24/08/2023

When Secured Creditor fails to comply Regulation 21A, the asset which is subjected to security interest shall become part of the liquidation estate – ICICI Bank Ltd. Vs. MBS Impex Pvt. Ltd. – NCLT Hyderabad Bench

/ 2 minutes of reading

NCLT Hyderabad Bench held that:
(i) On perusal of the Regulation 21A of IBBI Liquidation Process Regulations, 2016, it is clear that, when the secured creditor fails to comply the said Regulation 21A, the asset which is subjected to security interest shall become part of the liquidation asset. Admittedly, the secured applicant failed to realize the value of the secured asset within 180 days. Therefore, Sub-Rule 3 of Regulation 21A of IBBI Liquidation Process Regulation, 2016 comes into force.
(ii) On perusal of the application, it did not disclose any tenable reason for extension of time. Here it may be stated that like Resolution, Liquidation is also time bound and any delay in liquidation results in deterioration of the asset value, which will not be in the interests of the lenders and all other stake holders. Therefore, under the circumstances the application being devoid of merit or substance is liable to be dismissed. Accordingly, the same is hereby dismissed with no costs.

When Secured Creditor fails to comply Regulation 21A, the asset which is subjected to security interest shall become part of the liquidation estate – ICICI Bank Ltd. Vs. MBS Impex Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

The use of the term ‘Default’ in Section 10A of IBC makes it clear that irrespective of the fact that the debt may or may not have occurred during the excluded period, but if the default in payment of such debt arose during the said period, then no proceeding for CIRP can ever be initiated against the Corporate Debtor for the said default occurring during the said period – Oncquest Laboratories Pvt. Ltd. Vs. Sanya GIC Imaging Pvt. Ltd. – NCLT New Delhi Bench Court-V

/ 5 minutes of reading

The use of the term ‘Default’ in Section 10A makes it clear that irrespective of the fact that the debt may or may not have occurred during the excluded period, but if the default in payment of such debt arose during the said period, then no proceeding for CIRP can ever be initiated against the Corporate Debtor for the said default occurring during the said period. In addition to that, admittedly, the debt claimed by the Operational Creditor worth Rs. 1,05,43,850/- (Rupees One Crore Five Lacs Forty-Three Thousand Eight Hundred Fifty) is inclusive of the invoices raised during the excluded period and if the invoices raised during the excluded period are removed from calculation of the debt amount, the claim of the Operational Creditor would not meet the threshold limit of Rs. 1 Crore as required by Section 4 of the Code.

The use of the term ‘Default’ in Section 10A of IBC makes it clear that irrespective of the fact that the debt may or may not have occurred during the excluded period, but if the default in payment of such debt arose during the said period, then no proceeding for CIRP can ever be initiated against the Corporate Debtor for the said default occurring during the said period – Oncquest Laboratories Pvt. Ltd. Vs. Sanya GIC Imaging Pvt. Ltd. – NCLT New Delhi Bench Court-V Read Post »

There can be difference in payment to the secured and unsecured creditors in a Resolution Plan approved as per the commercial wisdom of the CoC – Ganesh Ores Pvt. Ltd. Vs. Vijaykumar V. Iyer & Anr. – NCLAT New Delhi

/ 3 minutes of reading

In this case, the Appellant submits that the distribution is unjust as unsecured creditors has been allocated less amount than secured creditors. NCLAT held that there can be difference in payment to the secured and unsecured creditors in the plan approved as per the commercial wisdom of the CoC. Appeal is dismissed.

There can be difference in payment to the secured and unsecured creditors in a Resolution Plan approved as per the commercial wisdom of the CoC – Ganesh Ores Pvt. Ltd. Vs. Vijaykumar V. Iyer & Anr. – NCLAT New Delhi Read Post »

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