20/12/2024

Distinguishing factor between the sale of the corporate debtor as a going concern [clause (e) of Liquidation Regulation 32] and the sale of the business of the corporate debtor as a going concern [clause (f)] | Most of the stringent provisions that apply to the resolution plan are conspicuously absent in the case of sale as a going concern – Bhola Ram Steels Pvt. Ltd. Vs. Sunil Kumar Agarwal, Liquidator of Vistar Metal Industries Pvt. Ltd. – NCLT Mumbai Bench

/ 16 minutes of reading

This judgment covers:

A. Sale of Corporate Debtor under Liquidation Process
B. Distinguishing factor between sub-clause (e) and per sub-clause (f) of the Regulation 32 of the Liquidation Process Regulations
C. Definition of ‘going concern’
D. Does the sale of the Corporate Debtor as a Going Concern have similar attributes and characteristics of a Resolution Plan sanctioned under Section 31 of the IBC?
E. The clean state theory in case of sale of the corporate debtor as a going concern during the liquidation process
F. Process Document’s terms are paramount
G. Reliefs and Waivers under Going Concern Sale

Distinguishing factor between the sale of the corporate debtor as a going concern [clause (e) of Liquidation Regulation 32] and the sale of the business of the corporate debtor as a going concern [clause (f)] | Most of the stringent provisions that apply to the resolution plan are conspicuously absent in the case of sale as a going concern – Bhola Ram Steels Pvt. Ltd. Vs. Sunil Kumar Agarwal, Liquidator of Vistar Metal Industries Pvt. Ltd. – NCLT Mumbai Bench Read Post »

There is no restrain on invocation on the Performance Bank Guarantee during currency of the CIRP – WAPCOS Ltd. Vs. D. Thakkar Constructions Pvt. Ltd. Through Ram Ratan Kanoongo – NCLAT New Delhi

/ 2 minutes of reading

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There is no restrain on invocation on the Performance Bank Guarantee during currency of the CIRP – WAPCOS Ltd. Vs. D. Thakkar Constructions Pvt. Ltd. Through Ram Ratan Kanoongo – NCLAT New Delhi Read Post »

In the absence of insolvency proceedings against the Corporate Debtor, the Adjudicating Authority is DRT and not NCLT? | If Corporate Debtor has already been resolved or even liquidated, the essence of proceedings against a Personal Guarantor remains a recovery proceeding – Aditya Birla Finance Ltd. Vs. Sarita Mishra – NCLT Kolkata Bench

/ 7 minutes of reading

The Hon’ble NCLT Kolkata Bench held that:
(i) If the Corporate Debtor has already been resolved or even liquidated and there is no scope for further value maximization of the Corporate person, the proceedings against the personal guarantor are relegated to a modus of recovery only and not that of resolution of insolvency.
(ii) The essence of proceedings against a personal guarantor remains a recovery proceeding, which is clear from the words “Repayment Plan” as against a “Resolution Plan”, which is so generic a word meant for resolving a corporate person.
(iii) It is recognized by the legislature that for Part-III, the Adjudicating authority shall be Debt Recovery Tribunal unless the context otherwise requires. This context has then been clearly laid bare in Section 60(4) above, that in such a context i.e. where the CIRP/liquidation is proceeding before a NCLT, the NCLT shall have powers of the DRT.

In the absence of insolvency proceedings against the Corporate Debtor, the Adjudicating Authority is DRT and not NCLT? | If Corporate Debtor has already been resolved or even liquidated, the essence of proceedings against a Personal Guarantor remains a recovery proceeding – Aditya Birla Finance Ltd. Vs. Sarita Mishra – NCLT Kolkata Bench Read Post »

Even though the Clause (1C) and (1D) of Schedule I to Liquidation Regulations is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes – S M Steels and Power Ltd. Vs. Pankaj Dhanuka Liquidator of Corporate Power Ltd. – NCLT Kolkata Bench

/ 2 minutes of reading

The Hon’ble NCLT Kolkata Bench held that the essence of Regulation 33(3) of the IBBI (Liquidation Process) Regulations is that in case a collusion exists it would lead to an under recovery of the assets of the Corporate Debtor which is against the primary purpose of the IBC, 2016. As can be made out from Regulations 33 Schedule I is 1C and 1D that even though the Schedule I is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes.

Even though the Clause (1C) and (1D) of Schedule I to Liquidation Regulations is sometime held to be directory in nature, however usage of word “Shall” make it more definitive and rightly for the reasons of transparency and to above any arbitrariness in the public procurement processes – S M Steels and Power Ltd. Vs. Pankaj Dhanuka Liquidator of Corporate Power Ltd. – NCLT Kolkata Bench Read Post »

In absence of any written agreement between the parties containing a clause of payment Interest, interest part cannot be included in the principal amount – Evergreen Construction (Durgapur) Pvt. Ltd. Vs. GPT Casting Ltd. – NCLT Kolkata Bench

/ 1 minute of reading

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In absence of any written agreement between the parties containing a clause of payment Interest, interest part cannot be included in the principal amount – Evergreen Construction (Durgapur) Pvt. Ltd. Vs. GPT Casting Ltd. – NCLT Kolkata Bench Read Post »

As long as a Corporate Debtor is categorised or registered under the relevant provisions for the Financial Service Provider, the Section 7 of IBC cannot be invoked, irrespective of the details surrounding the conditions attached to the FSP | A question relating to violation of the certificate as provided by the RBI, falls beyond the purview of NCLT – Sital Leasing and Finance Ltd. Vs. Gracious Portfolio Pvt. Ltd. – NCLT New Delhi Bench

/ 3 minutes of reading

The NCLT New Delhi Bench held that the as long as the FSPt is categorised or registered under the relevant provisions for the Financial Service Provider, the provisions of Section 7 of the Code cannot be invoked against the FSP, irrespective of the details surrounding the conditions attached to the FSP. The settled position of law, as elucidated hereinabove, is that such a question relating to violation of the certificate as provided by the Reserve Bank of India, falls beyond the purview of this Adjudicating Authority.

As long as a Corporate Debtor is categorised or registered under the relevant provisions for the Financial Service Provider, the Section 7 of IBC cannot be invoked, irrespective of the details surrounding the conditions attached to the FSP | A question relating to violation of the certificate as provided by the RBI, falls beyond the purview of NCLT – Sital Leasing and Finance Ltd. Vs. Gracious Portfolio Pvt. Ltd. – NCLT New Delhi Bench Read Post »

If no application for insolvency has been filed against the Corporate Debtor, a petition under Section 95(1) of IBC, filed against Personal Guarantor, is not maintainable before NCLT – Tata Capital Financial Services Ltd. Vs. Arjun Agarwal – NCLT Kolkata Bench

/ 7 minutes of reading

The Hon’ble NCLT Kolkata Bench held that:

(i) If the Corporate Debtor has already been resolved or even liquidated and there is no scope for further value maximization of the Corporate person, the proceedings against the personal guarantor are relegated to a modus of recovery only and not that of resolution of insolvency.
(ii) When the CIRP or liquidation proceeding is pending before a NCLT, an application relating to the Insolvency resolution or liquidation or Bankruptcy of a Corporate guarantor or Personal Guarantor, as the case may be of such Corporate Debtor, shall be filed before such NCLT ostensibly to avoid multiplicity of the judicial fora. However, when this is not so, the proceedings in our humble opinion are recovery proceedings only and not being a recovery forum, the NCLT shall not be the Adjudicating authority in such cases.

If no application for insolvency has been filed against the Corporate Debtor, a petition under Section 95(1) of IBC, filed against Personal Guarantor, is not maintainable before NCLT – Tata Capital Financial Services Ltd. Vs. Arjun Agarwal – NCLT Kolkata Bench Read Post »

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench

/ 2 minutes of reading

It is well settled law that an approved Resolution plan is binding on  all the stake holders and in this case, the Hon’ble Tribunal is of the view the resolution plan has been approved with payments in instalments only to the assenting financial creditors whereas the dissenting financial creditors will have to be paid in full before the assenting financial creditors are paid. We have also considered the explanation 1 of Section 30 (2) of IB Code which says that distribution in accordance with provisions of this clause shall be fair and equitable to such creditors (Operational creditors and dissenting financial creditors).

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench Read Post »

Can Section 60(5) of the IBC be invoked for filing contempt petitions? – Mr. Pankaj Dhanuka, Liquidator of Lanco Kondapalli Power Ltd. Vs. Lanco Kondapalli Power Ltd. and Anr. – NCLAT Chennai

/ 35 minutes of reading

In this case, the following issues are covered:
(i) Contempt proceeding provisions under the Companies Act, 2013.
(ii) Can Section 60(5) of the IBC be attracted for filing of contempt petitions?
(iii) No contempt proceedings would be tenable, as against the inanimate or juristic person.
(iv) Appeal under Section 19 of Contempt of Courts Act will not lie as against the order of rejection of the contempt petition.

Can Section 60(5) of the IBC be invoked for filing contempt petitions? – Mr. Pankaj Dhanuka, Liquidator of Lanco Kondapalli Power Ltd. Vs. Lanco Kondapalli Power Ltd. and Anr. – NCLAT Chennai Read Post »

The default which has occurred when the notices were issued for drawing the proceedings under the SARFAESI Act, reckoning of the period of limitation prescribed under Article 137 the Limitation Act, since has been given a retrospective effect for the purposes of the proceeding under Section 7 or 9 of the IBC – Canara Bank Vs. DAAJ Hotels & Resorts Pvt. Ltd. – NCLAT Chennai

/ 18 minutes of reading

The Hon’ble NCLAT held that commission of a default consciously means, that it is an expression of default when it is realized and accepted by the Financial Creditor and accepted by the Corporate Debtor when the notices under Section 13 (2) of the SARFAESI Act was issued and accepted by the Corporate Debtor. The aspect of default as defined under Section 13 (2) of the SARFAESI Act was to be reckoned from the date notice is issued. It does not mean a debt when held or any part or instalment of the amount becomes due to be payable, but not paid.

The default which has occurred when the notices were issued for drawing the proceedings under the SARFAESI Act, reckoning of the period of limitation prescribed under Article 137 the Limitation Act, since has been given a retrospective effect for the purposes of the proceeding under Section 7 or 9 of the IBC – Canara Bank Vs. DAAJ Hotels & Resorts Pvt. Ltd. – NCLAT Chennai Read Post »

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