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Whether set-off/adjustment of demand with refund by Income Tax Dept. during the intervening period when CIRP timeline period has expired but Liquidation Order u/s 33 of IBC has not yet been passed, amounted to violation of Moratorium under Section 14 of the IBC? – Mr. Devarajan Raman Liquidator of Kotak Urja Pvt. Ltd. Vs. Principal Commissioner Income Tax and Ors. – NCLAT New Delhi

This judgment answered the following issues:

(i) Can Income Tax Dept. set-off/adjust tax dues with refund during the intervening period when CIRP timeline period had expired but the liquidation order had not yet been passed by the Adjudicating Authority?

(ii) Can a Secured Creditor realise secured assets in terms of Section 52 of the IBC after expiry of CIRP period under Section 12 of the IBC and before liquidation order under Section 33 is passed?
(iii) Is Income Tax Department being a Government Authority a secured creditor and entitled to realise security interest?

Whether set-off/adjustment of demand with refund by Income Tax Dept. during the intervening period when CIRP timeline period has expired but Liquidation Order u/s 33 of IBC has not yet been passed, amounted to violation of Moratorium under Section 14 of the IBC? – Mr. Devarajan Raman Liquidator of Kotak Urja Pvt. Ltd. Vs. Principal Commissioner Income Tax and Ors. – NCLAT New Delhi Read Post »

Resolution Professional is ‘Occupier’ of Corporate Debtor’s factory as defined under Section 2(n) of the Factories Act, 1948 | For the violation or omission in the factory premises, Resolution Professional is responsible for the proceedings if any, initiated against Resolution Professional under Factories Act in his capacity as Occupier | The said proceedings will not be covered under Sec. 14 or 233 of IBC – Subrata Monindranath Maity v. The State – Madras High Court

In this landmark judgment, Hon’ble Madras High Court has held that:
(i) The protection to the resolution professional given under Section 233 of IBC is obviously only in respect of act done or intended to be done in good faith under the code. The failure or omission to provide safety measures in the factory cannot be stretched to inaction.
(ii) The resolution professional is the occupier of the factory (as defined under Section 2(n) of the Factories Act, 1948) and he cannot abdicate his duties and responsibility of providing necessary safety measures in the factory as mandated in the Factories Act.
(iii) The expression used in section 17 of the Code explicitly say that the resolution professional is the person who is vested with absolute control of the Corporate Debtor company. While so, for the violation or omission in the factory premises, Resolution Professional is responsible for the Proceedings if any, initiated against Resolution Professional under the Factories Act in his capacity as occupier. The said proceedings will not be covered under section 14 or 233 of the Code.

Resolution Professional is ‘Occupier’ of Corporate Debtor’s factory as defined under Section 2(n) of the Factories Act, 1948 | For the violation or omission in the factory premises, Resolution Professional is responsible for the proceedings if any, initiated against Resolution Professional under Factories Act in his capacity as Occupier | The said proceedings will not be covered under Sec. 14 or 233 of IBC – Subrata Monindranath Maity v. The State – Madras High Court Read Post »

Whether a Resolution Professional is a public servant or not and thus, would be liable for the offence punishable under Prevention of Corruption Act? – Dr. Arun Mohan v. Central Bureau of Investigation – Delhi High Court

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Whether a Resolution Professional is a public servant or not and thus, would be liable for the offence punishable under Prevention of Corruption Act? – Dr. Arun Mohan v. Central Bureau of Investigation – Delhi High Court Read Post »

NCLT directs Police to not take any coercive action against the Erstwhile Resolution Professional, Albus India Ltd. – Sandeep Kumar Bhatt Erstwhile RP Albus India Ltd. Vs. Senior Superintendent of Police Raipur – NCLT New Delhi Bench Court-VI

The present IA has been filed by Erstwhile RP seeking issuance to necessary directions to Suspended Directors & and Local Police. The Suspended Directors have filed an FIR with Local Police against successful resolution applicant wherein serious allegations have been made against the Erstwhile Resolution Professional Albus India Ltd. The Local Police has issued notices against the Applicant seeking information related to the CIRP.
NCLT New Delhi Bench Court-VI held that:
(i) Section 233 of the IBC, 2016 grants immunity to the Resolution Professional for actions taken in good faith. Further, jurisdiction with respect to offences committed under the IBC, 2016 is with Special Courts established in terms of Section 236 of the IBC, 2016. A proper procedure is laid down under the Code for filing complaint against the Resolution Professional. Chapter VI of the Code dealing with Inspection and Investigation lays down the proper procedure to file a complaint against the Resolution Professional. Section 217 clearly provides that any person aggrieved by the functioning of the Resolution Professional may file a complaint to the Board(IBBI). The IBBI is empowered to investigate such complaints.
(ii) In the instant matter, the Suspended Directors (R1-3) failed to file any such complaint with IBBI or even with this Adjudicating Authority and directly approached the police.
(iii) In light of the NCLT, Chennai Bench in the matter of Subrata Monindranath Maity (Bhatia Coke and Energy Ltd) Vs. Surender Singh Bhatia & 4 Ors. (2021) ibclaw.in 57 NCLT, we direct the Local Police (R6 & 7) to not take any coercive action against the Applicant. Further, the Suspended Directors (R1-3) are directed to approach the IBBI for any complaints against the Applicant.

NCLT directs Police to not take any coercive action against the Erstwhile Resolution Professional, Albus India Ltd. – Sandeep Kumar Bhatt Erstwhile RP Albus India Ltd. Vs. Senior Superintendent of Police Raipur – NCLT New Delhi Bench Court-VI Read Post »

A Resolution Professional will come within the meaning of ‘Public Servant’ under Section 2(c) of the Prevention of Corruption Act, 1988 and Section 233 of IBC does not protect where he has been apprehended red-handed with the bribe amount – Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad – Jharkhand High Court

In this case, a complaint against Resolution Professional was made that Resolution Professional/Petitioner had demanded a bribe of Rs.2,00,000/- per month for showing leniency in the insolvency resolution process for extending CIRP process from 09 months to 02 years and also demanded Rs.20,00,000/- for obtaining favourable forensic audit/valuation report from his chosen Forensic Auditor/Valuer and for helping in re-possession of plant/company.
The central question in the instant petition is whether Resolution Professional as defined under Section 22 of the IBC will come within the meaning of ‘Public Servant’ under Section 2 (c) of the Prevention of Corruption Act, 1988?.

Hon’ble High Court that: (i) functions and obligations of Insolvency Professionals are as set out under Section 208 of IBC which are public in nature. These functions intimately relate to matters relating to loans extended by the Banks which is investments from public at large and therefore will come within the meaning of public duty as provided under Section 2-c(viii) of the Prevention of Corruption Act, 1988. (ii) The appointment of Resolution Professional is made during the resolution process before the Company Law Tribunal with its approval, he will be a public servant under Section 2(c)(v) of the Prevention of Corruption Act, 1988. (iii) Section 233 of IBC gives protection to a resolution professional from criminal prosecution for acts in good faith, and not where he has been apprehended red-handed with the bribe amount. (iv) Section 232 does not exclude operation of Prevention of Corruption Act, 1988.

A Resolution Professional will come within the meaning of ‘Public Servant’ under Section 2(c) of the Prevention of Corruption Act, 1988 and Section 233 of IBC does not protect where he has been apprehended red-handed with the bribe amount – Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad – Jharkhand High Court Read Post »

As per Section 233 of the IBC, the liquidator is protected against any coercive action provided his act during CIRP is a bonafide – Liquidator of Varia Engineering work Ltd. Vs. Superintendent of Police of CBI – NCLT Ahmedabad Bench

The Liquidator of Varia Engineering work Ltd.(CD) filed an application directing the Superintendent of Police of CBI(respondent) not to proceed against him for the act which he has done during the CIRP period as the Liquidator.
The Adjudicating Authority held that as per Section 233 of the IBC, the liquidator is protected against any coercive action provided his act during CIRP is a bonafide. The protection is available to the liquidator. It is also made clear that IBBI is the only Authority to look into and inquire into any allegation against the liquidator when he acted during the discharge of his duty as the Liquidator.

As per Section 233 of the IBC, the liquidator is protected against any coercive action provided his act during CIRP is a bonafide – Liquidator of Varia Engineering work Ltd. Vs. Superintendent of Police of CBI – NCLT Ahmedabad Bench Read Post »

SC directs immediate release of the Interim Resolution Professional of Jaypee Infratech Ltd. who is presently in custody of UP Police – Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors. – Supreme Court

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SC directs immediate release of the Interim Resolution Professional of Jaypee Infratech Ltd. who is presently in custody of UP Police – Jaypee Kensington Boulevard Apartments Welfare Association & Ors. Vs. NBCC (India) Ltd. & Ors. – Supreme Court Read Post »

A complaint by the former director with the SHO, Police Station against Resolution Professional would not be maintainable and competent as the complaint is not lodged by the IBBI. The jurisdiction would vest with Investigation Officer only when a complaint is filed by IBBI – M/s Alchemist Asset Reconstruction Co. Ltd Vs. M/s Hotel Gaudavan Pvt. Ltd. – NCLT Mumbai Bench

NCLT held that if, there is any complaint against the Insolvency Professional then the IBBI is competent to constitute a disciplinary committee and have the same investigated from an Investigating Authority as per the provision of section 220 of the Code. If, after investigation IBBI finds that a criminal case has been made out against the Insolvency Resolution Professional then the IBBI has to file a complaint in respect of the offences committed by him. It is with the aforesaid object that protection to action taken by the IRP in good faith has been accorded by section 233 of the Code. There is also complete bar of trial of offences in the absence of filing of a complaint by the IBBI as is evident from a perusal of section 236(1)(2) of the code. Therefore, a complaint by the former director with the SHO, Police Station would not be maintainable and competent as the complaint is not lodged by the IBBI. The jurisdiction would vest with Investigation Officer only when a complaint is filed by IBBI.

A complaint by the former director with the SHO, Police Station against Resolution Professional would not be maintainable and competent as the complaint is not lodged by the IBBI. The jurisdiction would vest with Investigation Officer only when a complaint is filed by IBBI – M/s Alchemist Asset Reconstruction Co. Ltd Vs. M/s Hotel Gaudavan Pvt. Ltd. – NCLT Mumbai Bench Read Post »

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