11/07/2023

The period of CIRP cannot be extended on the flimsy grounds much beyond the period of 330 days – Dr. Palani G Periasamy Vs. CA M. Suresh Kumar Liquidator, Dharani Sugars and Chemicals Ltd. & Anr. – NCLAT Chennai

/ 9 minutes of reading

NCLAT held that we could not find any substance in the argument of Counsel for the Appellant because the CoC had time and again extended the period which was allowed by the Adjudicating Authority but two resolution plans in respect of the Corporate Debtor were rejected with the majority of the vote of 91.92% by the CoC and at that time the CoC was aware that 330 days time period in respect of the Corporate Debtor had already been over. Moreover, it has been categorically observed by the Adjudicating Authority that neither any plan was pending nor any application under Section 12A of the Code was pending for their consideration, therefore, the period of CIRP cannot be extended on the flimsy grounds much beyond the period of 330 days as has been held by the Hon’ble Supreme Court in the case of Essar Steel India Ltd. [2019] ibclaw.in 07 SC.

The period of CIRP cannot be extended on the flimsy grounds much beyond the period of 330 days – Dr. Palani G Periasamy Vs. CA M. Suresh Kumar Liquidator, Dharani Sugars and Chemicals Ltd. & Anr. – NCLAT Chennai Read Post »

GST Input Tax Credit (ITC) available to the earlier management will not be available to the current management – M/s ESL Steel Ltd. Vs. Principal Commissioner, Central Goods & Services Tax & Central Excise – Jharkhand High Court

/ 22 minutes of reading

In this landmark decision, Hon’ble Division Bench of the High Court of Jharkhand held that on the one hand; the Additional Commissioner has illegally and arbitrarily confirmed the demand of Rs.6,02,34,616/- u/s 74(9) of the Central Goods and Service Tax Act, 2017 and imposed interest and penalty, on the ground of irregular availment of transitional credit during the period 2017-18, which includes the transitional credit of Rs.5,10,21,204/- claimed by the Corporate Debtor for the period prior to 17.04.2018 and balance amount of Rs.92,13,412/- has been claimed by the Corporate Debtor as Transitional credit by filing new TRAN-1; but at the same time the Corporate Debtor can also not take advantage of the ITC of the earlier period i.e., any dues prior to 17.04.2018; the date on which the NCLT has approved the resolution plan of the Corporate Debtor.

GST Input Tax Credit (ITC) available to the earlier management will not be available to the current management – M/s ESL Steel Ltd. Vs. Principal Commissioner, Central Goods & Services Tax & Central Excise – Jharkhand High Court Read Post »

An amendment of IBC Section 7 application cannot be allowed at a belated stage if the proposed amendment totally changes the cause of action and the whole case – Comfort Fincap Ltd. Vs. Seven Indian Heads Infrabuild Pvt. Ltd. – NCLT Mumbai Bench

/ 4 minutes of reading

The Adjudicating Authority held that:
(i) The Financial Creditor is making an attempt to shift the date of default by introducing new documents with new theories and stories that too after pointing out by the Corporate Debtor that the date of default mentioned in the original petition is hit by Section 10A which is not legally permissible.
(ii) Section 7 of IBC prescribes mere filing of an application in a form prescribed under the Rules and the question of filing lengthy pleadings does not arise unlike a suit filed under the Code of Civil Procedure.
(iii) Rule 11 of NCLT is a mere enabling provision empowering the NCLT to pass any order to prevent the misuse and the abuse of the process of the Code and such an enabling provision cannot be used for filing application of this nature.

An amendment of IBC Section 7 application cannot be allowed at a belated stage if the proposed amendment totally changes the cause of action and the whole case – Comfort Fincap Ltd. Vs. Seven Indian Heads Infrabuild Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Interim stay on demand of any dues against Atlas Cycles (Haryana) Ltd., institution and continuation of suits or other legal proceedings by any creditor or any statutory or other authority – Atlas Cycles (Haryana) Ltd. Vs. Vikram Kapur and Ors. – NCLT Principal Bench

/ 1 minute of reading

There shall be an order of interim stay on demand of all and any dues against Atlas Cycles (Haryana) Ltd., institution and continuation of suits or other legal proceedings by any creditor of the Applicant or any statutory or other authority including any public utility provider including proceedings under IBC or the MSME Act or any other Act or Regulation against the Applicant Company in any Court of Law, Tribunal, Authority, Arbitration Panel or Arbitration Authority for a period of 6 months from the date of order; No coercive action shall be taken by any statutory authority, public utility provider, stock exchange or revenue authority till 6 months from the date of this order.

Interim stay on demand of any dues against Atlas Cycles (Haryana) Ltd., institution and continuation of suits or other legal proceedings by any creditor or any statutory or other authority – Atlas Cycles (Haryana) Ltd. Vs. Vikram Kapur and Ors. – NCLT Principal Bench Read Post »

The primary and operative requirement of Section 5(21) of IBC, ‘Operational Debt’ is that the claim must bear some nexus with a provision of goods or services irrespective of who is to be the supplier or receiver – Manoj Stone Infra Pvt. Ltd. Vs. Railsys Engineers Pvt. Ltd. – NCLAT New Delhi

/ 16 minutes of reading

NCLAT held that from a plain reading of the Section 5(20) and Section 5(21), it is clear that the primary and operative requirement of Section 5(21) is that the claim must bear some nexus with a provision of goods or services irrespective of who is to be the supplier or receiver. Further the Application to Adjudicating Authority Rules, 2016 under Rule 5(1) provides that any operational creditor can issue a notice in relation to an operational debt either through a demand notice or copy of invoices. Also, an operational creditor who is seeking to claim an operational debt in a CIRP can rely either on a contract or on an invoice for the supply of goods and services with the corporate debtor under Regulation 7(2)(b)(i) and (ii) of the CIRP Regulations 2016. Thus, all forms of contracts for the supply of goods or services between the operational creditor and the corporate debtor are included in this.

The primary and operative requirement of Section 5(21) of IBC, ‘Operational Debt’ is that the claim must bear some nexus with a provision of goods or services irrespective of who is to be the supplier or receiver – Manoj Stone Infra Pvt. Ltd. Vs. Railsys Engineers Pvt. Ltd. – NCLAT New Delhi Read Post »

NCLT rejects CIRP application filed u/s 7 of IBC against Religare Enterprises since the Corporate Debtor is registered under Reserve Bank of India, Act, 1934 as NBFC – Ligare Aviation Ltd. Vs. Religare Enterprises Ltd. – NCLT Principal Bench

/ 2 minutes of reading

The Adjudicating Authority held that the Reserve Bank of India by exercising its power under Section 45 IA of the Reserve Bank of India Act, 1934 has granted a certificate to the Corporate Debtor Company to carry on business of non-banking financial institution subject to the condition given on the reverse. Sec 3(8) defines a “Corporate Debtor” as meaning a corporate person who owes a debt to any person. Section 7 speaks of initiation of CIRP against a corporate debtor by a financial creditor. Reading the provisions together, it is clear that a section 7 petition may be initiated against any corporate debtor who is a corporate person within the meaning of Section 3(7) of the Code and the financial service provider is excluded from the definition of the Corporate Person, thus the corporate debtor herein is not covered within the definition of Section 3(7) of the Code, since it is admittedly NBFC.

NCLT rejects CIRP application filed u/s 7 of IBC against Religare Enterprises since the Corporate Debtor is registered under Reserve Bank of India, Act, 1934 as NBFC – Ligare Aviation Ltd. Vs. Religare Enterprises Ltd. – NCLT Principal Bench Read Post »

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