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Operational creditor has filed a petition under Section 9 of IBC, 2016 for initiation of Corporate Insolvency Resolution Process. However, during the said proceedings, Mr. Vijender Kumar Jain expired intestate leaving behind 5 legal heirs. The four legal heirs have executed relinquishment deed in favour of the applicant. It is stated that the said application is filed with limitation i.e. 90 days of the death.
The respondent has stated that legal heirs are not covered under the definition of the operational creditors as defined under Section 5(20) of IBC, 2016. The definition of person as used under Section 5(20) of IBC, 2016 is prescribed under Section 3(23) of IBC, 2016.
In this case, the Personal Guarantor submitted the repayment plan to the Creditor and the same was rejected with a voting share of 74.32%. As per Section 111 of the IBC, the repayment plan submitted by the Personal Guarantor shall be approved by majority of three-fourth in value of the Creditor. Hence, it is clear that the said repayment plan was rejected by the Creditors. In view of the report the Insolvency Resolution process ordered against the Personal Guarantor is concluded. The creditors are at liberty to move an Application u/s 121 of the IB Code. The creditors are directed to pay the fee and expenses incurred by the RP as per the provisions of law.
The Adjudicating Authority held that no rights arise till such registration takes place. The completion of the transaction by having the name entered in the register of members relates it back to the time when the transfer was first made. The company recognises no person except one whose name is on the register of members, upon whom alone calls for unpaid capital can be made and to whom only the dividend declared by the company is legally payable. Of course, between the transferor and the transferee, certain equities arise even on the execution and handing over of ‘a blank transfer’, and among these equities is the right of the transferee to claim the dividend declared and paid to the transferor who is treated as a trustee on behalf of the transferee.
The Adjudicating Authority held that Notice was issued to the Respondents but none appeared on behalf of the Respondents. However, even if the respondents have appeared, no right of audience is available to them under the relevant provisions of Section 95 or 97. It is only under Section 100(3) that the Adjudicating Authority shall provide a copy of the order passed under Subsection (1) to the Creditors. Hence, in terms of Section 97 & 100 of IBC, 2016 no right of audience can be given to the Respondents at a stage before appointing the IRP. In support of the said reasoning, a judgment of the Bombay High Court in Surendra B. Jiwrajka vs Omkara Assets Reconstruction (2021) ibclaw.in 26 HC can be looked into.
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NCLAT held that the Transfer of Assets among the Group Companies ex-facie is not a Fraudulent Trading, as per Section 66(1) of the Insolvency & Bankruptcy Code, 2016. Moreover, because of the fact that all Transactions between the Companies as well as the Asset details were maintained in a Transparent Manner on an SAP System (including the Fixed Assets Register) and further the Transactions of the Corporate Debtor and the 1st Respondent were Audited, every year, the Plea of Fraudulent Trading as projected by the Appellant/Applicant is not proved, to the subjective satisfaction of this Tribunal, in a convincing manner.
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Raj Radhe Finance Ltd. Vs. Shree Shrinathji Spintex Pvt. Ltd. – NCLT Ahmedabad Bench Read Post »
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