by the Applicant out of the Arbitral Award dated 24.09.2021 is neither based on any transaction having the time value of money nor the commercial effect of borrowing. At the most, the claims of the Applicant (other than brokerage, fee, etc.) could be in the nature of “damages” which do not fall within the ambit of Financial Debt.
The Respondent was providing “Financial Services” in terms of Section 3(16)(d) of IBC 2016. the Respondent was registered with SEBI, which is evident from the “Clearing Member – Trading Member Agreement dated 09.03.2017”. Since, the Respondent was registered with SEBI, the Services of the Respondent could be regulated by SEBI, which is covered under the definition of “Financial Sector Regulator” under Section 3(18) of IBC 2016.

A Trading Member of National Stock Exchange is a Financial Service Provider in terms of Section 3(17) of IBC 2016, CIRP u/s 7, 9 & 10 cannot be initiated – Globe Capital Market Ltd. Vs. Narayan Securities Ltd. – NCLT New Delhi Bench Court-II Read Post »

The benefit of Holidays can be availed only in period of limitation of 30 days, holidays cannot be excluded in condonation period of 15 days, in appeal u/s 61 of IBC before NCLAT – Sandeep Anand Vs. Gopal Lal Baser RP Wianxx Impex Pvt. Ltd. – NCLAT New Delhi

In this case, an application is filed praying for condonation of delay. Under Section 61(2) proviso, the jurisdiction to condone the delay conferred to NCLAT is only 15 days. The ground taken in paragraph 5 of the affidavit is that 7th April was declared as a ‘Public Holiday’ and 8th and 9th being holiday, the appeal is treated to be filed within 45 days. NCLAT held that we are of the view that the benefit as claimed in paragraph 5 is not available which benefit can be availed only with respect to the period of limitation provided with regard to period of 30 days. We, thus, are of the view that the delay in filing the appeal being beyond 15 days, the application praying for condonation of delay has to be dismissed.

The benefit of Holidays can be availed only in period of limitation of 30 days, holidays cannot be excluded in condonation period of 15 days, in appeal u/s 61 of IBC before NCLAT – Sandeep Anand Vs. Gopal Lal Baser RP Wianxx Impex Pvt. Ltd. – NCLAT New Delhi Read Post »

Section 7 of the IBC, CIRP can be initiated against a Corporate entity who has given a guarantee to secure the dues of a non-corporate entity as a financial debt accrues to the corporate person, in respect of the guarantee given by it, once the borrower commits default – Intec Capital Ltd. Vs. Shwet Biotech Pvt. Ltd. – NCLAT New Delhi

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Section 7 of the IBC, CIRP can be initiated against a Corporate entity who has given a guarantee to secure the dues of a non-corporate entity as a financial debt accrues to the corporate person, in respect of the guarantee given by it, once the borrower commits default – Intec Capital Ltd. Vs. Shwet Biotech Pvt. Ltd. – NCLAT New Delhi Read Post »

When there is no valid tenancy since unregistered Rent agreement beyond 12 months is not valid, Adjudicating Authority did not commit any error in directing for handing over the possession of the factory premises to the Resolution Professional – Kuldeep Anopsinh Chudasma Vs. Sunil Kumar Agarwal RP of Yogiraj Spinning Ltd. & Ors. – NCLAT New Delhi

NCLAT held that the basis of the argument is the rent deed which is a rent deed for a period of 61 months, an unregistered document. It is settled law that no rent agreement beyond 12 months can be executed by unregistered document. The Adjudicating Authority has rightly not relied on the said rent deed to accept the Respondent No. 4 as a valid tenant. When there is no valid tenancy in favour of Respondent No. 4, Adjudicating Authority did not commit any error in directing for handing over the possession of the factory premises to the Resolution Professional.

When there is no valid tenancy since unregistered Rent agreement beyond 12 months is not valid, Adjudicating Authority did not commit any error in directing for handing over the possession of the factory premises to the Resolution Professional – Kuldeep Anopsinh Chudasma Vs. Sunil Kumar Agarwal RP of Yogiraj Spinning Ltd. & Ors. – NCLAT New Delhi Read Post »

CIRP against M/s Zee Entertainment Enterprises Ltd. is closed – Punit Goenka Vs. IndusInd Bank Ltd. & Anr. – NCLAT New Delhi

A joint I.A. has been filed by both the parties bringing on record the settlement agreement dated 29.03.2023 reached between the Bank as well as Zee Entertainment Enterprises Limited. As per the settlement agreement, before 30.06.2023 all payments have been made. Impugned order dated 22.02.2023 is set aside. CIRP against the Corporate Debtor is closed.

CIRP against M/s Zee Entertainment Enterprises Ltd. is closed – Punit Goenka Vs. IndusInd Bank Ltd. & Anr. – NCLAT New Delhi Read Post »

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