36 (4) (a) (i)

Whether Liquidator is authorized to sell the assets of the Corporate Debtor in blocks? – Stressed Assets Stabilisation Fund v. Ms. Rekha Kantilal Shah – NCLT Mumbai Bench

NCLT Mumbai Bench held that:
(i) The Liquidator has been provided with ample powers not only to sell the land in parcels but also not to be bound by the consultation with the stakeholders.
(ii) Section 36 of the IB Code 2016 categorically stipulates the scope and ambit of the liquidation estate. Sub-Section (4) of Section 36 is with respect to the assets which shall not be included in the liquidation estate and shall not be used for recovery in the liquidation.
(iii) The Liquidator is authorized to sell the immovable and movable property of the Corporate Debtor in liquidation through a public auction or a private contract, either collectively, or in a piecemeal manner.
(iv) The proviso to Section 35 (2) of the IBC makes it clear that the opinion of the stakeholders would not be binding on the Liquidator.

Whether Liquidator is authorized to sell the assets of the Corporate Debtor in blocks? – Stressed Assets Stabilisation Fund v. Ms. Rekha Kantilal Shah – NCLT Mumbai Bench Read Post »

Goods imported by Corporate Debtor at the strength of letter of credit which is kept in the trust for a Bank on default in payment is outside the liquidation estate of the Corporate Debtor – IDBI Bank Ltd. Vs. Bhatia Global Trading Ltd. – NCLT Indore Bench

The Corporate Debtor had imported goods on letter of credit, upon default of the Corporate Debtor the bank had to honour the payment. The Bombay High Court order recognised the rights of bank to be of a secured creditor and restrained sale of imported goods. The Corporate Debtor sold the goods in breach of restraint order. Pursuant to this the Corporate Debtor entered CIRP and liquidation later on, and the bank had also relinquished its security interest.
The NCLT vide this order, appreciated the fact that the LC documents included a clause that goods imported are held as trust for the bank, and for this very reason the money received from sale of these goods belonged to the bank. Considering this amount as a property of the bank held in trust by the Corporate Debtor rather than being a security interest, the NCLT ruled that this amount doesn’t forms part of liquidation estate and can be realized by the LC issuing bank outside liquidation.

Goods imported by Corporate Debtor at the strength of letter of credit which is kept in the trust for a Bank on default in payment is outside the liquidation estate of the Corporate Debtor – IDBI Bank Ltd. Vs. Bhatia Global Trading Ltd. – NCLT Indore Bench Read Post »

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