11/08/2023

If Corporate Debtor has not deposited GST charged from the customers and Input Tax Credit (ITC) u/s 16 of CGST Act, 2017 claimed by customers has been reversed by GST Department, the customers are required to file their claim during CIRP on time | No claim can be admitted after Resolution Plan approved by CoC – Abnco Vie Win Ent Pvt. Ltd. Vs. Steamline Industries Ltd. – NCLT Mumbai Bench

In this case, Corporate Debtor has not deposited GST to government, GST department reversed ITC was taken by customers. The customer does not file claim before approval of resolution plan by CoC.
NCLT Mumbai Bench held that:
(i) The purpose of issuing public notice is to make all the interested parties/stakeholders aware of the initiation of the CIRP of the Corporate Debtor and the information memorandum which is issued subsequently, after the collection and collation of claims of the Operational and Financial Creditors to provide the Resolution Applicant so that a legally and financially sound Resolution Plan for the Corporate Debtor is received.
(ii) The Resolution Plan has been approved by the CoC as on 04.12.2019 and also has been submitted to this Tribunal for necessary approval on 20.12.2019 under Section 30 of the Code. Any interruption in the CIRP process at this stage by including the delayed claim would amount to setting the clock back. It would be complete disruption of the CIRP and the timelines stipulated therein.
(iii) IA rejected.

If Corporate Debtor has not deposited GST charged from the customers and Input Tax Credit (ITC) u/s 16 of CGST Act, 2017 claimed by customers has been reversed by GST Department, the customers are required to file their claim during CIRP on time | No claim can be admitted after Resolution Plan approved by CoC – Abnco Vie Win Ent Pvt. Ltd. Vs. Steamline Industries Ltd. – NCLT Mumbai Bench Read Post »

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench

In this case, IA was filed by RP for recovery of due to the Corporate Debtor.
NCLT Jaipur Bench held that:
(i) The duties imposed upon the RP/IRP does not entitle the Adjudicating Authority to exercise jurisdiction in matters where recovery of a particular amount is sought on behalf of the Corporate Debtor. For adjudication of disputes and recovery of sums the RP is empowered to approach relevant competent authorities.
(ii) The Resolution Professional in the present matter had approached this forum for recovery of debt which is allegedly owed by the Respondent No. 2 to the Corporate Debtor whereas it has forgotten the underlying principle which enunciates that this is not a debt recovery forum.
(iii) There is no doubt that the Resolution Professional has ample powers to proceed and protect the debts of the Corporate Debtor, but it cannot do so by merely filing an Application under Section 60(5) of the Code in the pending CIRP of the Corporate Debtor.
(iv) The Adjudicating Authority does not have the jurisdiction to allow the Application filed by the Resolution Professional.

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench Read Post »

All about ‘Not Readily Realisable Assets(NRRA)’, valuation of PUFE Assets, who can pursue avoidance applications after assignment of NRRA, jurisdiction of NCLT after transfer of NRRA, When can NRRA be transferred to third party under Regulation 37A of Liquidation Regulations, 2017 – Inquest Fintech Pvt. Ltd. Vs. Ms. Maya Gupta Liquidator Rain Automotive India Pvt. Ltd. – NCLT New Delhi Bench Court-II

In this important judgment, NCLT New Delhi Bench Court-II comprising of Shri Ashok Kumar Bhardwaj and Shri L.N. Gupta has clarified various issues on transfer/assignment of ‘Not Readily Realisable Assets(NRRA)’ during the liquidation process under IBC such as:
(i) Valuation of “Not readily realisable assets” (NRRA) underlying the pending PUFE Applications are contingent assets
(ii) Who can pursue avoidance /PUFE Applications after the assignment of NRRA?
(iii) Objective of avoidance/ PUFE applications filed u/s 43, 45, 50, and 66 of IBC 2016
(iv) Whether Adjudicating Authority has jurisdiction to adjudicate the Avoidance/ PUFE Applications pursued by a Third Party or an Assignee when even the proceedings under Sections 43, 45, 50, and 66 are not concluded?
(v) When NRRA can be assigned/transferred to third party u/r 37A of the Liquidation Regulations?

All about ‘Not Readily Realisable Assets(NRRA)’, valuation of PUFE Assets, who can pursue avoidance applications after assignment of NRRA, jurisdiction of NCLT after transfer of NRRA, When can NRRA be transferred to third party under Regulation 37A of Liquidation Regulations, 2017 – Inquest Fintech Pvt. Ltd. Vs. Ms. Maya Gupta Liquidator Rain Automotive India Pvt. Ltd. – NCLT New Delhi Bench Court-II Read Post »

There is no concept of dissenting homebuyers within Creditors in class – Mrs. Taruna Suhas Saraph Vs. Mr. Dyaneshwar Chaudhari (Suspended Director) – NCLT Mumbai Bench

NCLT Mumbai Bench held that Home Buyers can vote for or against the Plan only as a class and if there are some Home Buyers pitted against the Resolution Plan, who are otherwise in minority, they have absolutely no locus to oppose the Plan in the capacity of dissatisfied or dissenting Home Buyers. It is also abundantly clear that such dissenting minority segment within the class of Home Buyers cannot arrogate themselves to be dissenting Financial Creditors.

There is no concept of dissenting homebuyers within Creditors in class – Mrs. Taruna Suhas Saraph Vs. Mr. Dyaneshwar Chaudhari (Suspended Director) – NCLT Mumbai Bench Read Post »

Once the majority of CoC decide on one of Resolution Plan, the decision of the CoC attains finality, Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC – G. S. Constructions Vs. Mr. Gajesh Labhchand Jain – NCLT Mumbai Bench

NCLT Mumbai Bench held that:
(i) Once the majority of CoC decide on one of the Resolution Plan, the decision of the CoC attains finality.
(ii) Since the CoC comprising of SIDBI and the home buyers approved the Resolution Plan presented by Mrs. Asha Sanap, the Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC.
(iii) The Applicant who himself was Prospective Resolution Applicant had submitted its Resolution Plan. At no stage, the Applicant challenged the constitution of the CoC. The Applicant is seeking relief to set aside and quash the CoC only after his plan not approved with the requisite voting of the CoC.

Once the majority of CoC decide on one of Resolution Plan, the decision of the CoC attains finality, Unsuccessful Resolution Applicant has no locus to challenge the commercial decision of the CoC – G. S. Constructions Vs. Mr. Gajesh Labhchand Jain – NCLT Mumbai Bench Read Post »

A Resolution Plan cannot be rejected by Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim – Mr. Vidyadhar Vasant Pawanaskar Vs. Mr. Ganesh L. Jain & Anr. – NCLT Mumbai Bench

An application is filed by the employees of the Corporate Debtor under Section 60(5) of IBC, 2016 r/w Rule 11 of NCLT, 2016 seeking stay to the Resolution Plan and to reconstitute the CoC.
NCLT Mumbai Bench held that:
(i) The IA filed by the Applicant has no merit and the same liable to be dismissed as the Applicant in the instant Application have no locus to challenge the constitution of CoC.
(ii) The Resolution Plan cannot be rejected by the Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim so long as it does not contravene the provisions of Section 30 (2) (b) of the Code, which is not the case in the instant IA.

A Resolution Plan cannot be rejected by Adjudicating Authority simply on the objection of an Operational Creditors being Employees that they are being paid a meagre amount against his admitted claim – Mr. Vidyadhar Vasant Pawanaskar Vs. Mr. Ganesh L. Jain & Anr. – NCLT Mumbai Bench Read Post »

No Constitutional Court can issue a writ of mandamus to a legislature to enact a law on a particular subject in a particular manner – Union of India & Ors. Vs. K. Pushpavanam & Ors. – Supreme Court

In this case, Hon’ble Supreme Court held that:
(i) A writ court cannot direct the Government to consider introducing a particular bill before the House of Legislature within a time frame.
(ii) There is no right vested in the applicant to claim that the Law Commission set up by the Central Government should be given constitutional or statutory status.
(iii) Whether a nodal officer, who is well qualified in law, in each department, to note down the Courts’ recommendations to bring to the knowledge of the Policy¬-Makers of each department by way of periodical reports should be appointed or not, is a matter to be decided by the Central Government.
(iv) The law regarding power of the writ court to issue a mandate to the legislature to legislate is well settled. No Constitutional Court can issue a writ of mandamus to a legislature to enact a law on a particular subject in a particular manner. The Court may, at the highest, record its opinion or recommendation on the necessity of either amending the existing law or coming out with a new law.

No Constitutional Court can issue a writ of mandamus to a legislature to enact a law on a particular subject in a particular manner – Union of India & Ors. Vs. K. Pushpavanam & Ors. – Supreme Court Read Post »

Bank cannot initiate CIRP against Builder on default by Home Buyer being a Borrower – South Indian Bank Ltd. Vs. Magic Info Solutions Pvt. Ltd. – NCLT New Delhi Bench Court-III

NCLT New Delhi Bench Court-III held that the debt in question may be considered as a debt defined under Section 3(11) of the Code and cannot be called as a Financial Debt. Learned Counsel for the Corporate Debtor has relied on a judgment in the case of Anuj Jain Interim Resolution Professional for Jaypee Infratech Limited versus Axis Bank Limited [2020] ibclaw.in 06 SC wherein the Hon’ble Supreme Court of India distinguished a financial debt from other type of debts and has held that only institutions directly disbursing loan against consideration of time value of money is entitled and has the locus standi to prefer a petition for invoking the CIRP as such financial institution will invariably be interested in resurrection of such Corporate Debtor as against any other financial institution not having any financial debt, who shall only be interested in recovery of its dues. We have come to view that the principal creditors in the present case are Mr. Amit Tyagi and Mrs. Priyanka Tyagi (Home Buyer/Principal Borrower) to whom the Financial Debt is owned and not the Corporate Debtor, M/s. Magic Info Solution Pvt Ltd.

Bank cannot initiate CIRP against Builder on default by Home Buyer being a Borrower – South Indian Bank Ltd. Vs. Magic Info Solutions Pvt. Ltd. – NCLT New Delhi Bench Court-III Read Post »

Forensic Report cannot be relied upon solely to prove the case under Section 66 of the IBC – Mr. Anuj Bajpai, RP of Tollways (Ujjain) Pvt. Ltd. Vs. Surendra Lodha – NCLT Mumbai Bench

NCLT Mumbai Bench held that RP has placed no proof on record to satisfy the ingredients of Section 66. Further, the Resolution Professional solely relies upon the forensic report to substantiate alleged fraud wherein, the transaction auditor’s itself states that the report should not be considered a definitive pronouncement on the individual or the company. From, the veracity of the report is not even affirmed by the auditor itself. Therefore, such a report cannot be relied upon solely to prove the case under section 66 of the code. Moreover, no case has been made against the Respondent no.1/ Suspended Director as all the challenged transactions took place between the Corporate Debtor and Respondent no.2.

Forensic Report cannot be relied upon solely to prove the case under Section 66 of the IBC – Mr. Anuj Bajpai, RP of Tollways (Ujjain) Pvt. Ltd. Vs. Surendra Lodha – NCLT Mumbai Bench Read Post »

Whether Operational Debt includes penalty or liquidated damages – Mr. Satish Chinnadurai Director of DB Group India Pvt. Ltd. Vs. Mr. Ravindra Hirasingh Rawat – NCLAT New Delhi

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Whether Operational Debt includes penalty or liquidated damages – Mr. Satish Chinnadurai Director of DB Group India Pvt. Ltd. Vs. Mr. Ravindra Hirasingh Rawat – NCLAT New Delhi Read Post »

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