52 (1) (a)

Whether Successful Bidder, who has purchased the property pursuant to Liquidation auction is liable to pay the electricity dues of the property? | Whether NOC regarding charge on assets of Corporate Debtor would result in relinquishment of the secured interest in terms of section 52(1)(a) of the IBC? – Harsh Kumar Vs. The Assistant Engineer, Electrical Sub Division, Himachal Pradesh State Electricity Board Ltd. and Ors. – NCLT Chandigarh Bench

Hon’ble NCLT Chandigarh Bench held that:

(i) In the e-auction documents, it was clearly mentioned that the properties i.e. Land and Building, and Plant and Machinery being sold by the Liquidator are on “AS IS WHERE IS BASIS”, “AS IS WHAT IS BASIS”, “WHATEVER THERE IS BASIS” and “NO RECOURSE BASIS”, the Successful Bidder would be liable to pay the arrears of the electricity dues.
(ii) Once the claim of electricity dues has been admitted by the Liquidator, no subsequent impediments can be imposed by the liquidator. However, Electricity Company has given NoC to the Liquidator, this would result in relinquishment of the secured interest of Electricity Company in the liquidation estate in terms of section 52(1)(a) of the IBC.

Whether Successful Bidder, who has purchased the property pursuant to Liquidation auction is liable to pay the electricity dues of the property? | Whether NOC regarding charge on assets of Corporate Debtor would result in relinquishment of the secured interest in terms of section 52(1)(a) of the IBC? – Harsh Kumar Vs. The Assistant Engineer, Electrical Sub Division, Himachal Pradesh State Electricity Board Ltd. and Ors. – NCLT Chandigarh Bench Read Post »

The scope of an adjudication of the security interest during a liquidation process is provided only in Section 52(3) of IBC – Culver Max Entertainment Pvt. Ltd. Vs. National Company Law Tribunal and Ors. – Calcutta High Court

Section 25 does not envisage any adjudication of the rights of a secured creditor to any of the assets. Only if a secured creditor in the liquidation proceedings realizes its security interest in the manner specified in section 52 of the IBC, under sub-section (1)(b) of the said Section, he shall inform the Liquidator of such security interest and identify the assets subject to such security interest to be realized, as per the provisions of Section 52(2). Only in such a case, under Section 52(3), the Liquidator shall verify such security interest before it is realized by the Secured Creditor under the said Section and permit the Secured Creditor to realize only such security interest, the existence of which may be proved either by the records of such security interest maintained by an information utility or by such other means as may specified by the Board.

The scope of an adjudication of the security interest during a liquidation process is provided only in Section 52(3) of IBC – Culver Max Entertainment Pvt. Ltd. Vs. National Company Law Tribunal and Ors. – Calcutta High Court Read Post »

Issue of claim any injunction before High Court during pendency of the Liquidation proceeding – Alliance Broadband Services Pvt. Ltd. Vs. Manthan Broadband Services Pvt. Ltd. – Calcutta High Court

In this case, The Liquidator has refused to recognize the petitioner as secured creditor or to allow the petitioner to sell the pledged shares towards the partial satisfaction of the claim of the petitioner against the respondent. Hon’ble High Court held that as per Section 238 of the IBC, 2016 is having override effect in any other law for the time being in force. In view of my prima facie findings that this Court cannot pass any interim order at this stage. This Court is of the view that the matter in issue in the suit can be more appropriately and effectively decided and adjudicated by the NCLT. In the present case, Section 430 of the Companies Act, 2013 itself provides an additional bar by stating that no injunction shall be granted by any civil court in respect of any action taken or to be taken in pursuance of any power conferred on the NCLT by the Companies Act, 2013.

Issue of claim any injunction before High Court during pendency of the Liquidation proceeding – Alliance Broadband Services Pvt. Ltd. Vs. Manthan Broadband Services Pvt. Ltd. – Calcutta High Court Read Post »

Non-registration of mortgage and hypothecation under Section 77(3) of the Companies Act, 2013, of security interest was created by virtue of the judgment of Debt Recovery Tribunal cannot be classified as Unsecured Creditor – SICOM Ltd. Vs. Mr. Sundaresh Bhat, The Liquidator of ABG Shipyard Ltd. – NCLAT New Delhi

In this case, the Adjudicating Authority has rejected the I.A. filed by the Appellant substantially on two grounds:(i) The Application was barred by time since as per Section 42 of the Code, a creditor may appeal before the Adjudicating Authority against the decision of Liquidator within 14 days on receipt of such decision, whereas the Application was filed after 551 days. (ii) The charge being not duly registered under Section 77 sub-section (3) of the Companies Act, 2013, the Liquidator did not commit any error in not taking into consideration and classifying the Appellant as ‘unsecured creditor’.
NCLAT held that the present was not a case where the claim of the Appellant of dues was rejected by the Liquidator altogether. The claim of the Appellant claiming an amount was accepted, but the Appellant was classified as unsecured creditor. Section 60(5) empowers the Adjudicating Authority to entertain or dispose of any Application by or against the corporate debtor or corporate person; any claim made by or against the corporate debtor or corporate person; and any question of proprieties in relation to liquidation proceedings. It is not the finding of the Adjudicating Authority that the I.A. filed by the Appellant was not entertainable under Section 60 sub- section (5). When the Application was maintainable and entertainable under Section 60(5), there is no occasion to treat the Application as an Appeal under Section 42 of the Code and reject the Application on the ground that it is not filed within 14 days as is provided by Section 42 of the Code.
Further, it held that In the present, the order passed by the Debt Recovery Tribunal dated 26th April, 2017 is an order adjudicating the dispute between the Appellant and the Corporate Debtor and after adjudication, the order passed by the Tribunal is akin to a Decree. The order dated 26th April, 2017 indicates that 30 days’ time was allowed to the defendants (one of which was Corporate Debtor) to make the payment, failing which the amount was to be recovered from the sale of mortgaged and hypothecated properties. When the sale of mortgaged and hypothecated was directed as per judgment of the Debt Recovery Tribunal, the mortgage and hypothecation no longer remained the matter of contract, rather it was the part of the judgment of the Tribunal and the non-registration of charge as required by Section 77 of Companies Act, 2013 does not in any manner affect enforceability of the order dated 26th April, 2017.

Non-registration of mortgage and hypothecation under Section 77(3) of the Companies Act, 2013, of security interest was created by virtue of the judgment of Debt Recovery Tribunal cannot be classified as Unsecured Creditor – SICOM Ltd. Vs. Mr. Sundaresh Bhat, The Liquidator of ABG Shipyard Ltd. – NCLAT New Delhi Read Post »

Whether the period of dispute between liquidator & secured creditor should be excluded, to calculate of percentage of fees of liquidator, dependent on such period, considering the intent of legislature under regulation 21A of IBBI (Liquidation Process) Regulations, 2016 – Vijender Sharma, Liquidator of M/s SPM Auto Pvt. Ltd. Vs. Small Industries Development Bank of India (SIDBI) – NCLT New Delhi Bench Court-VI

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Whether the period of dispute between liquidator & secured creditor should be excluded, to calculate of percentage of fees of liquidator, dependent on such period, considering the intent of legislature under regulation 21A of IBBI (Liquidation Process) Regulations, 2016 – Vijender Sharma, Liquidator of M/s SPM Auto Pvt. Ltd. Vs. Small Industries Development Bank of India (SIDBI) – NCLT New Delhi Bench Court-VI Read Post »

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