35 (1) (b)

Whether Revenue/Profit earned from Secured Assets from the date of communication by Secured Creditor to Liquidator to realize Secured Assets asset under Section 52 of IBC till date of possession of Secured Assets by Financial/Secured Creditor will be part of Liquidation Estate? – KRS Erectors Pvt. Ltd. Vs. J.C. Flowers Asset Reconstruction Pvt. Ltd. – NCLT Hyderabad Bench

In this important judgment, Hon’ble NCLT Hyderabad Bench held that:
(i) From carefully peruse to Regulation 21A(1) of the Liquidation Regulations, 2016, it is very much clear that secured assets shall be presumed to be part of the liquidation estate only when secured creditor fail to inform the liquidator of its decision to relinquish its security interest to the liquidation estate or realize its security interest, as the case may be, in Form C or Form D of the Schedule II within 30 days, which admittedly is not applicable in this case on hand.
(ii) If secured creditor intimate its decision in time as prescribed in regulation, the secured assets do not form part of liquidation estate at any point of time.
(iii) If assets cannot be treated as part of liquidation estate, the income derived from these assets also cannot be part of liquidation estate.

Whether Revenue/Profit earned from Secured Assets from the date of communication by Secured Creditor to Liquidator to realize Secured Assets asset under Section 52 of IBC till date of possession of Secured Assets by Financial/Secured Creditor will be part of Liquidation Estate? – KRS Erectors Pvt. Ltd. Vs. J.C. Flowers Asset Reconstruction Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

IBC would prevail over the Customs Act, 1962 and once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, the Custom authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies – Sundaresh Bhatt, Liquidator of ABG Shipyard Vs. Central Board of Indirect Taxes and Customs – Supreme Court of India

Hon’ble Supreme Court held that:
i) Once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC as the case may be, the respondent authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies. The respondent authority does not have the power to initiate recovery of dues by means of sale/confiscation, as provided under the Customs Act.

ii) After such assessment, the respondent authority has to submit its claims (concerning customs dues/operational debt) in terms of the procedure laid down, in strict compliance of the time periods prescribed under the IBC, before the adjudicating authority.

iii) In any case, the IRP/RP/liquidator can immediately secure goods from the respondent authority to be dealt with appropriately, in terms of the IBC.

IBC would prevail over the Customs Act, 1962 and once moratorium is imposed in terms of Sections 14 or 33(5) of the IBC, the Custom authority only has a limited jurisdiction to assess/determine the quantum of customs duty and other levies – Sundaresh Bhatt, Liquidator of ABG Shipyard Vs. Central Board of Indirect Taxes and Customs – Supreme Court of India Read Post »

There is no conflict between PMLA and IBC and even if a property has been attached in the PMLA which is belonging to the Corporate Debtor, if CIRP is initiated, the property should become available to fulfil objects of IBC till a resolution takes place or sale of liquidation asset occurs in terms of Section 32A – The Directorate of Enforcement Vs. Sh Manoj Kumar Agarwal, Resolution Professional- NCLAT New Delhi

NCLAT held that after the attachment when matter goes before the Adjudicating Authority under PMLA, proceeding before Adjudicating Authority for confirmation would be civil in nature. That being so, Section 14 of IBC would be attracted and applies. In present matter, the Provisional Attachment took place on 29th May, 2018 and corrigendum was issued on 14th June, 2018. The CIRP started on 16th July, 2018. Once moratorium was ordered, even if the Appellant moved the Adjudicating Authority under PMLA, further action before Adjudicating Authority under PMLA must be said to have been prohibited. Even if confirmation has been done as stated to have been done on 20th November, 2018, the same will have to be ignored. Section 14 of IBC will hit institution and continuation of proceedings before Adjudicating Authority under PMLA. The CIRP will of course not affect prosecution before Special Court, till contingencies under Section 32A of IBC occur.

There is no conflict between PMLA and IBC and even if a property has been attached in the PMLA which is belonging to the Corporate Debtor, if CIRP is initiated, the property should become available to fulfil objects of IBC till a resolution takes place or sale of liquidation asset occurs in terms of Section 32A – The Directorate of Enforcement Vs. Sh Manoj Kumar Agarwal, Resolution Professional- NCLAT New Delhi Read Post »

Scroll to Top