10/10/2023

Adjudicating Authority cannot reverse the decision of Liquidator supported by Stakeholders Consultation Committee(SCC) to avail “Vivad Se Vishwas-II (Contractual Disputes) Scheme”, launched by Department of Expenditure, Ministry of Finance – Sanjeev Kumar Mishra Vs. Nirmal Kumar Agarwal, Liquidator of Abhijeet Hazaribagh Toll Road Ltd. – NCLT Kolkata Bench

In this case, the IA was preferred an Operational Creditor challenging the propriety of the decision taken by Stakeholders Consultation Committee to seek benefit of Vivad Se Vishwas-II (Contractual Disputes) Scheme.

NCLT Kolkata Bench held that it is almost trite, axiomatic and settled law that Adjudicating Authority cannot act as a Court of equity or exercise plenary powers to unilaterally reverse the decision of the Liquidator based on commercial wisdom and supported by the stakeholders. That apart the Applicant being an Operational Creditor, with claim worth four lakhs should not be allowed to oppose the move or question the wisdom of the Stakeholders Consultation Committee Members.

Adjudicating Authority cannot reverse the decision of Liquidator supported by Stakeholders Consultation Committee(SCC) to avail “Vivad Se Vishwas-II (Contractual Disputes) Scheme”, launched by Department of Expenditure, Ministry of Finance – Sanjeev Kumar Mishra Vs. Nirmal Kumar Agarwal, Liquidator of Abhijeet Hazaribagh Toll Road Ltd. – NCLT Kolkata Bench Read Post »

Operational Creditor being a participant in the meeting of the committee of creditors (CoC) has no right to seek a copy of the Information Memorandum(IM) – Vinay Kumar Singhal RP for PG Advertising Pvt. Ltd. Vs. Mahesh Bajaj – NCLAT New Delhi

The issue involved in this case is as to whether copy of information memorandum can be ordered to be given to the Respondent (Operational Creditor) who is merely a participant in the CoC and not a member?

Hon’ble NCLAT held that:
(i) There is no definition of member provided in the Code or the Regulations which has been repeatedly used in the Code as well as Regulations.
(ii) The Code and Regulations are totally silent about the supply of the information memorandum to the participant, it has to be inferred that the legislature has made a provision for providing a copy of the information memorandum to the member of the CoC and the Resolution Applicant but not to the participant of the meeting of the CoC
(iii) The Operational Creditor being a participant in the meeting of the CoC has no right to seek a copy of the information memorandum.

Operational Creditor being a participant in the meeting of the committee of creditors (CoC) has no right to seek a copy of the Information Memorandum(IM) – Vinay Kumar Singhal RP for PG Advertising Pvt. Ltd. Vs. Mahesh Bajaj – NCLAT New Delhi Read Post »

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court

In this case, IOCL invoked arbitration on 11.07.2017. On 02.08.2017 CIRP was initiated against Essar Steel. IOCL filed its claim. RP allotted Re. 1 as notional amount stating that the remaining claim amount is not admitted because of pending dispute with respect to this claim as the arbitration proceedings were initiated by IOCL. Post CIRP, IOCL filed this petition u/s 11 of the Arbitration Act.

Hon’ble High Court held that:

(i) The Successful Resolution Applicant is only bound to meet the claims as may have been accepted and ultimately form part of the approved Resolution Plan. This issue assumes seminal importance since the Successful Resolution Applicant cannot be left open to defend or oppose claims which are either not factored in the Resolution Plan nor can it be left to fend off actions that may be brought with respect to alleged or asserted dues of the Corporate Debtor which were not admitted.

(ii) Approval of the Resolution Plan clearly amounts to the extinguishment of all debts that were owed by the Corporate Debtor except to the extent as was admitted in the Resolution Plan. The IBC and the resolution process does not contemplate matters being left inchoate. In fact, and to the contrary it exhorts one to accept the seal of finality and quietitude which stands attached to the approval of a Resolution Plan.

(iii) Jurisdiction also bids High Courts to ensure that dead disputes are not revived and parties forced to undertake arbitration.

(iv) The Court while considering the issue of reference would refuse to do so only in situations where either the arbitration agreement is found to be non-existent, where the claim can ex facie be said to be unenforceable in law say for instance where it is barred by the statute of limitation or where the dispute of which reference is sought falls within the genre of non-arbitrability.

(v) A refusal to refer would be justified when there is not “even a vestige of doubt” with respect to non-arbitrability or where it is evident that the matter is “demonstrably non-arbitrable”.

(vi) A reference of the disputes as sought by the petitioner would clearly amount to a reopening of the Resolution Plan and which is clearly impermissible in light of the finality which was accorded by the decision of the Supreme Court in CoC of Essar Steel India Ltd. (2019) ibclaw.in 07 SC.

(vii) The petition fails and shall stand dismissed.

Whether approval of Resolution Plan under IBC results in an extinguishment of a claim which was admitted for a notional amount of Re. 1 only because of arbitration was already invoked prior to admission of CIRP and Whether after approval of Resolution Plan, the claim can be said to be unenforceable in law and the dispute falls within the genre of non-arbitrability – Indian Oil Corporation Ltd. Vs. Arcelor Mittal Nippon Steel India Ltd. – Delhi High Court Read Post »

Promoter/Suspended Director of the Corporate Debtor have no locus standi in regard to CIRP Costs, the said issue is only between a Resolution Professional and CoC and NCLT/NCLAT is not empowered to have the jurisdiction of a Civil Court to determine all controversies, touching upon the formation/members/constitution of SRA – Mr. G. Balasubramaniam Vs. CA Mahalingam Suresh Kumar RP for GBJ Hotels Pvt. Ltd. – NCLAT Chennai

Hon’ble NCLAT held that:

(i) A Trust can furnish the Resolution Plan and a Trust can be a Resolution Applicant.
(ii) It is not out of place for this Tribunal, to make a pertinent mention, that Section 3(23)(d) of the Code, under the caption person includes Trust and the General Clauses Act defines person includes Trust.
(iii) An Adjudicating Authority/Tribunal is not to determine the matters, pertaining to a ‘disputed question of fact’. It must be borne in mind, that Section 60(5) of the Code, 2016 is not an all pervasive section, showering jurisdiction, to the Appellate Authority/Tribunal to determine any question pertaining to the Corporate Debtor.
(iv) If a law, is laid down under the Code, 2016, to do a ‘particular act’ in a ‘certain manner’, an Adjudicating Authority/Tribunal cannot exercise this jurisdiction, under sub-Section (2) Section 60 of the Code, to override the specification already mentioned in the Code, by giving interpretation, quite contra, to the mandate, in the particular section.
(v) In regard to CIRP costs, the Appellants’ have no locus standi, because of the fact that the said issue is only between a Resolution Professional and the Committee of Creditors.
(vi) One cannot remain in oblivion of the prime fact that nowhere in the code or in the Regulations, there is a specification that the Resolution Applications is to match the Liquidation value, of the Corporate Debtor.

Promoter/Suspended Director of the Corporate Debtor have no locus standi in regard to CIRP Costs, the said issue is only between a Resolution Professional and CoC and NCLT/NCLAT is not empowered to have the jurisdiction of a Civil Court to determine all controversies, touching upon the formation/members/constitution of SRA – Mr. G. Balasubramaniam Vs. CA Mahalingam Suresh Kumar RP for GBJ Hotels Pvt. Ltd. – NCLAT Chennai Read Post »

On the date when cheque is handed over the payment shall be treated to have been made – Pratim Bayal RP of Rajpratim Agencies Pvt. Ltd. Vs. Tata Motors Finance Solutions Ltd. – NCLAT New Delhi

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On the date when cheque is handed over the payment shall be treated to have been made – Pratim Bayal RP of Rajpratim Agencies Pvt. Ltd. Vs. Tata Motors Finance Solutions Ltd. – NCLAT New Delhi Read Post »

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