14/11/2024

Can insolvency petition be filed against Carrier/Liner on loss accrued to Operational Creditor as a consequence of the wrongful delivery/ the liability arises out of breach of contract or tort? – Toram Exports Pvt. Ltd. Vs. CMA CGM Agencies (India) Pvt. Ltd. – NCLT Chennai Bench

/ 6 minutes of reading

Hon’ble NCLT Chennai Bench held that in the instant case, the Applicant has alleged that the liability arises out of tort committed by the carrier yet holds the Corporate Debtor liable for signing the Bill of Lading in the capacity of the agent of the Principal Company under contract law. At this stage, the issue is whether the Operational Creditor is entitled to a claim, if any, as a result of ‘breach of contract’ or ‘tort’. Further, even if the Applicant is entitled to any claim against the Principal Company, the liability of the Corporate Debtor as an agent of the Principal Company, has to be examined. These issues amount to civil dispute. This Tribunal, having only summary jurisdiction cannot decide the nature of the liability of the Principal Company, if any, that arises as a result of the alleged wrongful delivery of cargo container.

Can insolvency petition be filed against Carrier/Liner on loss accrued to Operational Creditor as a consequence of the wrongful delivery/ the liability arises out of breach of contract or tort? – Toram Exports Pvt. Ltd. Vs. CMA CGM Agencies (India) Pvt. Ltd. – NCLT Chennai Bench Read Post »

Declaring Non-Executive Woman Director of a Company as willful defaulter without issuing separate notice, the High Court quashes – Manjula Bhatia Vs. Bank of Baroda and Ors. – Bombay High Court

/ 11 minutes of reading

Respondent No.1 issued the impugned order dated 16 July 2018, declaring the Petitioner a willful defaulter without issuing any notice. The impugned letter is almost non-speaking and does not consider the circumstance that no notice was issued to the Petitioner. Thus, this is a case of failure of natural justice. There is no finding that the circumstances spoken of in clause 3(d) of the master circular were fulfilled in the case of the petitioner, who was admittedly a non-whole-time woman director. These are sufficient grounds to quash the impugned letter dated 16.07.2018.

Declaring Non-Executive Woman Director of a Company as willful defaulter without issuing separate notice, the High Court quashes – Manjula Bhatia Vs. Bank of Baroda and Ors. – Bombay High Court Read Post »

The threshold limit for invoking the provisions of Section 95 of the IBC, 2016, with respect to the Personal Guarantor to a Corporate Debtor, would be Rs. One Crore only – Mudraksh Investfin Pvt. Ltd. Through RP Vs. Gursev Singh – NCLT New Delhi Bench

/ 5 minutes of reading

Hon’ble NCLT New Delhi Bench held that a conjoint reading of Rule 3(1)(a) of Application to Adjudication Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors Rules, 2019, Section 4 and Section 60(1) of the Code reveals that the threshold limit for invoking the provisions of Section 95 of IBC, 2016 qua the Personal Guarantor to Corporate Debtor would be Rs. One Crore only. It goes without saying that where the amount defaulted to be paid by the Corporate Debtor and Personal Guarantor is less than Rs. 1 Crore, proceedings before this Adjudicating Authority for the purpose of Section 7, 9, 10, 94 & 95 of Code cannot be maintained.

The threshold limit for invoking the provisions of Section 95 of the IBC, 2016, with respect to the Personal Guarantor to a Corporate Debtor, would be Rs. One Crore only – Mudraksh Investfin Pvt. Ltd. Through RP Vs. Gursev Singh – NCLT New Delhi Bench Read Post »

The word ‘winding up’ mentioned in the Companies Act, 2013 is synonymous with the word ‘liquidation’, as mentioned in the Insolvency and Bankruptcy Code, 2016 – CS Anagha Anasingaraju, Liquidator for Pandit Automotive Pvt. Ltd. Vs. Bank of Baroda (Earlier Vijaya Bank) and Ors. – NCLT Mumbai Bench

/ 6 minutes of reading

Hon’ble NCLT Mumbai Bench held that the argument raised by the Counsel for the Respondents that the provisions of Section 529A of the Companies Act, 1956 or Section 326 of the Companies Act, 2013 are applicable to winding up proceedings only and not to liquidation cannot be sustained in the eyes of law and, is therefore, hereby repelled.

The word ‘winding up’ mentioned in the Companies Act, 2013 is synonymous with the word ‘liquidation’, as mentioned in the Insolvency and Bankruptcy Code, 2016 – CS Anagha Anasingaraju, Liquidator for Pandit Automotive Pvt. Ltd. Vs. Bank of Baroda (Earlier Vijaya Bank) and Ors. – NCLT Mumbai Bench Read Post »

Restoration of CIRP petition can be allowed when the Petition was disposed of since the Corporate Debtor had already been admitted under CIRP in another case, even when liberty was not mentioned in the original order – Indian Renewable Energy Development Agency Ltd. Vs. Shree Basaveshwara Sugars Ltd. – NCLT Bengaluru Bench

/ 11 minutes of reading

Hon’ble NCLT Bengaluru Bench held that:

(i) Promoters of the Corporate Debtor cannot be allowed to indulge in multiple web of litigation in various fora; only with a design and plan to stall the insolvency process in this manner; with the ultimate objective to keep maintain and the control over the assets of the Corporate Debtor. The Corporate Debtor is conscious of the fact that there is a Debt and Default; however, they have planned to put there hindrances in the smooth process under IBC for the aforesaid objective which cannot be allowed.
(ii) Non mentioning of the specific liberty in the original order is inconsequential; when the restoration/revival is warranted on a basis of the legally valid reasoning, while no such liberty had been mentioned in the original order when the application was disposed of as withdrawn in view of the settlement.

Restoration of CIRP petition can be allowed when the Petition was disposed of since the Corporate Debtor had already been admitted under CIRP in another case, even when liberty was not mentioned in the original order – Indian Renewable Energy Development Agency Ltd. Vs. Shree Basaveshwara Sugars Ltd. – NCLT Bengaluru Bench Read Post »

Appellant’s claim under Maharashtra Value Added Tax, 2002 and GST cannot be accepted as Secured Creditor and as per Section 30(2) of the IBC – Department of State Tax, Through The Deputy Commissioner of State Tax Vs. Pranav Constructions Systems Pvt. Ltd. & Anr. – NCLAT New Delhi

/ 5 minutes of reading

Hon’ble NCLAT referring judgment in Department of State Tax v. Zicom Saas Pvt. Ltd. & Anr. (2023) ibclaw.in 109 NCLAT, holds that Appellant’s claim cannot be accepted as Secured Creditor and as per Section 30(2) of the Code, the Appellant was entitled only for amount not less than the amount to be received by the Appellant in event of liquidation. Present is not a case where it is claimed that amount is less than the liquidation value.

Appellant’s claim under Maharashtra Value Added Tax, 2002 and GST cannot be accepted as Secured Creditor and as per Section 30(2) of the IBC – Department of State Tax, Through The Deputy Commissioner of State Tax Vs. Pranav Constructions Systems Pvt. Ltd. & Anr. – NCLAT New Delhi Read Post »

Will the sale of Corporate Debtor as a Going Concern have precedence, rather than resorting to the Scheme of Compromise under Section 230(1) of the Companies Act, 2013 – Narottamka Trade & Vyapaar Pvt. Ltd. Vs. SPP Insolvency Professionals LLP Liquidator Kamachi Industries Ltd. and Anr. – NCLAT Chennai

/ 31 minutes of reading

Hon’ble NCLAT held that:

(i) The sale of the Corporate Debtor as a going concern under Section 32(e) & 32A is more transparent and effective; therefore, the sale of the Corporate Debtor as a going concern will have precedence, rather than resorting to the Scheme of Compromise under Section 230 (1) of the Companies Act, 2013.
(ii) While taking action under Chapter 6 of Liquidation Process Regulations, dealing with realizations of assets of the Corporate Debtor, selling the Corporate Debtor as a going concern, will have to be the first priority for the Liquidator, in order to meet the objective of the I & B Code, 2016, i.e. the Corporate Debtor is to be kept, as a going concern after resolution of the insolvency.

Will the sale of Corporate Debtor as a Going Concern have precedence, rather than resorting to the Scheme of Compromise under Section 230(1) of the Companies Act, 2013 – Narottamka Trade & Vyapaar Pvt. Ltd. Vs. SPP Insolvency Professionals LLP Liquidator Kamachi Industries Ltd. and Anr. – NCLAT Chennai Read Post »

Development rights created in favour of Corporate Debtor constitute ‘property’ within the meaning of Section 3(27) of the IBC and the RP has to include in Information Memorandum the assets in which the corporate debtor has development rights | Adjudicating Authority does not lack jurisdiction in deciding whether development rights are part of the CIRP or it should be excluded and parties need not have to be relegated to the Civil Court – K.H. Khan and Anr. Vs. Art Constructions Pvt. Ltd. and Ors. – NCLAT New Delhi

/ 85 minutes of reading

Hon’ble NCLAT held that:

(i) The development rights created in favour of the corporate debtor constitute “property” within the meaning of Section 3(27) of the IBC.
(ii) The Adjudicating Authority had jurisdiction to examine the application on merits and take a decision as to whether the subject land can be treated to be asset of the corporate debtor or not.
(iii) The proceedings conducted by the Sole Arbitrator and the orders passed by the Sole Arbitrator does not amount to an arbitral award under the Arbitration & Conciliation Act, 1996 determining the rights of both the parties so as to bind both the parties in any subsequent proceedings.
(iv) IRP/RP has rightly included the subject land in the Information Memorandum/ CIRP and he was not precluded by virtue of Section 18(f) explanation from asserting development rights in the subject land.

Development rights created in favour of Corporate Debtor constitute ‘property’ within the meaning of Section 3(27) of the IBC and the RP has to include in Information Memorandum the assets in which the corporate debtor has development rights | Adjudicating Authority does not lack jurisdiction in deciding whether development rights are part of the CIRP or it should be excluded and parties need not have to be relegated to the Civil Court – K.H. Khan and Anr. Vs. Art Constructions Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Section 33(2) of IBC empowers the CoC for deciding to initiating liquidation even before inviting Resolution Plans | Decision of CoC to liquidate the Corporate Debtor is not open to Judicial Review | A liquidation order passed under Section 33 of IBC can be challenged only on the grounds of material irregularity or fraud, as provided under Section 61(4) of Insolvency Code – Sunil Surrendrakumar Kakkad Vs. Sujyot Infrastructure Pvt. Ltd. – NCLAT New Delhi

/ 27 minutes of reading

The Hon’ble NCLAT held that:

(i) Section 33(2) of the IBC unambiguously shows that it is not incumbent upon the CoC to complete the steps for resolution of the Corporate Debtor before exercise of its jurisdiction to pass an order of liquidation of the Corporate Debtor
(ii) The use of the phrase “any time” twice clearly reinforces the legislative intent to empower the CoC to take decision to liquidate the Corporate Debtor any time after its constitution even prior to the preparation of the Information Memorandum (IM) but before confirmation of the resolution plan
(iii) The decision of the CoC to liquidate having been approved by the Adjudicating Authority, the same is not open to judicial review when no grounds have been made out as provided under Section 61(4) of the IBC of material irregularity or fraud committed in relation to such an order.
(iv) The decision of the CoC to liquidate could not have been interfered with by the Adjudicating Authority because of the limited powers of judicial review.

Section 33(2) of IBC empowers the CoC for deciding to initiating liquidation even before inviting Resolution Plans | Decision of CoC to liquidate the Corporate Debtor is not open to Judicial Review | A liquidation order passed under Section 33 of IBC can be challenged only on the grounds of material irregularity or fraud, as provided under Section 61(4) of Insolvency Code – Sunil Surrendrakumar Kakkad Vs. Sujyot Infrastructure Pvt. Ltd. – NCLAT New Delhi Read Post »

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