15/05/2023 – IBC Laws

When settlement consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, the CIRP can be restored – IDBI Trausteeship Services Ltd. Vs. Nirmal Lifestyle Ltd. – NCLAT New Delhi

May 18, 2023

On Corporate Debtor subsequent to the withdrawal of the Company Petition defaulted in making payment towards the second tranche as per consent term, the Appellant filed an I.A. seeking revival of the Company Petition which has been rejected by Adjudicating Authority observing that when the Company Petition was withdrawn after settlement there is no specific provision anywhere in the Code for reopening of the Company Petition.
NCLAT held that Adjudicating Authority committed error in rejecting the revival application 3196 of 2022 when the consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, rejection of revival is to deny the Financial Creditor rightful remedy. Non-mention of specific liberty in the Order is inconsequential in view of the clear terms in the settlement which was the basis of withdrawal of Company Petition.

When settlement consent term itself contemplates a clause for revival in event of default and default having been committed by the Corporate Debtor, the CIRP can be restored – IDBI Trausteeship Services Ltd. Vs. Nirmal Lifestyle Ltd. – NCLAT New Delhi Read Post »

The legal implementation of the Resolution plan u/s 30(2)(e) is in no way impacted by the CIRP process followed in the First COC meeting and therefore cannot be considered as an objection us 30(2)(e) as it does not impact the implementation of the Resolution plan – Mr. Amit Sangal, Proprietor of Nitin Plastic Vs. Mr. Kairav Anil Trivedi, IRP/RP of Prince MFG Industries Pvt. Ltd. – NCLT Mumbai Bench

May 18, 2023

In this case, the Applicant submits that the IRP was never appointed and approved as RP by the CoC. The IRP has intentionally, willfully and deliberately filed a False and fabricated document of showing himself appointed as RP of the corporate debtor. The IRP concealed the result of e-voting and intentionally and wilfully mispresented and appointed him as RP under section 22 of the Code and filed false result of voting of first COC meeting before this Tribunal. The IRP has committed fraud by violating Section 28 of the Code by executing MOU with third party in collusion with suspended directors of the Corporate Debtor and handed-over the possession of factory along with plant & machinery, moulds, etc. to third party for contract manufacturing with retrospective effect from 05.10.2021 (on said date the IRP has not received the order as well as not made public announcement).
The Adjudicating Authority held that the Applicant/Operational Creditor (who has filed the application us 9 of IBC) has raised an objection related to matter much before issuance of FORM G. Therefore, these grounds cannot be considered as a ground for rejection of the Resolution Plan u/s 30(2)(e). The legal implementation of the Resolution plan u/s 30(2)(e) is in no way impacted by the CIRP process followed in the First COC meeting and therefore cannot be considered as an objection us 30(2)(e) as it does not impact the implementation of the Resolution plan.

The legal implementation of the Resolution plan u/s 30(2)(e) is in no way impacted by the CIRP process followed in the First COC meeting and therefore cannot be considered as an objection us 30(2)(e) as it does not impact the implementation of the Resolution plan – Mr. Amit Sangal, Proprietor of Nitin Plastic Vs. Mr. Kairav Anil Trivedi, IRP/RP of Prince MFG Industries Pvt. Ltd. – NCLT Mumbai Bench Read Post »

When Resolution Plan specifically empowers Successful Resolution Applicant to pursue the avoidance applications, the said provisions of the Plan shall bind everyone including the erstwhile Administrator/RP – Kapil Wadhawan Vs. Piramal Capital & Housing Finance Ltd. & Ors. – NCLAT New Delhi

May 17, 2023

(i) The first submission raised by the learned Counsel for the Appellant is that after completion of the CIRP, avoidance applications, which are not decided by that time, becomes infructuous and cannot be proceeded any further. NCLAT held that Section 26 itself gives clear legislative intent that avoidance applications are different stream than the stream of insolvency resolution process. We may also notice provision of Section 36, sub-section (3) (f), which also gives clear indication of the statutory scheme that even after completion of the CIRP, the statute envisages recoveries through proceedings for avoidance transactions.
(ii) Another submission which has been pressed by the learned Counsel for the Appellant is that Successful Resolution Applicant cannot pursue the avoidance applications and if at all, the avoidance applications can be pursued, it could have been only by the RP and that in the present case the Administrator. NCLAT held that when Resolution Plan specifically empowers the Successful Resolution Applicant to pursue the avoidance applications, the said provisions of the Plan shall bind everyone including the erstwhile Administrator. The submission of the learned Counsel for the Appellant cannot be accepted that it is the erstwhile Administrator/ RP, who could alone, if at all, pursue the avoidance application.

When Resolution Plan specifically empowers Successful Resolution Applicant to pursue the avoidance applications, the said provisions of the Plan shall bind everyone including the erstwhile Administrator/RP – Kapil Wadhawan Vs. Piramal Capital & Housing Finance Ltd. & Ors. – NCLAT New Delhi Read Post »