High Court-Telangana

Can a single lender settle the dues under RBI Framework after admission of insolvency petition? | Can an application for withdrawal from CIRP be entertained after the CoC approves the Resolution Plan? | Is writ petition maintainable even the efficacious statutory remedy under section 60(5) of the IBC available? – Mandava Holdings Pvt. Ltd. Vs. PTC India Financial Services Ltd. – Telangana High Court

The Hon’ble Telangana High Court held that:
(i) The IBC does not provide for such a scenario that the borrowing entity/ Corporate Debtor can negotiate with only one of the creditors in the CoC to the exclusion of the other creditors.
(ii) The RBI Framework recognizes the precedence of the relevant statute (the IBC in this case) and that any settlement must be done within the statutory framework of the IBC.
(iii) The writ petition is also not maintainable in view of the efficacious statutory remedy under section 60(5) of the IBC which is a comprehensive Code envisaging all possible scenarios and modes of redress within the four corners of the IBC.

Can a single lender settle the dues under RBI Framework after admission of insolvency petition? | Can an application for withdrawal from CIRP be entertained after the CoC approves the Resolution Plan? | Is writ petition maintainable even the efficacious statutory remedy under section 60(5) of the IBC available? – Mandava Holdings Pvt. Ltd. Vs. PTC India Financial Services Ltd. – Telangana High Court Read Post »

The liability of persons mentioned in Section 141(2) of Negotiable Instruments Act, 1881 is not on account of any legal fiction but on account of the specific part played-consent and connivance or negligence – Dr. Srinubabu Gedela and Ors. Vs. The State of Telangana – Telangana High Court

Hon’ble Telangana High Court held that Section 141(2) of the NI Act provides that a Director, Manager, Secretary or other officer, though not in charge of the conduct of the business of the company, will be liable if the offence has been committed with the consent of connivance or if the offence was a result of any negligence on his part. The liability of persons mentioned in sub-section (2) is not on account of any legal fiction but on account of the specific part played-consent and connivance or negligence. If a person is to be made liable under sub-section (2) of Section 141 of the NI Act, then it is necessary to aver consent and connivance or negligence on his part.

The liability of persons mentioned in Section 141(2) of Negotiable Instruments Act, 1881 is not on account of any legal fiction but on account of the specific part played-consent and connivance or negligence – Dr. Srinubabu Gedela and Ors. Vs. The State of Telangana – Telangana High Court Read Post »

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court

The batch of 3 Writ Appeals were preferred by the suspended Board of Directors of M/s. Ind Bharath Power (Madras) Limited challenging the order passed by the Ld. Single Judge Bench upholding the decision/order of the First Level Committee of REC Limited in declaring the Appellants as wilful defaulters.

The Appellants alleged that the First Level Committee has acted in contrary to the procedure laid down in the RBI Master Circular dated 01.07.2015, as firstly the Appellants have not been informed about the constitution of First Level Committee and, secondly, there has been delegation of power as the decision of the First Level Committee was communicated to the Appellants by a member of the Committee.
Thereupon, the Sr. Advocate for Appellants relied upon the landmark judgment of ‘Jah Developers’ highlighting that declaration of Appellants as wilful defaulter is a direct violation of fundamental rights.

The Sr. Advocate representing the Respondent outrightly highlighted that the decision of the First Level Committee is well within the guidelines of the RBI Master Circular and that the order of the First Level Committee would attain finality only when it is confirmed by the review committee. Thus, the Appellants have preferred the Writ Appeal at a very premature stage and hence deserves no indulgence by the Hon’ble Division Bench of the Telangana High Court presided by the Chief Justice.

The Hon’ble Court after hearing the submissions of the parties and considering the guidelines of RBI Master Circular asserted that the Master Circular does not contain any requirement that the order passed by the First Level Committee should disclose the constitution of the First Level Committee and further held that till the time the provisional order of First Level Committee is not confirmed by the review committee, it is not possible to infer that any rights of the Appellants have been violated. Moreover, the Hon’ble Court also held that the case of Jah Developers is of no assistance in facts and circumstances of the case at hand. Thereby, the Division Bench upheld the order of the Ld. Single Bench and while disposing off the Appeals, granted liberty to the Appellants to approach the review committee within a period of 3 weeks from the date of receipt of the order.

RBI Master Circular on Wilful Defaulters does not contain any requirement that the order passed by First Level Committee should disclose the constitution of the First Level Committee | Decision of First Level Committee does not attain finality till it is confirmed by Review Committee – Mr. Dumpala Madhusudhana Reddy Vs. REC Ltd. – Telangana High Court Read Post »

No stamp duty would attract on sale of property through auction of a Corporate Debtor during liquidation process as per the provisions of IBC – M/s. Anirudh Agro Farms Pvt. Ltd. Vs. The State of Telangana – Telangana High Court

In this case, Liquidator issued a certificate of sale in favour of the Successful Purchaser under Section 35(1)(f) of IBC and handed over the auctioned property. Thereafter, liquidator issued a letter to the Sub-Registrarto record and file the certificate of sale as the appellant was the successful e-auction purchaser of the auctioned property. However, Sub-Registrar declined to do the needful on the ground that there is no practice of filing certificate of sale of this nature in his office and also on the ground that such filing would attract stamp duty at par with sale under Article 47-A of the Indian Stamp Act, 1899.

Division Bench of Hon’ble High Court of Telangana held that in Madhurambal (SC) special leave petition was filed before the Supreme Court. While dismissing the special leave petition, Supreme Court has held that law on this point is well settled that a sale certificate is not an instrument of the kind mentioned in clause (b) of Section 17 of the Registration Act; the authorized officer of the bank under the SARFAESI Act, 2002 should hand over the duly validated sale certificate to the auction purchaser with a copy forwarded to the registering authority to be filed in book No.1 as per Section 89 of the Registration Act. Supreme Court has further opined that once a direction is issued for the duly validated certificate to be issued to the auction purchaser with a copy forwarded to the registering authority to be filed in book No.1 as per Section 89 of the Registration Act, it has the same effect as registration and obviates the requirement of any further action. Supreme Court has observed that the authorities should stop filing unnecessary special leave petitions on this issue.

No stamp duty would attract on sale of property through auction of a Corporate Debtor during liquidation process as per the provisions of IBC – M/s. Anirudh Agro Farms Pvt. Ltd. Vs. The State of Telangana – Telangana High Court Read Post »

M.Seshavatharam Vs. National Company Law Tribunal-I Hyderabad Bench – Telangana High Court

Hon’ble High Court held that from the Section 60 of IBC, it is seen that as per the aforesaid provision, NCLT shall have jurisdiction to entertain or dispose of any application or proceeding by or against the corporate debtor or corporate person; any claim made by or against the corporate debtor or corporate person, including claims by or against any of its subsidiaries situated in India; and any question of priorities or any question of law or facts arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under IBC. In case the application under Section 7 of IBC is filed beyond the period of limitation of three years from the date of default and the financial creditor furnishes the required information relating to acknowledgement of debt in writing by the corporate debtor before the adjudicating authority, with such acknowledgement having taken place within the initial period of three years from the date of default, a fresh period of limitation commences and the application can be entertained if filed within this extended period.

M.Seshavatharam Vs. National Company Law Tribunal-I Hyderabad Bench – Telangana High Court Read Post »

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