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No application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period – Office Beanz Pvt. Ltd. – NCLAT New Delhi

The mere fact that the observation of the Hon’ble Supreme Court in Ramesh Kymal Vs. Siemens Gamesa Renewable Power Pvt. Ltd. (2021) ibclaw.in 08 SC that debt owed by the Corporate Debtor is not extinguished is the law declared by the Hon’ble Supreme Court, but their being clear prohibition for filing an application under Section 7, 9 and 10, for default occurring in 10A period there is apparent case.

No application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period – Office Beanz Pvt. Ltd. – NCLAT New Delhi Read Post »

Can pendency of SARFAESI proceedings be taken into cognisance by Adjudicating Authority in dismissing Section 10 application under IBC – Agroha Paper Industries Pvt. Ltd. Vs. Bank of Maharashtra – NCLAT New Delhi

Hon’ble NCLAT held that there is no quarrel over the fact that Section 10 vests rights on the Corporate Debtor to resolve their insolvency. However, one cannot lose sight of the fact that this protective umbrella over the assets of the Corporate Debtor is not misused or abused in a manner so as to become a tool for deriving undue advantage at the cost of insolvency resolution which objective unequivocally resonates in the preambular aspirations of the IBC.

Can pendency of SARFAESI proceedings be taken into cognisance by Adjudicating Authority in dismissing Section 10 application under IBC – Agroha Paper Industries Pvt. Ltd. Vs. Bank of Maharashtra – NCLAT New Delhi Read Post »

Whether once CIRP has been stayed, Resolution Professional has to handover the charge of Corporate Debtor to Ex-management? – Mr. Mukesh Kumar Jain v. Navin Kumar Upadhyay and Anr. – NCLAT New Delhi

In this important judgment on stayed of CIRP, Hon’ble NCLAT held that:
(i) The judgment in Ashok Kumar Tyagi v. UCO Bank (2022) ibclaw.in 943 NCLAT does not lay down any proposition that when order of initiating CIRP has been stayed, the result would be to handover the Corporate Debtor to the ex-management by Resolution Professional.
(ii) Any such result of stay of the CIRP shall be disastrous since if the management against whom the CIRP has been initiated is handed over the charge, it is prone to misuse the assets and the assets shall be diminished, which may adversely affect the creditors of the Corporate Debtor.
(iii) In view of the stay of the CIRP, it is true that the Resolution Professional cannot take any further steps in the CIRP of the Corporate Debtor and has to stay his hand from proceeding any further in the CIRP and await the order of the Appellate Court.
(iv) The direction to the Resolution Professional in the impugned order to handover the Corporate Debtor to the ex-management is wholly unjustified and has to be set aside.

Whether once CIRP has been stayed, Resolution Professional has to handover the charge of Corporate Debtor to Ex-management? – Mr. Mukesh Kumar Jain v. Navin Kumar Upadhyay and Anr. – NCLAT New Delhi Read Post »

CIRP application filed u/s 10 of IBC to avoid Income Tax liability is not maintainable – Jayam Vyapaar Pvt. Ltd. – NCLT Kolkata Bench

In CIRP Sec. 10 application, NCLT Kolkata Bench observes that:
(i) The application appears to have been filed basically to avoid Income Tax liability, particularly when there is a finding that the Income has escaped tax due to money laundering which could lead to recovery from Directors of the company in terms of Section 179 of the Income Tax Act.
(ii) this application is not for the resolution of the corporate applicant’s insolvency but to scuttle the efforts of the Income tax department in their pursuit of recovery of the dues and it is a settled position of law that this Adjudicating Authority is not a recovery Tribunal.
(iii) The corporate applicant with a fraudulent and malicious intention has filed this application under Section 10 of IBC. Hence, we are of the view that it is a fit case to invoke Section 65 of IBC.
(iv) Imposes a penalty of Rs. One Lakh only upon the Corporate Applicant.

CIRP application filed u/s 10 of IBC to avoid Income Tax liability is not maintainable – Jayam Vyapaar Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Whether a Stock Broker Company registered with SEBI is a Financial Service Provider under IBC? – M/s Bezel Stockbrokers Pvt. Ltd. Vs. Security Exchange Board of India – NCLT New Delhi Bench Court-II

NCLT New Delhi Bench Court-II held that:
(i) On perusal of the definitions u/s 3(16), 3(15), 3(37) of IBC and Section 2 of the Securities Contracts (Regulation) Act, 1956, it is observed that Shares, Scrips, Stocks, Bonds, Debentures, Debenture Stocks etc., are included under the term “Securities”. Hence, the same can also be treated as a “Financial Product” as defined under Section 3(15) of IBC, 2016.
(ii) Since Corporate Applicant, being a stock broker, was dealing in the activities of buying, selling, or dealing in securities etc., which in terms of Section 3(15) of IBC 2016 are a “Financial Product” belonging to another person. Hence, in terms of Section 3(16) of IBC 2016, the Corporate Applicant was providing “Financial Service” or in other words, it was a “Financial Service Provider”.
(iii) Stock Broker Company is a “Financial Service Provider”. Since the Corporate Applicant Company being a “Financial Service Provider” is outside the purview of the definition of a “Corporate Person” as defined under Section 3(7) of IBC 2016 and therefore, is not a “Corporate Debtor” in terms of Section 3(8) of IBC, 2016, the instant application is not maintainable.

Whether a Stock Broker Company registered with SEBI is a Financial Service Provider under IBC? – M/s Bezel Stockbrokers Pvt. Ltd. Vs. Security Exchange Board of India – NCLT New Delhi Bench Court-II Read Post »

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