20/10/2023

Money advanced by Financial Creditor to Corporate Debtor does not amount to financial debt as envisaged under Section 5(8) of the Insolvency and Bankruptcy Code, 2016 – Meehika Buildcon LLP Vs. City Star Infrastructures Ltd. – NCLT Kolkata Bench

NCLT Kolkata Bench held that the money advanced by the Financial Creditor to the Corporate Debtor does not amount to financial debt as envisaged under Section 5(8) of the Insolvency and Bankruptcy Code, 2016 as upon the successful completion of the obligations contained in the said Term Sheet, the same would lead to execution of a Joint Development Agreement. On this ground alone, we find that the present petition is not maintainable and hence stands rejected.

Money advanced by Financial Creditor to Corporate Debtor does not amount to financial debt as envisaged under Section 5(8) of the Insolvency and Bankruptcy Code, 2016 – Meehika Buildcon LLP Vs. City Star Infrastructures Ltd. – NCLT Kolkata Bench Read Post »

A hair-cut in Resolution Plan cannot be construed as being violative of Section 30(2)(e) of the IBC, the minority Homebuyers have to necessarily sail with the majority within the class – Mr. Ankur Narang & Ors. Vs. Mr. Nilesh Sharma RP of Today Homes and Infrastructure Pvt. Ltd. & Ors. – NCLAT New Delhi

The issue in this case is whether objections raised by a wafer-thin, miniscule minority amongst the homebuyers against the collective business decision taken by the Home Buyers can survive and be amenable to judicial intervention.

Hon’ble NCLAT held that:
(i) The democratic principles of a determinative role of majority opinion have been enshrined in the statutory construct of the IBC and hence the minority homebuyers have to necessarily sail with the majority within the class.

(ii) When the majority has approved the resolution plan, the objections raised by the homebuyers in minority are inconsequential.

(iii) Once the CoC has approved the resolution plan by requisite majority and the same is in consonance with applicable provisions of law the same cannot be a subject matter of judicial review and modification.

(iv) Merely because there is a reduction in the claim of any creditor does not make the resolution plan fall foul of law.

(v) Any clause in the resolution plan which requires creditors to take a hair-cut cannot be construed as being violative of Section 30(2)(e) of the IBC.

(vi) NCLAT quite agrees with the NCLT that “resolution plan providing a lesser amount than admitted does not make it illegal” and upheld the decision of the NCLT.

A hair-cut in Resolution Plan cannot be construed as being violative of Section 30(2)(e) of the IBC, the minority Homebuyers have to necessarily sail with the majority within the class – Mr. Ankur Narang & Ors. Vs. Mr. Nilesh Sharma RP of Today Homes and Infrastructure Pvt. Ltd. & Ors. – NCLAT New Delhi Read Post »

Operational Creditor is not entitled for benefit of Section 14 of the Limitation Act where the Suit filed by Operational Creditor was withdrawn on its own application without any liberty to institute a fresh suit – GRI Towers India Pvt. Ltd. Vs. Inox Wind Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) Suit was withdrawn without any liberty from the Court to institute a fresh proceeding and termination of suit cannot be held on ground of defect of jurisdiction on cause of like nature.
(ii) The proceedings under IBC are not proceedings for recovery of contractual dues, as is apparent from the facts of the present case the Operational Creditor has initiated proceeding for recovery of its contractual dues arising out of contract between the parties. Suit for recovery of dues was already filed by the Operational Creditor which was withdrawn by the Operational Creditor.
(iii) It is, however, relevant to notice that withdrawal of the suit was not on the ground contended by the Operational Creditor nor any liberty was granted by the Civil Court to institute a fresh suit nor Operational Creditor at any point of time resorted to the proceeding of arbitration which according to the Operational Creditor was reason for withdrawal of suit.
(iv) Upheld decision of the NCLT Chandigarh Bench.

Operational Creditor is not entitled for benefit of Section 14 of the Limitation Act where the Suit filed by Operational Creditor was withdrawn on its own application without any liberty to institute a fresh suit – GRI Towers India Pvt. Ltd. Vs. Inox Wind Ltd. – NCLAT New Delhi Read Post »

Whether the Registration of assignment is mandatory under Section 7 of the IBC – Manavta Tradelink Pvt. Ltd. Vs. Manikaran Vincom Pvt. Ltd. – NCLT Kolkata Bench

In this Section 7 application, the dispute is only with the legality of the assignment in the absence of the registration of the assignment. NCLT Kolkata Bench held that:
(i) Registration of assignment is not mandatory. Even otherwise the Corporate Debtor never disputed the assignment till date. The Corporate Debtor was in correspondence with the applicant seeking time to repay the loan with interest and therefore, at this stage, the Respondent cannot question the validity of assignment.
(ii) allowed application filed under Section 7 of the Code and initiated CIRP against Manikaran Vincom Pvt. Ltd..

Whether the Registration of assignment is mandatory under Section 7 of the IBC – Manavta Tradelink Pvt. Ltd. Vs. Manikaran Vincom Pvt. Ltd. – NCLT Kolkata Bench Read Post »

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