11A (2)

Section 11A(4) of IBC is clear and unambiguous and makes it clear that rule of precedence as provided in sub-section (1) to (3) does not apply to application(s) filed prior introduction of PIRP regime in the Code – Sudal Industries Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that section 11A (4) is clear and unambiguous and makes it clear that rule of precedence as provided in sub-section (1) to (3) does not apply to application(s) filed prior introduction of PIRP regime in the code. Further, this Bench finds the intent of legislature to allow the management of MSMEs to restore its control as contemplated under section 240A of the Code providing waiver of clause (c) to (h) of section 29A in case of MSMEs where the promoters are otherwise qualified u/s remaining clauses of section 29A of the Code. On the harmonious construction of provisions of section 240A and 54C, this Bench finds that while section 240A of the Code allows restoration of control back to the Promoters of MSME in resolution in precedence of other prospective resolution applicants, section 54C allows the promoters to keep it with them till the resolution plan proposed by MSME is not found acceptable by the financial creditors. Accordingly, this Bench feels it would in order to adjudicate application filed u/s 54C of the Code prior to adjudication of application filed u/s 7 of the Code, where such section 7 application filed prior to introduction of PIRP regime remain pending with the Adjudicating Authority.

Section 11A(4) of IBC is clear and unambiguous and makes it clear that rule of precedence as provided in sub-section (1) to (3) does not apply to application(s) filed prior introduction of PIRP regime in the Code – Sudal Industries Ltd. – NCLT Mumbai Bench Read Post »

Section 7, 9 or 10 CIRP application filed prior to IBC Amendment Ordinance dated 04.04.2021 will have precedence over Pre-Packaged Insolvency application under Section 54C of IBC – CHD Developers Ltd. Through Gaurav Mittal (MD) – NCLT Principal Bench

The Adjudicating Authority held that on a reading of the objects and reasons, one factor is clearly discernible that the Government wanted a hybrid method of Insolvency Resolution Process which includes creditors in control (Section 7, 9 or 10) as well as debtors in control (PPIRP). The Government opted for the hybrid method by bringing this Ordinance. Now the question is as to how the hybrid method should work? While bringing the amendment into force the Parliament in its wisdom perceived a situation where the Adjudicating Authority will be faced with the dilemma as to how the matter should be resolved if there are applications are filed pending under IBC & Chapter IIIA as the case may be. It is a situation of FC in control versus the CD in control. The pre-package application under Chapter III-A which has been filed on 12.07.2022, cannot take precedence over the Section 7 of IBC application which was filed on 21.10.2020, and remained pending though heard and reserved and re-heard on a number of occasions. The Section 7 IBC application filed and in the case will have to be given precedence over the pre-package application.

Section 7, 9 or 10 CIRP application filed prior to IBC Amendment Ordinance dated 04.04.2021 will have precedence over Pre-Packaged Insolvency application under Section 54C of IBC – CHD Developers Ltd. Through Gaurav Mittal (MD) – NCLT Principal Bench Read Post »

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