22/02/2022

Liquidator cannot brushed aside the decisions arrived at by the Interim Resolution Professional/‘Resolution Professional’ except for any subsequent development as arisen in respect of the claims – Axis Bank Ltd. Vs. Samruddhi Realty Ltd. – NCLAT Chennai

NCLAT holds that a Tribunal has the power to look behind the judgement on which the Creditor cements his proof with a view to decide whether the Debt is really and truly due. A Liquidator has these powers, while functioning in a quasi, judicial status. As a matter of fact, the Tribunal and the Liquidator may not look behind every decision/judgement as a matter of routine. A Tribunal can interfere where the Liquidator has not exercised his discretion in a bona fide manner or he was proposing to do an act which no reasonable or prudent person will do. A Liquidator as an Officer of the Tribunal is to act justly and fairly while dealing with an individual who has an adverse claim to his own and does not stand on his right either in equity or in Law, as opined by this Tribunal.

Liquidator cannot brushed aside the decisions arrived at by the Interim Resolution Professional/‘Resolution Professional’ except for any subsequent development as arisen in respect of the claims – Axis Bank Ltd. Vs. Samruddhi Realty Ltd. – NCLAT Chennai Read Post »

No insolvency can be initiated against Personal Guarantor of NBFC/Financial Service Providers(FSP), if the concerned NBFC/FSP does not fall within the category of FSP Threshold Notification issued under Section 227 of IBC i.e. not having assets size of Rs. 500 cores or more – Rekha Singh Vs. Shapoorji Pallonji Finance Pvt. Ltd. – NCLT Jaipur Bench

Adjudicating Authority holds that Application(s) for CIRP can be initiated against any Personal Guarantor(s) to a Corporate Debtor irrespective of CIRP against the corporate Debtor, which issue is no longer res integra. Insolvency resolution process(es) can be initiated against the Personal Guarantor(s) of a NBFC / FSP irrespective of CIRP against the NBFC, provided that the concerned NBFC falls within the category of those FSPs having assets size of Rs. 500 cores or more, thus being included in the definition of Corporate Debtor under IBC and being construed as Financial Service Provider wherever the term Corporate Debtor occurs in the Code.

No insolvency can be initiated against Personal Guarantor of NBFC/Financial Service Providers(FSP), if the concerned NBFC/FSP does not fall within the category of FSP Threshold Notification issued under Section 227 of IBC i.e. not having assets size of Rs. 500 cores or more – Rekha Singh Vs. Shapoorji Pallonji Finance Pvt. Ltd. – NCLT Jaipur Bench Read Post »

Section 7 of the Code is concerned with only two factors. There must be a debt and it must be due and payable in the law and there is a default – Reliance Asset Reconstruction Company Ltd. Vs. Narendra Plastics Pvt. Ltd. – NCLAT New Delhi

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Section 7 of the Code is concerned with only two factors. There must be a debt and it must be due and payable in the law and there is a default – Reliance Asset Reconstruction Company Ltd. Vs. Narendra Plastics Pvt. Ltd. – NCLAT New Delhi Read Post »

Withdrawal of Section 7 Petition filed under the IBC Code, 2016 against the Principal Borrower will not be a bar for the Creditor/Lender in initiating fresh CIRP against the Guarantor – Rajnish Gupta Vs. Union Bank of India & 1 Other – NCLAT New Delhi

NCLAT holds that as the CIRP proceedings against the Principal Borrowers was withdrawn under Section 12A of the Code, the Respondent/Lender is precluded from instituting any fresh suit in respect of the same subject matter and doing so would be in contravention of Order 23 Rule 1(4) of the Civil Procedure Code. It is a well settled preposition in Law that the creditor is not bound to exhaust his/its remedy against the Principal Borrower before invoking the Guarantor or suing the Guarantor for payment of outstanding sum(s), (unless otherwise agreed to in the Guarantee Deed). A suit can be maintained against the Guarantor for payment of outstanding sums in connection with the Loan extended to the Borrower even if the Borrower itself has not been sued by the Lender. This Tribunal is of the considered opinion that the Lender has an independent access to the Guarantor issued by the Principal Borrowers. Therefore, this Tribunal holds that withdrawal of Section 7 Petition filed under the IBC Code, 2016 against the Principal Borrower is not a fetter in initiating CIRP against the Guarantor in accordance with Law

Withdrawal of Section 7 Petition filed under the IBC Code, 2016 against the Principal Borrower will not be a bar for the Creditor/Lender in initiating fresh CIRP against the Guarantor – Rajnish Gupta Vs. Union Bank of India & 1 Other – NCLAT New Delhi Read Post »

Ramesh Kumar Suneja Vs. Pawan Buildwell Pvt. Ltd. – NCLAT New Delhi

NCLAT holds that it is to be point out that Section 29A(c) of the Code, 2016 relates to persons not eligible to be Resolution Applicant and in fact, the Code has bifurcated such persons into two groups as seen sub clauses (c) & (g) of Section 29A of the Code, 2016. Moreover, if an individual was a promoter/in the management, or control of a Corporate Debtor, in which a preferential transaction, undervalue transaction and extortionate credit transaction or a fraudulent transaction had taken place and in respect of which an Order was passed by the Adjudicating Authority in terms of the Code, 2016, such person was ineligible to submit a Resolution Plant under 29A(g) of the Code. In effect, only such individuals who do not come under sub-clause (g) of Section 29A of the Code, 2016, are eligible to furnish Resolution Plan under clause (c) of Section 29A, if they happen to be individuals, who are in the erstwhile management or control of the Corporate Debtor, as per decision of the Hon’ble Supreme Court in Arcelormittal India Private Limited V. Satish Kumar Gupta [2018] ibclaw.in 31 SC.

Ramesh Kumar Suneja Vs. Pawan Buildwell Pvt. Ltd. – NCLAT New Delhi Read Post »

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