17/01/2024

The protection of moratorium under Sec. 14 of IBC will not be available to the directors/officers of the company | NCDRC can initiate proceedings for execution of decree against promoters of Corporate Debtor – Ansal Crown Heights Flat Buyers Association (Regd.) Vs. Ansal Crown Infrabuild Pvt. Ltd. and Ors. – Supreme Court

Hon’ble Supreme Court holds that:
(i) Approves the view taken in the case of P. Mohanraj & Ors. v. Shah Brothers Ispat Pvt. Ltd. (2021) ibclaw.in 24 SC that notwithstanding moratorium, the liability, if any, of the directors/officers will continue. The Hon’ble Court, therefore, permitted the appellants to expressly proceed against the promoters of the company though there was a moratorium under Section 14 of the IBC affecting the company.
(ii) Only because there is a moratorium under Section 14 of the IBC against the company, it cannot be said that no proceedings can be initiated against the opposite party for execution, provided that they are otherwise liable to abide by and comply with the order, which is passed against the company.
(iii) The protection of the moratorium will not be available to the directors/officers of the company.

The protection of moratorium under Sec. 14 of IBC will not be available to the directors/officers of the company | NCDRC can initiate proceedings for execution of decree against promoters of Corporate Debtor – Ansal Crown Heights Flat Buyers Association (Regd.) Vs. Ansal Crown Infrabuild Pvt. Ltd. and Ors. – Supreme Court Read Post »

Issue of the Doctrine of Adverse Possession where Successful Buyer purchased the properties of the Corporate Debtor in Liquidation auction – P.G. Sales Corporation Vs. Laxmanbhai Mohanbhai Vegad and Ors. – NCLT Ahmedabad Bench

In this case, a Security Guard stated that he has been staying in the premises in a small room where he has been staying with his family (and has been working as security guard) for last 39 years and the corporate debtor/suspended management used to deduct the rent amount of the room situated at disputed premises. As he has been in peaceful, continuous, uninterrupted and unobstructed possession of room, he is entitled to own the premises on the basis of “The Doctrine of Adverse Possession” and the principles laid down by Hon’ble Supreme Court in various matters.
Hon’ble NCLT Ahmedabad Bench held that:
(i) At that time of confirming sale, the vacant possession of the premises were handed over to the applicant. As the vacant possession is handed over, it means that it was not occupied by any person at that time. After taking vacant possession from the liquidator it was duty of the purchaser to protect his properties. Therefore, now this cause will not fall within the ambit of liquidation process.
(ii) When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process.

Issue of the Doctrine of Adverse Possession where Successful Buyer purchased the properties of the Corporate Debtor in Liquidation auction – P.G. Sales Corporation Vs. Laxmanbhai Mohanbhai Vegad and Ors. – NCLT Ahmedabad Bench Read Post »

A Liquidator is not on the panel of the Bank is not a valid and reasonable reason to remove/replace | Wisdom/Right for change of Liquidator is not available to SCC | In Liquidation Process Regulation 31A(11), SCC has to record specific reason for replacement of the Liquidator – State Bank of India Vs. Mr. Ramakant Gupta Liquidator of Sujyot Infrastructure Pvt. Ltd. – NCLT Ahmedabad Bench

In this case, SBI has preferred an IA on behalf of SCC for replacement of the present liquidator only with the reason that the present Liquidator is not on the panel of the State Bank of India.

In this important decision on replacement of Liquidator, Hon’ble NCLT Ahmedabad Bench holds that:
(i) The IBBI (Liquidation) Regulation 31A(11) specifically states that the Liquidator can be replaced by the SCC after recording the reasons in the minutes of the SCC.
(ii) It is noticed that there exist a marked difference for change of Resolution Professional and change of Liquidator. During CIRP the COC has the wisdom to replace the RP if there is majority of more than 66% without assigning any specific reason for such replacement as such option is available as a matter of right. In the Liquidation process, the SCC has to record specific reason for replacement of the Liquidator.
(iii) Wisdom or right for change of liquidator is not available to SCC in the Liquidation process.
(iv) The applicant bank had stated only single reason to replace the present Liquidator that the Liquidator is not on the panel of the State Bank of India. In our view; it cannot be a valid and reasonable reason to change or to replace the Liquidator.

A Liquidator is not on the panel of the Bank is not a valid and reasonable reason to remove/replace | Wisdom/Right for change of Liquidator is not available to SCC | In Liquidation Process Regulation 31A(11), SCC has to record specific reason for replacement of the Liquidator – State Bank of India Vs. Mr. Ramakant Gupta Liquidator of Sujyot Infrastructure Pvt. Ltd. – NCLT Ahmedabad Bench Read Post »

Whether Committee of Creditors (CoC) can take decision for liquidation of Corporate Debtor without taking any step regarding resolution in Corporate Insolvency (CIRP), i.e. without publishing Form-G, EOI etc. – ACRE – 81 Trust Through its trustee Assets Care & Reconstruction Enterprise Ltd. and Ors. Vs. Pawan Kumar Goyal IRP of SARE Realty Projects Pvt. Ltd. and Ors. – NCLAT New Delhi

In this case, CoC without following any process under CIRP, took the decision for liquidation of the Corporate Debtor by 88.48% voting share. NCLT New Delhi Bench rejects the IA for liquidation and order for notice u/s 65.
On appeal, Hon’ble NCLAT referring decision in Sunil S. Kakkad Vs. Atrium Infocom Pvt. Ltd. [2020] ibclaw.in 42 NCLAT, holds that there is an error in the approach of the Adjudicating Authority that for the purpose of taking a decision regarding the liquidation of the CD, the CoC has to complete all the steps regarding resolution of the CD because it would be against the spirit of Sec. 33(2) and explanation appended to it wherein the legislature has used the word any time twice i.e., firstly, in Sec. 33(2) and secondly, in the explanation of Sec. 33(2) of the Code that the CoC has the jurisdiction to pass the order of liquidation of the CD, approving it by not less than 66% of the voting share, but it should be before the confirmation of the resolution plan.

Whether Committee of Creditors (CoC) can take decision for liquidation of Corporate Debtor without taking any step regarding resolution in Corporate Insolvency (CIRP), i.e. without publishing Form-G, EOI etc. – ACRE – 81 Trust Through its trustee Assets Care & Reconstruction Enterprise Ltd. and Ors. Vs. Pawan Kumar Goyal IRP of SARE Realty Projects Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Transmission of Shares without obtaining a Succession Certificate cannot be sustained – Avanti Metals Pvt. Ltd. Vs. Alkesh Gupta – NCLAT Chennai

Hon’ble NCLAT held that:
(i) Transmission of shares on the basis of Will can raise complicated issues which require an evidence, to be read by the parties and need to be determined by a Court of Law.
(ii) If the probate proceedings are pending in a Civil Court, then the petition under the Companies Act for rectification of register would not be maintainable. Where there is a dispute as to the heirship of a deceased shareholder, the Company could refuse transfer of shares, until such dispute is resolved by a Competent Court of Law.
(iii) The Succession Certificate, specifies the debts and securities entitles a legal heirs not only to receive the Interest or Dividends but also to negotiate or transfer them.
(iv) From the Section 44 of the Companies Act, 2013, it is cleared that shares are construed as movable property governed by the Articles of Association of the Company and Article 8.15 mandates that a Succession Certificate is required for the transmission of the shares.
(v) The prayer of the first Respondent herein seeking transmission of Shares without even obtaining a Succession Certificate, cannot be sustained. This Tribunal is of the considered view that submission of a Succession Certificate, as provided for under the Articles of Association of the Appellant Company, is required for the transmission of shares of the deceased Member.

Transmission of Shares without obtaining a Succession Certificate cannot be sustained – Avanti Metals Pvt. Ltd. Vs. Alkesh Gupta – NCLAT Chennai Read Post »

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