22/07/2020

When the company is under liquidation, how the suspended management can seek direction from AA to allow him to run the company till it is not being sold as a going concern – Himanshu Prafulchandra Varia Vs. Sunil Kumar Agarwal Liquidator Of Varia Engieering Pvt. Ltd. & Ors. – NCLT Ahmedabad

When the liquidation process is in the verge of completion, the applicant (Suspended Management) filed the instant application with above prayers having no locus standi. It is quite unheard that how the suspended management can seek direction from this Adjudicating Authority to allow him to run the company till it is not being sold as a going concern, when the company is under liquidation. In fact, the suspended management has no locus standi to move such kind of application, when Corporate Debtor company is under the control of the liquidator. Moreover, there is no such statutory provision which allows the Corporate Debtor to run the company till it is sold as going concern. The application so filed by the applicant is not only bad in the eye of law but is blatant misuse of the process of law.

When the company is under liquidation, how the suspended management can seek direction from AA to allow him to run the company till it is not being sold as a going concern – Himanshu Prafulchandra Varia Vs. Sunil Kumar Agarwal Liquidator Of Varia Engieering Pvt. Ltd. & Ors. – NCLT Ahmedabad Read Post »

A liquidator can proceed with the sale of the assets even if it is under attachment by Directorate Of Enforcement – Section 32A of IBC – Mr. Anil Goel (Liquidator in Respect Of Varrsana Ispat Limited) Vs. Deputy Director, Directorate Of Enforcement, Delhi – NCLT Kolkata

NCLT held that section 32-A prohibits any action to be taken by the respondent as against properties of the CD undergoing CIRP or undergoing liquidation. But it would not have any application to the designated partner or an officer who is in default or was in any manner in-charge of or responsible to CD for conduct of its business or associated in any manner who was directly or indirectly involved in commission of such offence. To sum up the properties of a CD under liquidation is also to be exempted from the purview of the commission of such offence. In view of the above said position of law we are of the considered opinion that a liquidator can proceed with the sale of the assets even if it is under attachment by the respondent, to continue the time bound process of liquidation under the provisions of the Code and upon completion of the sale proceedings the buyer can take appropriate steps to release the attachment. It appears to us that the attachment and confiscation of properties of a CD undergoing CIRP or liquidation become void under section 32-A of the Code.

A liquidator can proceed with the sale of the assets even if it is under attachment by Directorate Of Enforcement – Section 32A of IBC – Mr. Anil Goel (Liquidator in Respect Of Varrsana Ispat Limited) Vs. Deputy Director, Directorate Of Enforcement, Delhi – NCLT Kolkata Read Post »

Definition of debt as defined under the IBC does not mean the operational debt only rather it includes financial debt as well as liability or obligation in respect of a claim which is due from any person and default means non payment of debt – M/s Brand Realty Services Ltd. Vs. M/s Sir John Bakeries India Pvt. Ltd. – NCLT

NCLT held that when we shall read all three definition, Sec. 5(21), 3(11) and 3(12) together then it can be said that definition of debt as defined under the IBC does not mean the operational debt only rather it includes financial debt as well as liability or obligation in respect of a claim which is due from any person and default means non payment of debt, but in order to trigger Section 9 of IBC an Operational Creditor is required to establish a default for non payment of Operational debt as defined in Section 5(21) of IBC , which means a claim in respect of the provision of goods Or services including employment or a debt in respect of the 6[payment] of dues arising under any law for the time being in force and if a person fails to establish that, then they can not initiate CIRP under Section 9 of the IBC.

Now it is the settled principle of law that National Company Law Tribunal is not recovery court rather when a default of either financial debt or Operational debt occurred in that case, financial creditor or operational creditor may file an application for initiating corporate insolvency resolution process u/ s 7 or section 9 respectively.

Definition of debt as defined under the IBC does not mean the operational debt only rather it includes financial debt as well as liability or obligation in respect of a claim which is due from any person and default means non payment of debt – M/s Brand Realty Services Ltd. Vs. M/s Sir John Bakeries India Pvt. Ltd. – NCLT Read Post »

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