13/12/2022

A bare perusal of Sections 17, 18, 19(19), 31 and 34 of Recovery of Debts & Bankruptcy Act, 1993 shows that the DRT is having exclusive jurisdiction to deal with the recovery of the secured creditors and is having an overriding effect over all other laws – The Specified Undertaking of The Unit Trust of India Vs. M/s Derby Textiles Ltd. – Rajasthan High Court

Hon’ble High Court referred various judgments of Apex Court and held that the Recovery Officer is not required to take any prior permission of the Company Court before disbursing the amount except the rider provided under Section 19 (19) of the Act of 1993 and Sections 529 and 529A of the Companies Act, 1956.

A bare perusal of Sections 17, 18, 19(19), 31 and 34 of Recovery of Debts & Bankruptcy Act, 1993 shows that the DRT is having exclusive jurisdiction to deal with the recovery of the secured creditors and is having an overriding effect over all other laws – The Specified Undertaking of The Unit Trust of India Vs. M/s Derby Textiles Ltd. – Rajasthan High Court Read Post »

In case of assignment of debt during CIRP application pending before NCLT, there is no prohibition in the IBC from continuing the proceeding by an assignee – Siti Networks Ltd. Vs. Assets Care and Reconstruction Enterprises Ltd. & Anr. – NCLAT New Delhi

In this case, HDFC Limited filed CP under Section 7 of the IBC seeking initiation of CIRP against the Corporate Debtor. HDFC Ltd. assigned the debt to the Assets Care and Reconstruction Enterprise Ltd. Assets Care and Reconstruction Enterprise Limited filed an I.A. seeking to be substituted as Financial Creditor in place of original Applicant and to be permitted to pursue the C.P. filed by the HDFC Limited. Learned Counsel for the Appellant submits that the assignee could not have been permitted to continue Section 7 proceedings although it is open for the assignee to file a fresh Application under Section 7 which was permissible on the strength of assignment.
NCLAT held that the order of the Bengaluru Bench NCLT dated 26.08.2019 on which reliance has been placed by the Appellant cannot be said to be laying down a correct law to be followed as a precedent. As has been observed rightly by the Adjudicating Authority, there is no prohibition in the IBC or any of the Regulations from continuing the proceeding by an assignee. Section 5(7) of the IBC which defines Financial Creditor also includes a person to whom such debt has been legally assigned or transferred to.

In case of assignment of debt during CIRP application pending before NCLT, there is no prohibition in the IBC from continuing the proceeding by an assignee – Siti Networks Ltd. Vs. Assets Care and Reconstruction Enterprises Ltd. & Anr. – NCLAT New Delhi Read Post »

A Corporate Debtor is entitled in law to advance a plea that the default had not taken place and that debt including a disputed sum is not due – Mr. V Venkata Satyanarayana Vs. M/s Pattabi Enterprise – NCLAT Chennai

NCLAT held that under the Insolvency & Bankruptcy Code, 2016, the aspect of existence of Default, takes a prime seat, and the reason supposed to be projected by the concerned Party viz., inability to pay, is of no avail. In a given case, if a Debt is Disputed, yet, if the amount is more than Rs.1,00,000/-, now Rs.1,00,00,000/- the same is maintainable in Law. No wonder, an Adjudicating Authority, (Tribunal), is not empowered to decide the Default Sum. A Corporate Debtor, is entitled in Law to advance a Plea, that the Default had not taken place and that Debt, including a Disputed Sum, is not Due. A Debt may not be Due, if it is not payable in Law or Fact. A mere pendency of a Civil Suit or a Criminal Case, under Section 138 of the Negotiable Instrument Act, will not preclude an Applicant, to seek an appropriate remedy, under the Insolvency & Bankruptcy Code, 2016, if he so desires / advised.

A Corporate Debtor is entitled in law to advance a plea that the default had not taken place and that debt including a disputed sum is not due – Mr. V Venkata Satyanarayana Vs. M/s Pattabi Enterprise – NCLAT Chennai Read Post »

Distribution of the amount to the Financial Creditors as per the decision of the CoC cannot be permitted to be challenged – Andhra Pradesh State Financial Corporation Vs. Kalptaru Steel Rolling Mills Ltd. – NCLAT New Delhi

NCLAT held that learned counsel for the Resolution Professional has rightly placed reliance on the judgment of Hon’ble Supreme Court in “India Resurgence ARC Pvt. Ltd. vs. Amit Metaliks Ltd. & Anr. (2021) ibclaw.in 87 SC, where the Hon’ble Supreme Court has held that distribution of the amount to the Financial Creditors as per the decision of the CoC cannot be permitted to be challenged.

Distribution of the amount to the Financial Creditors as per the decision of the CoC cannot be permitted to be challenged – Andhra Pradesh State Financial Corporation Vs. Kalptaru Steel Rolling Mills Ltd. – NCLAT New Delhi Read Post »

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