21/11/2022

Once CIRP admission order under Section 7 of IBC has been stayed by NCLAT, IRP is not entitled to discharge any function and the Corporate Debtor also cannot be restored as it was functioning prior to admission of Section 7 application – Ashok Kumar Tyagi Vs. UCO Bank – NCLAT New Delhi

The difference between stay of an Order and quashing of any Order are well settled. In event on the stay of the admission of Section 7 Application, the Corporate Debtor is allowed to function and position as was existing prior to 28.10.2022(CIRP admission order) is restored, there shall be no difference in staying an Order and quashing of an Order. What the Appellants are asking/praying is restoration of the position as was prior to admission of Section 7 Application. We cannot accept such request made by the Appellant. The Admission Order of Section 7 Application has only been stayed and not quashed thus the Corporate Debtor cannot be permitted to function as it was functioning prior to 28.10.2022. However, in view of the stay of the Order dated 28.10.2022, the IRP can not carry on any functions since the IRP was appointed by the same order and by stay of the Order, no further action can be taken by the IRP in pursuance of the Order dated 28.10.2022.

Once CIRP admission order under Section 7 of IBC has been stayed by NCLAT, IRP is not entitled to discharge any function and the Corporate Debtor also cannot be restored as it was functioning prior to admission of Section 7 application – Ashok Kumar Tyagi Vs. UCO Bank – NCLAT New Delhi Read Post »

Suspended Director who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC – Sanjeev Mahajan Vs. Indian Bank (Erstwhile Allahabad Bank) & Anr. – NCLAT New Delhi

NCLAT held that it is well settled that it is the commercial decision of the CoC which is paramount in the CIRP. The Appellant who is suspended Director of the Corporate Debtor who has already submitted Settlement Proposal was permitted to participate in the meeting of the CoC which is apparent from the minutes of the CoC brought on record. We are of the view that Appellant who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC. CoC can very well ask the Resolution Applicants to revise their plans similarly the Appellant can always be asked to revise his proposal to match the Resolution Applicants’ Offer. It goes without saying that ultimate decision is of the CoC. We thus are of the view that carrying out purpose and intendment of the judgment dated 04.07.2022, the CoC is to deliberate on the two Resolution Plans received in the CIRP as well as Settlement Proposal under Section 12A submitted by the Applicant/ Appellant and thereafter to take a final decision. The CoC is also fully entitled to negotiate with the Resolution Applicant as well as the Appellant to optimise the maximum value.

Suspended Director who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC – Sanjeev Mahajan Vs. Indian Bank (Erstwhile Allahabad Bank) & Anr. – NCLAT New Delhi Read Post »

No issue of bias in case of Resolution Professional’s name is recommended by Creditor in Personal Guarantor insolvency application and the object and purpose both of signature and giving written consent of Resolution Professional is same in Form C of application under Section 95 of IBC – Rahul Arunprasad Patel Vs. State Bank of India – NCLAT New Delhi

NCLAT observed that in the present case since submission of Form A is contemplated in cases other than “who has filed an Application under Section 94 and 95 on behalf of the Guarantor or Creditor, as the case may be”. The purpose of Regulations, 2019, Regulation 4(2) is that before Resolution Professional is appointed, he should give his written consent to the Adjudicating Authority. The Regulations thus clearly contemplates for those cases where appointment is to be made under Section 97(2) and (3) but the mere fact that written consent in the present case is annexed along with Form C does not in any manner affect the nature of the Application which was filed by the Creditor through Resolution Professional in place of signing the Form C written consent has been given which is done additionally by the Resolution Professional. The object and purpose both of signature and giving written consent is same and we do not find any substance in submission of Learned Counsel for the Appellant that due to non-signature of the Resolution Professional there is violation of Rules, 2019 and Regulations, 2019 fatally affecting the Application under Section 95(1).

No issue of bias in case of Resolution Professional’s name is recommended by Creditor in Personal Guarantor insolvency application and the object and purpose both of signature and giving written consent of Resolution Professional is same in Form C of application under Section 95 of IBC – Rahul Arunprasad Patel Vs. State Bank of India – NCLAT New Delhi Read Post »

The fact that the Corporate Debtor was claiming GST input credit from another GST Number cannot be a ground to say that Operational Creditor fails to prove his debt and default – Verender Singh Vs. DVS Infrastructure Pvt. Ltd. & Anr. – NCLAT New Delhi

GST Number which was reflected in the invoices which were issued from May, 2017 to January, 2018 was the GST Number which was registered of the Corporate Debtor and the Corporate Debtor got it surrendered on 28.07.2018 only. Hence, the submission cannot be accepted that demand was invalid. The GST Number which was registered by the Appellant, the Corporate Debtor was also found reflected in the Application, hence, demand cannot be said to be invalid. The fact that the Corporate Debtor was claiming GST input credit from another GST Number cannot be a ground to say that Operational Creditor fails to prove his debt and default.

The fact that the Corporate Debtor was claiming GST input credit from another GST Number cannot be a ground to say that Operational Creditor fails to prove his debt and default – Verender Singh Vs. DVS Infrastructure Pvt. Ltd. & Anr. – NCLAT New Delhi Read Post »

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