29/03/2023

Transactions of giving huge amount without any security interest or bank guarantee and subsequently writing off the same from the book can only be termed as fraudulent transactions – Shri Baiju Trading and Investment Pvt. Ltd. Vs. Mr. Arihant Nenawati (Liquidator for Royal Refinery Pvt. Ltd.) & Ors. – NCLAT New Delhi

NCLAT observes that in 2019 such huge loan was all of a sudden written off by the Respondent Nos. 2 & 3 from the books of the Corporate Debtor and evidently the Appellant is the principal/sole beneficiary. The plea of the Appellant made before us that it is a Corporate Debtor who has written off and not by the Appellant and therefore the Appellant should not be held liable for fraudulent transactions under Section 66 is not convincing at all. It is a matter of common prudence that if the money is written off from the books of the Corporate Debtor, there is hardly any chance for the management/ successor/ Resolution Professional to recover the same from the Appellant. There is no explanation which we can take into account either from the submissions of the Appellant or Respondent Nos. 2 & 3 as to why such write off was necessary and circumstances which led to this write off. Such transactions of giving huge amount to unconnected/unrelated parties and apparently without any security interest or bank guarantee as collateral security in favour of the Corporate Debtor and subsequently writing off the same from the book can only be termed nothing else but as fraudulent transactions done with the intent to defraud the creditors of the Corporate Debtor. From the averments as well from the records made available, this Appellate Tribunal tend to agree with the Adjudicating Authority that the nature of the transactions are covered squarely under Section 66 of the Code, 2016.

Transactions of giving huge amount without any security interest or bank guarantee and subsequently writing off the same from the book can only be termed as fraudulent transactions – Shri Baiju Trading and Investment Pvt. Ltd. Vs. Mr. Arihant Nenawati (Liquidator for Royal Refinery Pvt. Ltd.) & Ors. – NCLAT New Delhi Read Post »

Whether during the pendency of the proceedings under the IBC, the criminal prosecution initiated under the Negotiable Instruments Act, 1881 against Directors of a Corporate Debtor can continue simultaneously or not? – Sachin Goyal and another Vs. M/s Rajasthan Trading Co. and another – Punjab & Haryana High Court

Hon’ble High Court held that what flows from the law laid down by a Three Judge Bench of the Hon’ble Supreme Court in Ajay Kumar Radheyshyam Goenka vs. Tourism Finance Corporation of India Ltd. (2023) ibclaw.in 30 SC is that whereas recovery proceedings barred under Section 14 of the IBC are primarily civil in nature, the proceedings under Section 138 of the NI Act are criminal in nature, and both have a different set of purpose. Furthermore, the complainant approaches the Criminal Court not only for recovery of the legally enforceable debt but also for taking penal action under Section 138 of the NI Act for the offence already committed by the accused by not making the payment of the cheque amount despite the receipt of the statutory notice. Therefore, by operation of the provisions of the IBC, the criminal prosecution initiated against the natural persons under Section 138 read with 141 of the NI Act would not stand terminated.

Whether during the pendency of the proceedings under the IBC, the criminal prosecution initiated under the Negotiable Instruments Act, 1881 against Directors of a Corporate Debtor can continue simultaneously or not? – Sachin Goyal and another Vs. M/s Rajasthan Trading Co. and another – Punjab & Haryana High Court Read Post »

The IBC does not contemplate multiplicity of applications against the same Personal Guarantor, when the Insolvency Resolution Process commences against a Personal Guarantor, claims of all Creditors are taken care – Union Bank of India Vs. Mr. P.K. Balasubramanian – NCLAT Chennai

Issue in this case that Section 95 Application was filed by Appellant/Union Bank of India three days prior to the date when the State Bank of India had filed their Application and therefore their Application ought to have been admitted first.
NCLAT held that indeed, the date of filing of the application under Section 95 is what is to be taken into account and not the date when the application is numbered. There is no appreciable evidence on record to state that the said application was defective. When an Insolvency Resolution Process commences against the Personal Guarantor, all Creditors of the Personal Guarantor are taken care of in the proceedings under Chapter-III. The Code does not contemplate multiplicity of applications against the same Personal Guarantor. This Tribunal is of the earnest view that when the Insolvency Resolution Process commences against a Personal Guarantor, Claims of all Creditors are taken care of under the scheme of the I & B Code, 2016.

The IBC does not contemplate multiplicity of applications against the same Personal Guarantor, when the Insolvency Resolution Process commences against a Personal Guarantor, claims of all Creditors are taken care – Union Bank of India Vs. Mr. P.K. Balasubramanian – NCLAT Chennai Read Post »

As per the terms of IBC 2016, for any work done prior to the CIRP period and for amounts pending in relation to the same, the Creditor is required to file its claim – Sree Ganesh Constructions Vs. IVRCL Ltd. Represented by Mr. Suntanu Sinha Liquidator – NCLAT Chennai

In the instant case, the Appellant had filed the Form C for admission of the claim in relation to the pending amount 26.08.2019, one day after the last date for submission of the claim. The Liquidator had sent an email that the claim submitted by the Appellant cannot be considered by the Liquidator as it is filed after the expiry of the last date for submission of the claim. The application I.A. No. 454 of 2020 pertains to release of the pending amount, and not in relation to the admission of the claim, filed by the Appellant for the condonation of the delay. Therefore, this Tribunal is of the considered view that there are no substantial grounds to interfere with the impugned order dated 27.08.2021, whereby and whereunder, the Adjudicating Authority had directed the Liquidator to admit the Appellant’s claim and make the payment as per Section 53 of IBC, 2016.

As per the terms of IBC 2016, for any work done prior to the CIRP period and for amounts pending in relation to the same, the Creditor is required to file its claim – Sree Ganesh Constructions Vs. IVRCL Ltd. Represented by Mr. Suntanu Sinha Liquidator – NCLAT Chennai Read Post »

Under Section 61 of IBC, the power to condone delay vested with NCLAT is 15 days only, when the delay is beyond 15 days, NCLAT cannot exercise its jurisdiction to condone delay – IL & FS Financial Services Ltd. Vs. Empower India Ltd. – NCLAT New Delhi

NCLAT observed that in the present case impugned order was passed on 14.10.2022. 30 days’ limitation was till 14.11.2022 and giving the benefit of 13 days in uploading the impugned order during which the certified copy of the order was under preparation, the appeal could have been filed on 27.11.2022. This appeal has been e-filed on 14.12.2022 and physical copy was filed on 15.12.2022. The appeal has been filed beyond 15 days’ delay. When we look into the judgment of NCLAT Chennai Bench in M.K. Resely and Ors. Vs. Union Bank of India and Ors. (2022) ibclaw.in 944 NCLAT, it appears that Tribunal by giving benefit of Section 14 of the Limitation Act, has in a liberal manner, treated the appeal within time. The present is not a case where there is any case for claiming benefit of Section 14 of the Limitation Act. Hence, the said judgment has no application in the present case.

Under Section 61 of IBC, the power to condone delay vested with NCLAT is 15 days only, when the delay is beyond 15 days, NCLAT cannot exercise its jurisdiction to condone delay – IL & FS Financial Services Ltd. Vs. Empower India Ltd. – NCLAT New Delhi Read Post »

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