14/07/2023

In case prior proceedings before DRT under SARFAESI Act, 2002 have not ended and are still ongoing, the principle of Section 14 of the Limitation Act will not apply to application under Section 7 of IBC – State Bank of India Vs. Salasar Ispat Ltd. – NCLT Kolkata Bench

In this important judgment, the NCLT Kolkata Bench analyses the conditions need to be fulfilled for the applicability of Section 14 of Limitation Act, 1963.

In case prior proceedings before DRT under SARFAESI Act, 2002 have not ended and are still ongoing, the principle of Section 14 of the Limitation Act will not apply to application under Section 7 of IBC – State Bank of India Vs. Salasar Ispat Ltd. – NCLT Kolkata Bench Read Post »

If Transferor Company is wholly owned subsidiary of Transferee Company & there is no reorganization of share capital of Transferee Company & Creditors & Shareholders of Transferee Company are not affected by the implementation of the Scheme, the requirement for holding meetings of the Shareholders, Secured & Unsecured Creditors may be dispensed with – Reliance Industries Ltd. Vs. Registrar of Companies – NCLAT New Delhi

NCLAT held that:
(i) In Section 232(1) of the Companies Act it is left to the discretion of the Tribunal, as the word used is “may”, regarding the holding of meeting of the creditors or class of creditors or members or class of members in the manner directed by the Tribunal.
(ii) If the Transferor Company is wholly owned subsidiary of the Transferee Company and there is no reorganization of the share capital of Transferee Company and the creditors and shareholders of the Transferee Company are not affected by the implementation of the Scheme as the assets of the Transferee Company and the Transferor Company far exceed their liabilities, the requirement for holding meetings of the shareholders, secured and unsecured may be dispensed with.

If Transferor Company is wholly owned subsidiary of Transferee Company & there is no reorganization of share capital of Transferee Company & Creditors & Shareholders of Transferee Company are not affected by the implementation of the Scheme, the requirement for holding meetings of the Shareholders, Secured & Unsecured Creditors may be dispensed with – Reliance Industries Ltd. Vs. Registrar of Companies – NCLAT New Delhi Read Post »

The allegation of violation of Section 295 of the Companies Act, 1956 (Section 185 of the Companies Act, 2013), Loan to directors, does not in any manner inhibit filing of application u/s 7 of IBC application and take appropriate proceedings under the IBC – Kalpesh Ramniklal Shah Vs. Mundara Estate Developers Ltd. – NCLAT New Delhi

The NCLAT held that the submission of the Suspended Director/Appellant that loan transaction was in violation of Section 295 of the Companies Act, 1956(Section 185 of the Companies Act, 2013), does not help the Appellant to deny the loan transaction and the disbursement of the amount. Even if, the allegation of violation of Section 295 of the Companies Act, 1956 may be there, that does not in any manner inhibit filing of Section 7 Application and take appropriate proceedings under the IBC. The purpose and object of the IBC is entirely different. The violation of provisions of Companies Act, 1956, for example Section 295 has different consequences, which consequences in law can take effect and remedial measures can be taken under Section 295, when the ingredients of Section 295 are proved, but that itself cannot be a ground to reject Section 7 Application filed by the Financial Creditor, where debt and default is proved.

The allegation of violation of Section 295 of the Companies Act, 1956 (Section 185 of the Companies Act, 2013), Loan to directors, does not in any manner inhibit filing of application u/s 7 of IBC application and take appropriate proceedings under the IBC – Kalpesh Ramniklal Shah Vs. Mundara Estate Developers Ltd. – NCLAT New Delhi Read Post »

Whether in appeal filed u/s 61 of IBC, by a third party who was not party to the proceedings before Adjudicating Authority, an application seeking leave to prefer the appeal is necessary to be filed and decided before entertaining the Appeal? – Trimex Industries Pvt. Ltd. Vs. Bhuvan Madan, RP of Sathavahana Ispat Ltd. & Anr. – NCLAT New Delhi

NCLAT held that on examination of Section 61 of IBC it is evident that any person aggrieved by the order of the Adjudicating Authority may prefer an appeal before this Tribunal whether he was party before the Adjudicating Authority or not. It is settled principle of law that if a Statute states to do a thing in a particular manner then it is to be done in the same manner not in any other way. Once the act is unambiguous on the point of enabling any person aggrieved by the order of the Adjudicating Authority to prefer an appeal, there may not be any reason to ask such person to file an application seeking leave to file appeal.
Further, held that considering the law laid down by Hon’ble Supreme Court as we have discussed hereinabove as well as language of Section 61 of the IBC and also non-availability of any other rules or regulations regarding seeking leave to file an appeal, we are of the considered opinion that the law laid down by the Division Bench by its order dated 24.05.2023 in the present appeal is correct law.

Whether in appeal filed u/s 61 of IBC, by a third party who was not party to the proceedings before Adjudicating Authority, an application seeking leave to prefer the appeal is necessary to be filed and decided before entertaining the Appeal? – Trimex Industries Pvt. Ltd. Vs. Bhuvan Madan, RP of Sathavahana Ispat Ltd. & Anr. – NCLAT New Delhi Read Post »

Payment made after expiry of original period of 3 years from the date of last invoice cannot be considered an acknowledgment for extension of limitation period – SSP Pvt. Ltd. Vs. Govind Jee Dairy Milk Pvt. Ltd. – NCLAT New Delhi

This Appeal has been filed against the Order passed by the Adjudicating Authority rejecting Section 9 Application filed by the Appellant as barred by time. The Adjudicating Authority in the Order has noted invoice and part payments received from Corporate Debtor. The last part payment which was received on 29.03.2014 and thereafter on 14.02.2018 that is beyond three years hence it was held to be barred by time.

NCLAT held that Adjudicating Authority did not commit any error in dismissing the Application as barred by time since the payment made on 14.02.2018 was on expiry of three years from the last payment. We thus do not find any error in rejecting Section 9 Application however it shall be open for the Appellant to take such remedy as available in law with regard to their claim in accordance with law.

Payment made after expiry of original period of 3 years from the date of last invoice cannot be considered an acknowledgment for extension of limitation period – SSP Pvt. Ltd. Vs. Govind Jee Dairy Milk Pvt. Ltd. – NCLAT New Delhi Read Post »

Neil Industries Ltd. Vs. Jawan Mining and Construction Equipments Pvt. Ltd. – NCLAT New Delhi

NCLAT held that Section 5(8) of the IBC which is relevant for the present case defines financial debt to mean a debt along with interest which is disbursed against the consideration for the time value of money. Further, clauses (a) to (i) of Section 5(8) delineates the nature of transactions which are included in the definition of financial debt which includes money borrowed against payment of interest. In the facts of the present case, the Appellant has issued a demand notice which contained cumulative demand of all the three loan amounts. In the given factual matrix, the Adjudicating Authority is required to notice as to whether the application is complete or not and if there is a debt and the Corporate Debtor has defaulted in the payment, whether the amount so defaulted is more than the threshold limit of Rs. 1 lakh.

Neil Industries Ltd. Vs. Jawan Mining and Construction Equipments Pvt. Ltd. – NCLAT New Delhi Read Post »

Whether the Resolution Professional is entitled to receive the performance linked incentive fee on timely resolution and value maximization | What is the nature of power and jurisdiction of the CoC to grant performance linked incentive fee (CIRP Regulation 34B) – Ravindra Kumar Goyal Vs. Committee of Creditors of Yashasvi Yarns Ltd. – NCLAT New Delhi

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Whether the Resolution Professional is entitled to receive the performance linked incentive fee on timely resolution and value maximization | What is the nature of power and jurisdiction of the CoC to grant performance linked incentive fee (CIRP Regulation 34B) – Ravindra Kumar Goyal Vs. Committee of Creditors of Yashasvi Yarns Ltd. – NCLAT New Delhi Read Post »

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