28/08/2023

When there is a clear statutory bar in entertaining an appeal u/s 42 of IBC, which is filed beyond the period prescribed under the statute, the NCLT cannot exercise its inherent powers and condone the delay – IFCI Ltd. Vs. BS Ltd., In liquidation – NCLT Hyderabad Bench

NCLT Hyderabad Bench held that Section 42, not only deals with the order of rejection, but also deals with the order of acceptance. There is no provision under Section 42 for condoning the delay in filing an appeal. When there is a clear statutory bar in entertaining an appeal u/s 42 of IBC, which is filed beyond the period prescribed under the statute, the NCLT cannot exercise its inherent powers and condone the delay.

When there is a clear statutory bar in entertaining an appeal u/s 42 of IBC, which is filed beyond the period prescribed under the statute, the NCLT cannot exercise its inherent powers and condone the delay – IFCI Ltd. Vs. BS Ltd., In liquidation – NCLT Hyderabad Bench Read Post »

Successful Resolution Applicant (SRA) is not accountable for non-compliance of MCA filing by Corporate Debtor or its Promoters/Director prior to insolvency commencement date, No penalty or interest can be fastened to Corporate Debtor under the new management – Skyhigh Infraland Pvt. Ltd. Vs. Monitoring Committee of Corporate Debtor- NCLT Chandigarh Bench

In this case, Successful Resolution Applicant(SRA) represented before the RoC, Haryana for removal of the earlier Directors and the appointment of new Directors. When the applicant approached the office of RoC Haryana, it was informed that the SRA must file annual previous returns and balance sheets failing which the Corporate Debtor would continue to remain in default of its statutory obligations.
NCLT Chandigarh Bench held that:
(i) Not to hold the present management of the corporate debtor accountable for the default committed by the corporate debtor or its promoters/director prior to insolvency commencement date.
(ii) Allow the applicant to file the returns and the financial statements as required under the provisions of the Companies Act 2013 and other related acts
(iii) If the returns/statements by the new management of the corporate debtor cannot be accepted online through e-filing due to technological issues, the same be accepted in the physical mode
(iv) No penalty or interest arising out of the default committed by the erstwhile management prior to 29.10.2018 can be fastened to the present corporate debtor under the new management.

Successful Resolution Applicant (SRA) is not accountable for non-compliance of MCA filing by Corporate Debtor or its Promoters/Director prior to insolvency commencement date, No penalty or interest can be fastened to Corporate Debtor under the new management – Skyhigh Infraland Pvt. Ltd. Vs. Monitoring Committee of Corporate Debtor- NCLT Chandigarh Bench Read Post »

Adjudicating Authority (NCLT) has the jurisdiction to recall its own order if it is obtained by playing fraud upon it – Rakesh Kumar Gupta Vs. Straight Edge Contracts Pvt. Ltd. Through its RP & Ors. – NCLAT New Delhi

NCLAT held that:
(i) Although, the petition u/s 9 was allowed on 20.07.2020 but the detailed order was not passed immediately thereafter, rather the application IA was disposed of on 14.10.2020 and at that time the AA decided to pass the detailed order within three days and thereafter, the detailed order was passed on 16.10.2020. NCLAT held that we do not want to comment on it but we do not appreciate this practice of the Adjudicating Authority for not passing the order immediately thereafter.
(ii) There is complete misappreciation of law on the part of the Adjudicating Authority in rejecting the application wherein it has also been submitted that the Adjudicating Authority has the jurisdiction to recall its own order if it is obtained by playing fraud upon it. In view of the aforesaid discussions, the present appeal has the merit, therefore, the same is allowed and the impugned order is set aside.

Adjudicating Authority (NCLT) has the jurisdiction to recall its own order if it is obtained by playing fraud upon it – Rakesh Kumar Gupta Vs. Straight Edge Contracts Pvt. Ltd. Through its RP & Ors. – NCLAT New Delhi Read Post »

Section 53 of IBC does not treat the related party as a different class – Hari Vittal Mission Vs. Ravi Sethia, RP of Suasth Health Care Foundation – NCLT Kolkata Bench

NCLT Kolkata Bench held that:
(i) The IBC treats related parties as a separate category for specified purpose so that they are excluded from the CoC and are as such not able to impede and interfere with the resolution process. (Section 21) and are disqualified from being resolution Applicants [Section 29(A)].
(ii) However, there is nothing to show that Section 53 treats them as a different class and excludes them altogether from the ambit of its reach.
(iii) None of the provisions whether its Regulation 38(1-A) (supra) or the Section 30(2) of IBC specifically negates the claim of a related party financial creditor who is not allowed a place in the CoC and is hence not allowed to vote.

Section 53 of IBC does not treat the related party as a different class – Hari Vittal Mission Vs. Ravi Sethia, RP of Suasth Health Care Foundation – NCLT Kolkata Bench Read Post »

A Del Credere Agent who has paid to Principal Supplier the outstanding amount due from Buyer(Corporate Debtor) is an Operational Creditor, an application u/s 7 is not maintainable – Madras Chemicals & Polymers Vs. Vijay Aqua Pipes Pvt. Ltd. – NCLAT Chennai

In this case, the Section 7 application filed by a Del Credere Agent was dismissed by NCLT, Chennai Bench. In appeal, NCLAT held that:
(i) The default which took place pertaining to the supply of goods comes within the definition of Operational Debt as per Section 5(21) of the Code, 2016 and hence, Section 9 of the Code, 2016 attracts in an unambiguous manner. Viewed in that perspective, the debt in the present case, cannot be termed as Financial Debt, as per Section 5 (8) of the Code, 2016, in the considered opinion of this Tribunal.
(ii) In the instant case, the default arose in relation to the supply of PVC Suspension Resin (Goods) to the Corporate Debtor and as such, the amount claimed to be in default by the Corporate Debtor as on 20.07.2019 amounting to Rs.1,23,14,186.94/-, is an Operational Debt and for the said Operational Debt, only an application under Section 9 of the Code will apply.
(iii) Upheld the decision of the NCLT.

A Del Credere Agent who has paid to Principal Supplier the outstanding amount due from Buyer(Corporate Debtor) is an Operational Creditor, an application u/s 7 is not maintainable – Madras Chemicals & Polymers Vs. Vijay Aqua Pipes Pvt. Ltd. – NCLAT Chennai Read Post »

Jaiprakash Associates Ltd. Vs. Jaypee Infratech Ltd. – NCLAT New Delhi

By the Impugned Order dated 07th March, 2023, the Adjudicating Authority issued direction for appropriation of amount of Rs. 750 Crores as per the Judgment of the Hon’ble Supreme Court, reported at (2021) ibclaw.in 63 SC.

NCLAT held that:
(i) In Company Appeal (AT) (Ins.) No. 302 of 2023, we have taken the view that direction of the Adjudicating Authority in Para 111 for payment of proportionate interest to the JIL on its receivables is unsustainable. Company Appeal (AT) (Ins.) No. 302 of 2023 thus deserves to be partly allowed setting aside the direction of the Adjudicating Authority in Para 111 to make payment of proportionate interest on the receivables by JIL. Other prayers of the Appellant in Company Appeal (AT) (Ins.) No. 302 of 2023 are rejected.
(ii) In Company Appeal (AT) (Ins.) No. 507 of 2023, finding of issues no. (a), (d) and (e) (as contained in Para 13 of the impugned order) deciding issues in favour of JAL are unsustainable. The JAL was not entitled to adjust/deduct aforesaid amounts from the amount receivable by JIL. We notice that the Adjudicating Authority in operative portion of the order in Paras 109 to 111 has ultimately not deducted or adjusted the aforesaid amounts from the amount receivable by JIL. The direction issued by the Adjudicating Authority in Para 109, 110 and 111 are affirmed except the direction to proportionate interest, as indicated above. Company Appeal (AT) (Ins.) No. 507 of 2023 is thus disposed of holding that findings of Adjudicating Authority on Issues No. (a), (b), (d) and (e) are unsustainable.

Jaiprakash Associates Ltd. Vs. Jaypee Infratech Ltd. – NCLAT New Delhi Read Post »

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