08/09/2023

Waiver of the procedural requirement under Section 230-232 of the Companies Act, 2013 in case of Merger/Amalgamation of Companies proposed in the Resolution plan approved u/s 31 of IBC – SLD Steels Pvt. Ltd. – NCLT Bengaluru Bench

The contention of the Successful Resolution Applicant is that since the Resolution Plan contained the proposal of the Merger also, it should be deemed to have been approved without following procedural requirements provided u/s 230-232 of the Companies Act, 2013.

NCLT Bengaluru Bench referred the decision of the Hon’ble NCLAT in the case of Synergies Dooray Automotive Ltd. & Ors. [2018] ibclaw.in 102 NCLAT, held that it was nowhere decided that the procedure prescribed u/s 230-232 of the Companies Act, 2013 have to be ignored/waived; and by merely filing a Merger proposal along with the Resolution Plan, the Merger per se should be deemed to have been approved; in case the Resolution Plan is approved. Hon’ble NCLAT held that Merger/Amalgamation of Companies can be proposed in the Resolution plan; but no finding was given regarding the Waiver of the procedural requirement under relevant provisions i.e. u/s. 230-232 of the Companies Act, 2013.

Waiver of the procedural requirement under Section 230-232 of the Companies Act, 2013 in case of Merger/Amalgamation of Companies proposed in the Resolution plan approved u/s 31 of IBC – SLD Steels Pvt. Ltd. – NCLT Bengaluru Bench Read Post »

Interest cannot be clubbed with the Principal amount for the purpose of threshold requirement under Section 9 of IBC unless there is an express provision for such addition in the Agreement, Work order or the Invoices – J Rajendra Naidu Vs. Amma Construction India Pvt. Ltd. – NCLT Bengaluru Bench

NCLT Bengaluru Bench held that it is relevant to point out that interest cannot be clubbed with the Principal amount for the purpose of threshold requirement under Section 9 unless there is an express provision for such addition in the Agreement, Work order or the Invoices. This has been affirmatively decided by various Authorises as follows: Hon’ble NCLAT order in Mr. Prashant Agarwal v. Vikas Parasrampuria (2022) ibclaw.in 509 NCLAT; NCLT, Kolkata Bench in M/s Plastofab Vs. Electroteknica Switchgears Pvt. Ltd. dated 20.02.2022 (2022) ibclaw.in 358 NCLT, and order dated 25.05.2023 of this Tribunal in North West Carrying Company, LLP Vs. Metro Cash and Carry India Pvt. Ltd. (2023) ibclaw.in 237 NCLT.

Interest cannot be clubbed with the Principal amount for the purpose of threshold requirement under Section 9 of IBC unless there is an express provision for such addition in the Agreement, Work order or the Invoices – J Rajendra Naidu Vs. Amma Construction India Pvt. Ltd. – NCLT Bengaluru Bench Read Post »

Any individual homebuyer or association cannot maintain any challenge to the Resolution Plan – S. Viswanathan Vs. Mr. Vinay Mruthyunjaya RP Metrik Infraprojects Pvt. Ltd. – NCLT Bengaluru Bench

NCLT Bengaluru Bench held that the Hon’ble Supreme Court in the matter of ‘Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors’, dated 24.03.2021, (2021) ibclaw.in 63 SC’, has held that “In our view, after approval of the resolution plan of NBCC by CoC, where homebuyers as a class assented to the plan, any individual homebuye or association cannot maintain any challenge to the resolution plan nor could be treated as carrying any legal grievance”. It is pertinent to note that only a single homebuyer has filed this instant petition against the approval of the resolution plan and the main grievances raised by the said homebuyer is only related to the amenities in the Block. Therefore the Petitioner not holding any legal grievance.

Any individual homebuyer or association cannot maintain any challenge to the Resolution Plan – S. Viswanathan Vs. Mr. Vinay Mruthyunjaya RP Metrik Infraprojects Pvt. Ltd. – NCLT Bengaluru Bench Read Post »

Mere filing of a suit for recovery or the Decree passed by a Court cannot shift forward the Date of Default and accordingly the Date of Default cannot be shifted to the Date of Decree – Metenere Global Ltd. Vs. MLC Estates LLP – NCLT Bengaluru Bench

NCLT Bengaluru Bench held that the mere filing of a suit for recovery or the Decree passed by a Court cannot shift forward the ‘Date of Default’ and accordingly the Date of Default cannot be shifted to the Date of Decree. In this case, the Applicant has chosen the Date of Default of 09.07.2014 as subsequent to the Date of Decree of 10.04.2014. However, for the purpose of limitation they have further claimed that the subsequent sequence of the challenges to the Decree including the IAs filed in the City Civil Court and the Writ Petition and the SLP filed in the Hon’ble High Court of Karnataka and the Hon’ble Apex Court by the Corporate Debtor will extend the limitation period, which is not acceptable in view of the above decision.

Mere filing of a suit for recovery or the Decree passed by a Court cannot shift forward the Date of Default and accordingly the Date of Default cannot be shifted to the Date of Decree – Metenere Global Ltd. Vs. MLC Estates LLP – NCLT Bengaluru Bench Read Post »

Claim against additional cost/interest imposed by Commercial Court during the moratorium period cannot be admitted in CIRP – SourcePro Service Vs. Mr. Vinay Mruthyunjaya RP Metrik Infraprojects Pvt. Ltd. – NCLT Bengaluru Bench

In this case, the insolvency proceedings against the Corporate Debtor was initiated on 16.04.2021. The Commercial Court passed the order on 22.04.2021, which is Post commencement of CIRP against the Corporate Debtor and the Court, in addition to the Principal amount of debt, has also directed the Corporate Debtor to pay interest, cost of the suit, execution cost and advocate fees.
NCLT Bengaluru Bench held that it is observed that these additional cost imposed by the Commercial Court is against the moratorium imposed by this Tribunal. Hence, it is concluded that the Resolution Professional has not erred in admitting the only Rs. 30,42,927/- which is the amount outstanding till the date of commencement of the CIRP.

Claim against additional cost/interest imposed by Commercial Court during the moratorium period cannot be admitted in CIRP – SourcePro Service Vs. Mr. Vinay Mruthyunjaya RP Metrik Infraprojects Pvt. Ltd. – NCLT Bengaluru Bench Read Post »

Securing cash flow arising out of lease agreement by Debenture Trustee of a Lessor, on rental are being paid by Corporate Debtor cannot be equated with a Financial Debt under IBC – Axis Trustee Services Ltd. Vs. Mr. Vijaykumar V. Iyer – NCLT Mumbai Bench

Vide Master Lease Agreement certain assets were given by Bhavna Asset Operators Pvt. Ltd. (BAOPL) to the Corporate Debtor on an operating lease basis and the CD was required to pay monthly lease rentals on each payment date. BAOPL, CD and the Debenture trustee also entered into a Tripartite Agreement. BAOPL defaulted in payment of its obligations under the debentures. The Debenture trustee, therefore, lodged its claim on as a Financial Creditor of the CD which had guaranteed to make the outstanding payments due and payable by BAOPL.

NCLT Mumbai Bench held that:
(i) The obligations of BAOPL in respect of NCDs are to be secured, inter alia, by the creation of first ranking exclusive mortagage over the cash flows and receivables arising out of the MLA and all cash flows and receivable arising out of the MLA are to be directly deposited by CD into an escrow account. Hence, in our view a liability or obligation to pay the lease rentals cannot be equated with a financial debt nor can it be said that the CD stood as guarantor for payment of the NCDs.
(ii) As per the Code, for a person to be designated as a financial creditor of the CD, it has to be shown that the CD owes a financial debt to such person. As already stated, the obligation of the CD is to make payments of lease rentals and other charges to BAOPL as per the terms of MLA.
(iii) Therefore, the essence of the Transaction Documents cannot be taken to be falling within the definition of a financial debt so far as CD is concern. Therefore, the relief sought in the IAs cannot be granted.
Lessor

Securing cash flow arising out of lease agreement by Debenture Trustee of a Lessor, on rental are being paid by Corporate Debtor cannot be equated with a Financial Debt under IBC – Axis Trustee Services Ltd. Vs. Mr. Vijaykumar V. Iyer – NCLT Mumbai Bench Read Post »

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