36 (3) (d)

Liquidator has power to call for Extraordinary General Meeting (EGM) of a Subsidiary Company of the Corporate Debtor in terms of the proviso to Section 98(1) and 100 of Companies Act, 2013 read with Section 36(3)(d) of IBC – Mr. Velayudham Jayavel, Liquidator of IDEB Projects Pvt. Ltd. Vs. IDEB Buildcon Pvt. Ltd. and Ors. – NCLT Bengaluru Bench

Hon’ble NCLT Bengaluru Bench held that the shares of the Corporate Debtor in the Subsidiary Company is a part of the Liquidation estate under Section 36(3)(d) of the IBC and hence power is vested to the Liquidator to take such measures to protect and carry on the business for the benefit of the Corporate Debtor. As such since the Corporate Debtor is a shareholder of the Subsidiary Company, and under Section 100 of the Companies Act, 2013 entitled to call for EGM, the same can be called by the Liquidator who is only acting on behalf of the Corporate Debtor. Under Section 98 of the Companies Act, NCLT has limited power to adjudicate the calling of the EGM and cannot decide on the agenda of calling such EGM.

Liquidator has power to call for Extraordinary General Meeting (EGM) of a Subsidiary Company of the Corporate Debtor in terms of the proviso to Section 98(1) and 100 of Companies Act, 2013 read with Section 36(3)(d) of IBC – Mr. Velayudham Jayavel, Liquidator of IDEB Projects Pvt. Ltd. Vs. IDEB Buildcon Pvt. Ltd. and Ors. – NCLT Bengaluru Bench Read Post »

When a property has been sold in an auction sale on ‘as is where is’ basis in liquidation under IBC, Auction Purchaser is not liable to pay pre-CIRP outstanding dues of electricity connection before getting a new electricity connection – Rashidhan Sales Pvt. Ltd. and another Vs. Damodar Valley Corporation and others – Calcutta High Court

Hon’ble High Court held that the auction purchaser did not purchase the company or its goodwill as a whole. At the time of sale, the company was decimated and its assets sold separately. Hence, in the strict connotation of the term, it cannot be said that the erstwhile company “continued” its existence. The auction purchaser, a different entity altogether, now seeks to re-start afresh the business of the borrower in its independent capacity. As per the settled law, within the contemplation of the IBC, the auction purchaser is entitled to commence with a ‘clean slate’. The expression “as is where is” basis can only signify the exact position of the property as on the date of sale. The proceeding before the Tribunal falls within the scope of the IBC and only in respect of liabilities arising out of the CIRP. Even when the NCLT held that the claim did not arise out of the CIRP, the same issue was under consideration. The challenge before the NCLAT also revolves around the question as to whether the claims are related to the CIRP.

When a property has been sold in an auction sale on ‘as is where is’ basis in liquidation under IBC, Auction Purchaser is not liable to pay pre-CIRP outstanding dues of electricity connection before getting a new electricity connection – Rashidhan Sales Pvt. Ltd. and another Vs. Damodar Valley Corporation and others – Calcutta High Court Read Post »

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