17/11/2023

Joint application under Section 7 of IBC can be filed against one or more Corporate Debtors who have come together to develop a Real Estate project and parameters as noticed in Videocon Industries Ltd. and BT & FC Pvt Ltd. cases need not be applied in case of Real Estate Project – Mist Avenue Pvt. Ltd. Vs. Nitin Batra & Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) CIRP in the Real Estate Project has different contours and ramification.
(ii) Consolidated Insolvency Resolution Process can be initiated against one or more Corporate Debtors who have come together to develop a project.
(iii) Parameters as were noticed in SBI vs. Videocon Industries Ltd. (2019) ibclaw.in 17 NCLT and Radico Khaitan Ltd Vs. BT & FC Pvt Ltd. (2021) ibclaw.in 160 NCLAT need not be applied in case of Real Estate Project.
(iv) Requirement of threshold under proviso in Section 7(1) must be fulfilled as on the date of filing of the Application.
(v) Claim of allottees who are barred by time should not be excluded from number of 100 which is required to be proved the threshold
(vi) Allottees settled the matter cannot be excluded in the counting of 100 allottees which are required to be fulfilled as threshold. The mere fact that claim of some other barred by time is insignificant.

Joint application under Section 7 of IBC can be filed against one or more Corporate Debtors who have come together to develop a Real Estate project and parameters as noticed in Videocon Industries Ltd. and BT & FC Pvt Ltd. cases need not be applied in case of Real Estate Project – Mist Avenue Pvt. Ltd. Vs. Nitin Batra & Ors. – NCLAT New Delhi Read Post »

For an moratorium u/s 96 of IBC to come into force, insolvency application should be complete in all respects and without any procedural defects, mere uploading of an application cannot be taken as filing of an application |  Unless there is any repugnancy between the provisions of IBC 2016 and the provisions of SARFAESI Act, 2002, there is no question of IBC 2016 overriding the provisions of the SARFAESI Act, 2002 in totality – Jeny Thankachan Vs. Union of India and Ors. – Kerala High Court

Hon’ble High Court held that:
(i) In the Insolvency Resolution Processes under Part III Chapter III relating to individuals and partnership firms, the interim moratorium under Section 96 and moratorium under Section 101 are automatic by operation of law and is not dependent on any declaration of moratorium by the adjudicating authority.
(ii) Mere uploading of an application under Section 96 of the IBC 2016 cannot be taken as filing of an application.
(iii) In the case of the petitioner, admittedly the NCLT has not treated the application as a valid application by assigning regular case number to the application. As long as the petitioner’s application is not duly numbered by the NCLT, the interim moratorium contemplated under Section 96(1)(b)(i) cannot come into operation.
(iv) It is true that in view of Section 238 of the IBC 2016, the IBC 2016 will have overriding effect. But, Section 238 of the IBC 2016 cannot oust the operation of the Act, 2002 for the reason that the IBC 2016 and the Act, 2002 operate in different fields. Therefore, unless there is any repugnancy between the provisions of the IBC 2016 and the provisions of the Act, 2002, there is no question of IBC 2016 overriding the provisions of the SARFAESI Act, 2002 in totality.
(v) Initiation of a Section 94 (IBC 2016) proceedings by a Partner of an LLP in his capacity as a guarantor, cannot be averted to the proceedings initiated by the Bank against the petitioner, but in his capacity as a guarantor, under the SARFAESI Act, 2002.

For an moratorium u/s 96 of IBC to come into force, insolvency application should be complete in all respects and without any procedural defects, mere uploading of an application cannot be taken as filing of an application |  Unless there is any repugnancy between the provisions of IBC 2016 and the provisions of SARFAESI Act, 2002, there is no question of IBC 2016 overriding the provisions of the SARFAESI Act, 2002 in totality – Jeny Thankachan Vs. Union of India and Ors. – Kerala High Court Read Post »

The status of balance sheets as valid acknowledgment of debts needs to be examined depending upon the facts of each case while considering the mention of such non-acknowledging statements in the annexed notes or the auditor’s report – Mr. Sanil Prakash Sahu, Erstwhile Director of Gwalior Polypipes Ltd. Vs. Kotak Mahindra Bank Ltd. and Ors. – NCLAT New Delhi

NCLAT held that:
(i) The law is well settled that for finding out acknowledgement within the meaning of Section 18 of the Limitation Act, balance sheets can be looked into.
(ii) In Bishal Jaiswal, observed that it would depend on the facts of each case as to whether an entry made in a balance sheet qua, any particular creditor, is unequivocal or has been entered into with caveats.
(iii) the status of balance sheets as valid acknowledgment of debts needs to be examined depending upon the facts of each case while considering the mention of such non-acknowledging statements in the annexed notes or the auditor’s report.
(iv) Merely because the notes to the account and the director’s report narrate the different stages of subsequent litigation with respect to the said unsecured loan, it cannot be said that these notes in any manner diminish the relevance and import of the debt which finds mention in the balance sheets for the purposes of Section 18 of the Limitation Act. Such caveat/information, read together with the balance-sheet do not negate the acknowledgment of that liability.
(v) the Vidarbha judgement was given under very specific set of facts where the realizable dues of the Corporate Debtor were more than the payable dues. The facts in the present case being clearly distinguishable, the Vidarbha judgement cannot be said to apply ipso facto as claimed by the Appellant.

The status of balance sheets as valid acknowledgment of debts needs to be examined depending upon the facts of each case while considering the mention of such non-acknowledging statements in the annexed notes or the auditor’s report – Mr. Sanil Prakash Sahu, Erstwhile Director of Gwalior Polypipes Ltd. Vs. Kotak Mahindra Bank Ltd. and Ors. – NCLAT New Delhi Read Post »

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