22/02/2023

Shifting the entire blame on Resolution Professional on grounds of non-performance of duty and making him the scapegoat does not appear to be justified – Shri Guru Containers Vs. Jitendra Palande – NCLAT New Delhi

NCLAT held that though the scope of CIRP related work became limited and restricted by the fact that progress got stonewalled due to lack of flow of information and lack of claims, diligence on the part of the IRP in proceeding with the CIRP cannot be found to be wanting. Shifting the entire blame on the IRP on grounds of non-performance of duty and making him the scapegoat does not appear to be justified. It is equally important for the creditors to play a catalytic role in the insolvency resolution process given the present regime of creditor-driven IBC. The rigours of similar standards of discipline should also apply on the creditors. This is clearly a case where the CIRP process was being hindered due to want of cooperation and participation from the creditors. The conduct of the Operational Creditor in the present case is deprecatory in that once the CIRP process had commenced, the Operational Creditor went into a sleeping mode. This position has been further aggravated by the fact that it was the Appellant/Operational Creditor who had triggered this judicial process and then abdicated himself from all responsibilities. That the Operational Creditor did not seem interested in resolution of the Corporate Debtor is evident from the fact that till date no claim has been filed with the IRP.

Shifting the entire blame on Resolution Professional on grounds of non-performance of duty and making him the scapegoat does not appear to be justified – Shri Guru Containers Vs. Jitendra Palande – NCLAT New Delhi Read Post »

An order of the Hon’ble High Court shall be binding on the Adjudicating Authority (Tribunal) established under Section 419(4) of the Companies Act, 2013 exercising Territorial Jurisdiction – M/s. Indra Marshal Power Pvt. Ltd. Vs. M/s. Akshaya Irrigation Products Pvt. Ltd. – NCLAT Chennai

NCLAT held that an Order of the Hon’ble High Court passed in a given case shall be binding on the Adjudicating Authority (Tribunal) established under Section 419(4) of the Companies Act, 2013 exercising Territorial Jurisdiction. To put it differently, the propriety, sobriety and the comity of judicial discipline require an Adjudicating Authority (Tribunal) is to follow the Order of the Hon’ble High Court in true letter and spirit and without any deviation, whatsoever. No wonder, an order / decision, is an Authority for what it actually decides. It is highly inappropriate and impermissible for an Adjudicating Authority (Tribunal) not to follow the Order, passed by the Hon’ble High Court.

An order of the Hon’ble High Court shall be binding on the Adjudicating Authority (Tribunal) established under Section 419(4) of the Companies Act, 2013 exercising Territorial Jurisdiction – M/s. Indra Marshal Power Pvt. Ltd. Vs. M/s. Akshaya Irrigation Products Pvt. Ltd. – NCLAT Chennai Read Post »

The Courts and Tribunals while deciding the rights of the parties under any contract or agreement shall decide the same by reading the entire terms and conditions of contract or agreement as a whole and not by reading one or two Clauses in isolation – Zee Entertainment Enterprises Ltd. Vs. Indusind Bank Ltd. – NCLT Mumbai Bench

NCLT held that it is settled proposition of law that date of default would never change unless there are subsequent payments. The law does not prescribe any particular format or a detailed notice. The object and purpose of notice in commercial transactions more so in loan transactions is a mere intimation about default so as to afford an opportunity to the borrower or guarantor to repay the same. The law does not contemplate a lengthy notice running into number of pages. The Courts and Tribunals has to merely see whether the occurrence of default is intimated to the borrower/guarantor or not. The Courts and Tribunals shall not dismiss or invalidate the proceedings filed by banks and financial institutions against defaulting borrowers merely on hyper technical pleas of this nature.

The Courts and Tribunals while deciding the rights of the parties under any contract or agreement shall decide the same by reading the entire terms and conditions of contract or agreement as a whole and not by reading one or two Clauses in isolation – Zee Entertainment Enterprises Ltd. Vs. Indusind Bank Ltd. – NCLT Mumbai Bench Read Post »

NCLAT set aside an order in which NCLT dismissing Sec. 19(2) of IBC (non-cooperation by suspended management) application imposed cost of Rs.25,000/- on the RP – Sanjai Kumar Gupta, RP of Stone India Ltd. Vs. Gouri Prasad Goenka – NCLAT New Delhi

This Appeal has been filed by Resolution Professional of the Corporate Debtor against the order dated 02.12.2022 passed by the NCLT, Kolkata Bench, Kolkata, by which IA filed by the RP under Section 19(2) of IBC has been dismissed as infructuous. The Adjudicating Authority has also imposed cost of Rs.25,000/- on the RP. NCLAT held that the prosecution under Section 236 is a different aspect from running a CIRP as per timeline prescribed in the IBC. The Adjudicating Authority passed several orders on IA(I.B.C.)/678(KB)2022, where Adjudicating Authority opined that Respondent No.1 is deliberately not cooperating with the RP and is not complying with the directions issued by the Adjudicating Authority. The Adjudicating Authority directed personal appearance of Respondent No.1 on 07.09.2022 and the same was again reiterated on 14.10.2022 when Adjudicating Authority noted the non-cooperation of Respondent No.1, then suddenly how the Application has been rendered infructuous and frivolous is not explained in the order dated 02.12.2022.

NCLAT set aside an order in which NCLT dismissing Sec. 19(2) of IBC (non-cooperation by suspended management) application imposed cost of Rs.25,000/- on the RP – Sanjai Kumar Gupta, RP of Stone India Ltd. Vs. Gouri Prasad Goenka – NCLAT New Delhi Read Post »

The rules of limitation, prescribe that a remedy can be exercised only upto a certain point of time – Southern Power Distribution Company of Telangana Ltd. Vs. CA. Swaminathan Prabhu Liquidator – NCLAT Chennai

NCLAT held that the Rules of Limitation, prescribe that a remedy can be exercised, only upto a certain point of time and not subsequently / later, as the case may be. In reality, the Litigants / Parties / Stakeholders, are to be diligent, and they are not to be an indolent persons, and not to adopt a careless and a negligent attitude, keeping in mind of the fact that speed is the gist of the Code. 2016.
In the light of foregoing detailed deliberations and this Tribunal, taking note of the fact that in the present case, the delay, that has occasioned in preferring the instant Appeal, is 79 days, which is beyond the specified period, contemplated under Section 61 of the Code, 2016.

The rules of limitation, prescribe that a remedy can be exercised only upto a certain point of time – Southern Power Distribution Company of Telangana Ltd. Vs. CA. Swaminathan Prabhu Liquidator – NCLAT Chennai Read Post »

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