25 (2) (e)

Important judgment on verification of claim, seeking additional information and rejection of belated claim during corporate insolvency (CIRP) under IBC – Sumat Kumar Gupta, RP, M/s Vallabh Textiles Company Ltd. Vs. M/s Vardhman Industries Ltd. – NCLAT New Delhi

Regulation 12(1) is subject to Regulation 12(2) as expressed in the opening sentence of Rule 12(1). CIRP Regulation 12 does not lay down any specific embargo on a creditor who on having failed to satisfy the Resolution Professional with respect to the claims submitted by him under Regulation 12(1) from refiling his claim under Regulation 12(2) as long as it is done on or before the ninetieth day of the insolvency commencement date. CIRP Regulations need to be viewed in a purposive manner so as to advance the cause of insolvency resolution while safeguarding the interest of all the stakeholders. The Resolution Professional while examining claims is therefore expected to act in a manner which inspires confidence in the Financial Creditor so as to ensure the credibility of the insolvency process. The Resolution Professional by summarily rejecting the belated claims at his own level without presenting the complete facts to the CoC has misconstrued his role, duties, and responsibilities.

Important judgment on verification of claim, seeking additional information and rejection of belated claim during corporate insolvency (CIRP) under IBC – Sumat Kumar Gupta, RP, M/s Vallabh Textiles Company Ltd. Vs. M/s Vardhman Industries Ltd. – NCLAT New Delhi Read Post »

Claim against Corporate Guarantee without invoking it – M/s Edelweiss Asset Reconstruction Company Ltd. Vs. V Mahesh IRP M/s. Vasan Health Care Pvt. Ltd. – NCLAT Chennai

NCLAT held that the claim defined in Section 3(6) means ‘a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured.’ In this regard, a beneficial reference is drawn from the decision of this Tribunal in the matter of Export Import Bank of India v RP of JEKPL Pvt. Ltd. [2018] ibclaw.in 52 NCLAT. We are in-agreement with the above decision. The Resolution Professional is required to maintain an updated list of all claims. The maturity of a claim or default of debt, are not the guiding factors to be noticed for collating or updating the claims. After analyzed the points as discussed above, in (a) (b) and (c), this Tribunal comes to a resultant conclusion that the Corporate Guarantee was made available with IRP and Adjudicating Authority. Thus, the IRP and the Adjudicating Authority cannot take the unsustainable and unsound technical stand as discussed in Point ‘b and ‘c’ above while rejecting the claim.

Claim against Corporate Guarantee without invoking it – M/s Edelweiss Asset Reconstruction Company Ltd. Vs. V Mahesh IRP M/s. Vasan Health Care Pvt. Ltd. – NCLAT Chennai Read Post »

If the Authorized Representative shall have no role in receipt or verification of claims of creditors of the class, he represents, then the association or the allottees who come under the class of creditors, shall also have no role in receipts or verification of claims of creditors – IDBI Trusteeship Services Ltd. Vs. Saha Infratech Pvt. Ltd., Through Shiv Nandan Sharma IRP – NCLT New Delhi Bench Court-II

AA held that as per CIRP Regulation 13(2), the IRP or the RP shall make a list of creditors available for inspection by the persons, who have submitted proofs of claim or by the members, partners, directors and guarantors of the corporate debtor. It is further seen that as per CIRP Regulation 14, the IRP or the RP is also authorized under the regulation to determine the amount of claim or revise the amount of claim admitted including the estimates of the claims made under Sub Regulation 1, when she/he comes across additional information warranting such revision. A bare perusal of Regulation 16A Sub Regulation 5 of the CIRP Regulations shows that although the IRP or the RP shall provide an updated list of creditors in each class to the respective authorised representative as and when, the list is updated but the authorized representative shall have no role in receipt or verification of claims of creditors of the class he represents. Since, the authorized representative is appointed under Section 21(6A) of the IBC, 2016 and his rights and duties are defined under Section 25A of IBC, 2016 referred to Supra, we observe that under Section 21(6A)(b), the authorized representative is appointed, if the class of creditors exceeds the number specified under the law.
It referred to the CIRP Regulation 16A(5), which shows that the authorized representative shall have no role in receipt or verification of claims of creditors of the class, he represents. If the authorized representative shall have no role in receipt or verification of claims of creditors of the class, he represents, then the association or the allottees who come under the class of creditors, in our considered view, shall also have no role in receipts or verification of claims of creditors rather it is the IRP or the RP, who is to decide the claims submitted by the creditors.

If the Authorized Representative shall have no role in receipt or verification of claims of creditors of the class, he represents, then the association or the allottees who come under the class of creditors, shall also have no role in receipts or verification of claims of creditors – IDBI Trusteeship Services Ltd. Vs. Saha Infratech Pvt. Ltd., Through Shiv Nandan Sharma IRP – NCLT New Delhi Bench Court-II Read Post »

Court should not go into the academic issues and seek to interpret the provisions of law when it is not necessary for deciding the issues in the appeal(s) – K.N. Rajakumar Vs. V. Nagarajan & Ors. – Supreme Court

Hon’ble Supreme Court held that it is a settled principle of law that the Court should not go into the academic issues and seek to interpret the provisions of law when it is not necessary for deciding the issues in the appeal(s). Reference in this regard could be made to the judgments of this Court in the cases of Vidya Charan Shukla v. Purshottam Lal Kaushik (1981) 2 SCC 84 and K.I. Shephard and others v. Union of India and others (1987) 4 SCC 431.(p11). Further, it held that it could thus be seen that one of the principal objects of the IBC is providing for revival of the Corporate Debtor and to make it a going concern. Every attempt has to be first made to revive the concern and make it a going concern, liquidation being the last resort.(p16)

Court should not go into the academic issues and seek to interpret the provisions of law when it is not necessary for deciding the issues in the appeal(s) – K.N. Rajakumar Vs. V. Nagarajan & Ors. – Supreme Court Read Post »

There is no second opinion of an important fact that distinction between Deposits and Loans may not be a significant factor for interpreting the word Deposit – Mr. Mohanlal Dhakad Vs. BNG Global India Limited – NCLAT New Delhi

To determine the plea of occurrence of default is the debt which must be due and become payable. An existence of debt and default are to be met for admission of an Application under section 7 of the Code. A Debt is/was recoverable from the Corporate Debtor. It is relevant to point out that a deposit is more than a loan of money. Significantly, deposit is given at the instance of an individual who is making a deposit. Under the Companies Act, 2013, the powers of Tribunal are of wide amplitude. Rule 17 of Companies (Acceptance of Deposits) Rules, 2014 provides that a Company shall be liable to pay penal interest at 18% p.a. to the depositor, if there is any failure to repay Deposits within due date. In fact, the penal interest is payable when the payment was overdue after maturity of the deposits.(p29-30)

At the stage of Admission, the Adjudicating Authority is to be satisfied that a Default had occurred and the Corporate Debtor is entitled to point out that the Default had not occurred. No other person has the right to be heard at the state of Admission. There is no second opinion of an important fact that distinction between Deposits and Loans may not be a significant factor for interpreting the word, Deposit. One cannot ignore a candid fact that maturity of claim, default of claim or invocation of guarantee has no nexus in regard to the filing of claim before the Interim Resolution Professional under section 18(1)(b) of the Code and the Resolution Professional under section 25(2)(e) of the Code.(p31-32)

There is no second opinion of an important fact that distinction between Deposits and Loans may not be a significant factor for interpreting the word Deposit – Mr. Mohanlal Dhakad Vs. BNG Global India Limited – NCLAT New Delhi Read Post »

The term deposit includes any receipt of money by a company either as deposit or loan or in any other form by it, the meaning of Deposit is enlarged by covering receipts of money in any other form & after all, a deposit is something more than a mere loan of money – Sh. Satish Chand Gupta Vs. Servel India Private Limited – NCLAT New Delhi

It cannot be gainsaid that the term deposit includes any receipt of money by a company either as deposit or loan or in any other form by it. Under the Companies (acceptance of deposits) Rules, 2014 the term Deposit is defined under Rule 2(1)(c) in an inclusive manner. The meaning of Deposit is enlarged by covering receipts of money in any other form. After all, a deposit is something more than a mere loan of money. For invoking the jurisdiction of the Tribunal as per Section 74(2) under the Companies Act, 2013, even a partial failure by the Company to repay the deposit was sufficient. In fact, Section 2(31) of the Companies Act speaks of the meaning of deposit. Also, that the Tribunal has vide discretionary powers regarding the repayment of ‘Deposit’(s) but it must exercise its discretion objectively taking into consideration all the relevant aspects in a conspectus judicial manner. In reality, the distinction between deposit and loan may not be a relevant factor for interpreting the term Deposit. To put it succinctly, under the new Companies Act, 2013, the definition of the term Deposit is of wider amplitude, as opined by this Tribunal.

The term deposit includes any receipt of money by a company either as deposit or loan or in any other form by it, the meaning of Deposit is enlarged by covering receipts of money in any other form & after all, a deposit is something more than a mere loan of money – Sh. Satish Chand Gupta Vs. Servel India Private Limited – NCLAT New Delhi Read Post »

Resolution Professional or Committee of Creditors cannot reclassify the status of a creditor from Financial to Operational Creditor – Mr Rajnish Jain The promoter, Stakeholder and Managing Director of Suspended Board of Directors Vs. Manoj Kumar Singh – IRP – NCLAT New Delhi

The issues that arise for Consideration are as under:

i) Whether the Committee of Creditors constituted under Section21 of the Code, 2016, could determine that M/s BVN Traders’ is a Financial or Operational Creditor?

ii) Whether the Resolution Professional could reclassify the status of a creditor from Financial to Operational Creditor based on the expert opinion despite that the Adjudicating Authority had taken a contrary view?

iii) Whether the Order of the Adjudicating Authority in upholding that BVN Traders is a Financial Creditor based on the majority decision of Committee of Creditors is valid?

Resolution Professional or Committee of Creditors cannot reclassify the status of a creditor from Financial to Operational Creditor – Mr Rajnish Jain The promoter, Stakeholder and Managing Director of Suspended Board of Directors Vs. Manoj Kumar Singh – IRP – NCLAT New Delhi Read Post »

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