12/08/2022

Bank can upgrade the asset classification of a Corporate Debtor account from NPA to Standard after the change in ownership is implemented even in case of MSME Enterprise wherein the existing management is allowed to revive the Company by giving a Resolution Plan – Ramesh D. Shah, Successful Resolution Applicant of Etco Industries Pvt. Ltd. Vs. Vijay Pitamber Lulla, Chairman of Steering Committee – NCLT Mumbai Bench

The NCLT Bench is of the view that as per the Master Circular of RBI (RBI/2021-2022/104DOR.No.STR.REC.55/21.04.048/2021-22) dated 01.10.2021, the account can be upgraded as standard after the change in ownership is implemented. But this is a case of an MSME Enterprise, wherein the directors/promoters are permitted to give a Resolution Plan for the revival of the
Corporate Debtor or in other words the existing management is allowed to revive the Company by giving a Resolution Plan. The objective of this is to provide a clean start to the unit/Corporate Debtor. Therefore, once the resolution plan is approved by the Adjudicating Authority, the management/ownership of the Corporate Debtor shall be considered as fresh, even if the directors/promoters of the Corporate Debtor (MSME) remain the same.

Bank can upgrade the asset classification of a Corporate Debtor account from NPA to Standard after the change in ownership is implemented even in case of MSME Enterprise wherein the existing management is allowed to revive the Company by giving a Resolution Plan – Ramesh D. Shah, Successful Resolution Applicant of Etco Industries Pvt. Ltd. Vs. Vijay Pitamber Lulla, Chairman of Steering Committee – NCLT Mumbai Bench Read Post »

It is not the object of the IBC that CIRP should be initiated to penalize solvent companies for non-payment of disputed dues claimed by an Operational Creditor – M/s Shree Satya Industries Vs. M/s Windsor Machines Ltd. – NCLT Mumbai Bench

The Hon’ble Supreme Court recently in M/s. S. S. Engineers V/s Hindustan Petroleum Corporation Ltd. (2022) ibclaw.in 92 SC held that if the debt is disputed, the application of the Operational Creditor for initiation of CIRP must be dismissed – It is not the object of the IBC that CIRP should be initiated to penalize solvent companies for non-payment of disputed dues claimed by an Operational Creditor. Applying the above principles laid down by the Hon’ble Supreme Court in the above judgement to the present case on hand, this bench is of the considered opinion that there are no merits in the above Application and the above Application is liable to be rejected on both the grounds of “maintainability” and “pre-existing disputes” between the parties. Accordingly, the above Company Petition is dismissed.

It is not the object of the IBC that CIRP should be initiated to penalize solvent companies for non-payment of disputed dues claimed by an Operational Creditor – M/s Shree Satya Industries Vs. M/s Windsor Machines Ltd. – NCLT Mumbai Bench Read Post »

When Appeal is filed in defects and defects are not cured within 7 days and the defects are cured after 7 days and the Appeal is refiled, Whether the refiling shall be a fresh filing of the Appeal – Mr. V R Ashok Rao Vs. TDT Copper Ltd. – NCLAT New Delhi

NCLAT in this case referred the following issues to larger bench:
(a) Whether the law laid down by this Tribunal in “Mr. Jitendra Virmani Vs. MRO-TEK Realty Ltd. & Ors” and three Member Bench Judgement in “Arul Muthu Kumaara Samy Vs. Registrar of Companies” that when the defect in Appeal is cured and the Appeal is refiled before the Appellate Tribunal beyond seven days, the date of re-presentation of the Appeal shall be treated as a fresh Appeal, lays down correct law?
(b) Whether the limitation prescribed for filing an Appeal before this Appellate Tribunal under Section 61 of Insolvency and Bankruptcy Code, 2016 or Section 421 of the Companies Act, 2013 shall also govern the period under which a defect in the Appeal is to be cured and this Appellate Tribunal shall have no jurisdiction to condone the delay in refiling/representation if it is beyond the limitation prescribed in Section 61 of the IBC or Section 421 of the Companies Act, 2013.

When Appeal is filed in defects and defects are not cured within 7 days and the defects are cured after 7 days and the Appeal is refiled, Whether the refiling shall be a fresh filing of the Appeal – Mr. V R Ashok Rao Vs. TDT Copper Ltd. – NCLAT New Delhi Read Post »

There is no provision in the Code, 2016, that enables the Creditors other than those who triggered the Insolvency Resolution Process, to be impleaded as Parties – Mr. Chinna Rao Vs. V. Venkatasivakumar Erstwhile Liquidator of M/s. The Jeypore Sugar Co. Ltd. – NCLAT Chennai

NCLAT held that it must be borne in mind that there is no provision in the Code, 2016, that enables the Creditors other than those who triggered the Insolvency Resolution Process, to be impleaded as Parties. In law, the Impleadment of Parties, is ultimately, within the ambit of exercise of discretion by a Tribunal/Authority, as the case may be. More importantly, no person, can be added, unless he is a necessary party. A necessary party means that a person is very much necessary to the Constitution of Suit/an Appeal in a given Proceeding before a Court of Law/Tribunal/Authority.

There is no provision in the Code, 2016, that enables the Creditors other than those who triggered the Insolvency Resolution Process, to be impleaded as Parties – Mr. Chinna Rao Vs. V. Venkatasivakumar Erstwhile Liquidator of M/s. The Jeypore Sugar Co. Ltd. – NCLAT Chennai Read Post »

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