High Court-Bombay

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court

The Hon’ble High Court finds substance in the argument of the learned counsel for the petitioner that the action of the respondent in seeking to recover the outstanding tax due to it under the Maharashtra Village Panchayat Act, 1959 payable before the initiation of CIRP cannot be sustained. The petitioner who acquired the assets of Gupta Global Resources Pvt. Ltd. (Corporate Debtor) through the liquidation process in the year 2019 has received the sale certificate on 31.08.2019 and therefore, it is unflappable that the respondent can recover its outstanding dues payable before this date. The Scheme under the IBC, definitely do not permit such an action.

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court Read Post »

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court

Hon’ble Bombay High Court held that:

(i) The action of suspending the registration of the petitioner as RP on the basis of judgment of NCLAT, which was not challenged by the IP, is justified.
(ii) The period for which such suspension should operate is a matter within the realm of the Disciplinary Committee.
(iii) The Disciplinary Committee in the light of the jurisdiction conferred upon it by Section 220 of the Code is empowered to take into consideration all relevant aspects including the conduct of RP.

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court Read Post »

The continuation of existing income tax proceedings and the initiation of new income tax proceedings, as they relate to operations prior to the CIRP, are totally prohibited after the approval of the Resolution Plan – Uttam Value Steels Ltd. and Anr. Vs. Assistant Commissioner of Income Tax and Ors. – Bombay High Court

Hon’ble Bombay High Court (Division Bench) held that once a resolution plan is duly approved under Section 31(1) of the IBC, the debts as provided for in the resolution plan alone shall remain payable and such position shall be binding on, among others, the Central Government and various authorities, including tax authorities. All dues which are not part of the resolution plan would stand extinguished and no person would be entitled to initiate or continue any proceedings in respect of any claim for any such due. No proceedings in respect of any dues relating to the period prior to the approval of the resolution plan can be continued or initiated.

The continuation of existing income tax proceedings and the initiation of new income tax proceedings, as they relate to operations prior to the CIRP, are totally prohibited after the approval of the Resolution Plan – Uttam Value Steels Ltd. and Anr. Vs. Assistant Commissioner of Income Tax and Ors. – Bombay High Court Read Post »

Moratorium prohibition contained in clause (c) of Section 14(1) of IBC appears to be of wide amplitude than the bar to the suit or proceedings against the Corporate Debtor under clause (a) of Section 14(1) – Edelweiss Asset Reconstruction Company Ltd. Vs. Meeti Developers Pvt. Ltd. – Bombay High Court

Hon’ble Bombay High Court held that:

(i) The focus under clause (a) of Section 14(1) of IBC is on the suit or proceedings against the corporate debtor but under clause (c) any action to foreclose, recover or enforce any security interest created by the corporate debtor over its property is prohibited.
(ii) Though there is an element of continuity and action against the corporate debtor may fall both under clause (a) and (c), a situation, governed by clause (c), is not inconceivable where the corporate debtor may not be necessarily involved as a party.
(iii) The prohibition contained in clause (c) appears to be of wide amplitude than the bar to the suit or proceedings against the corporate debtor under clause (a).
(iv) The decisions in SSMP Industries Ltd Vs. Perkan Food Processors Pvt. Ltd. [2019] ibclaw.in 07 HC, Power Grid Corporation of India vs. Jyoti Structures Ltd. (2017) ibclaw.in 12 HC and Trading Engineers International Ltd. Vs. U.P. Power Transmission Corp. Ltd. (2022) ibclaw.in 215 HC primarily deal with the prohibition contained in clause (a) of section 14(1) of the IBC. These decisions did not deal with a situation covered by clause (c) of section 14(1).

Moratorium prohibition contained in clause (c) of Section 14(1) of IBC appears to be of wide amplitude than the bar to the suit or proceedings against the Corporate Debtor under clause (a) of Section 14(1) – Edelweiss Asset Reconstruction Company Ltd. Vs. Meeti Developers Pvt. Ltd. – Bombay High Court Read Post »

Whether IBBI Disciplinary Committee constituted under Section 220 of the IBC can consist of a Single Whole-Time Member – Rohit J. Vora Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court

Division Bench of Hon’ble Bombay High Court held that:

(i) The proviso to Section 220(1) of IBC merely requires that the members of the Disciplinary Committee should be whole-time members of the IBBI. The said proviso does not seek to provide the number of members who should constitute the Disciplinary Committee.
(ii) While Section 220(1) of the Code deals with constitution of a Disciplinary Committee with the requirement that its members ought to be whole-time members of the IBBI, the constitution of the Disciplinary Committee as regards the number of its members is provided by Clause 2(1)(c) of the Regulations of 2017.
(iii) Regulation 2(1)(c) of the IBBI (Inspection and Investigation Regulations) Regulations, 2017 cannot be said that this clause travels beyond what has been provided by Section 220(1).
(iv) It would be permissible to constitute a Disciplinary Committee consisting of either a single whole-time member or more than one whole-time member of the IBBI.

Whether IBBI Disciplinary Committee constituted under Section 220 of the IBC can consist of a Single Whole-Time Member – Rohit J. Vora Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court Read Post »

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court

The Hon’ble Bombay High Court (Division Bench) did not find that Clause 23A of the Schedule of IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 travel beyond what has been empowered to be done under the Code.

The Bench also considered the office noting placed on record which indicates that DGM (IBBI) was directed to undertake investigation and held that it cannot be said that the Investigating Authority in the absence of any order in writing proceeded to conduct an investigation in terms of Section 218(1) of the Code.

The Court referring the decision in CA V. Venkata Sivakumar Vs. IBBI and Ors. (2024) ibclaw.in 59 HC did not find that the suspension of AFA pending consideration of the show cause notices is in any manner contrary to law or unwarranted in the facts of the present case.

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court Read Post »

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