74 (2)

Initiation of proceeding u/s 14B & 7Q of EPF Act 1952 after Corporate Debtor admitted into CIRP is an offence punishable u/s 74(2) of IBC, NCLT grants liberty to Liquidator to approach IBBI to proceed against EPFO’s erred officials in this regard – Regional Provident Fund Commissioner Vs. Excel Glass Ltd. (Under Liquidation) – NCLT Kochi Bench

NCLT Kochi Bench held that:
(i) No claim has been presented by the applicant during the liquidation proceeding and the applicant also taken a stand that there is no need to file any claim, if this is the stand of the applicant then the question of rejection of claim does not arise at all. The applicant also has not filed this application under section 42 of IBC 2016, the specific provision available in IBC 2016 to prefer an appeal against the rejection of claim order, but this application is filed under the residuary provision of section 60(5) of IBC 2016.
(ii) In this case, the applicant initiated the proceeding under section 14B and 7Q of EPF Act 1952 after the corporate debtor admitted into CIRP, continued the proceeding and passed the order on 24.07.2019 and issued Recovery certificates dated 30.07.2019.
(iii) The applicant knowingly flouted the moratorium order and proceeded with the proceedings under sections 7Q and 14B of the Employees provident funds and Miscellaneous Provisions Act 1952, thus committed an offence punishable under section 74(2) of IBC, 2016. This section is criminal in nature falls under Chapter VII under the heading Offences and Penalties, under section 236(1) of IBC, 2016 special court alone have jurisdiction. Further under section 236 (2) of IBC, 2016 cognizance of the offence can be taken only on the compliant of IBBI or Central Government. Hence the 2nd respondent is granted liberty to approach the IBBI to proceed against the applicant’s erred officials in this regard.

Initiation of proceeding u/s 14B & 7Q of EPF Act 1952 after Corporate Debtor admitted into CIRP is an offence punishable u/s 74(2) of IBC, NCLT grants liberty to Liquidator to approach IBBI to proceed against EPFO’s erred officials in this regard – Regional Provident Fund Commissioner Vs. Excel Glass Ltd. (Under Liquidation) – NCLT Kochi Bench Read Post »

Search and Seizure of records of Corporate Debtor and issuance summons to Resolution Professional by GST Department during CIRP are violation of mortarium under section 14 of IBC, 2016 – K. Easwara Pillai – RP Mangomeadows Agricultural Pleasure Land Pvt. Ltd. Vs. Goods and Services Tax Department – NCLT Kochi Bench

In this case, GST Department after submitted its claim in CIRP, all of a sudden raided the premises of the Corporate Debtor after issued summon to Suspended Managing Director of the Corporate Debtor. The raid was conducted and seized all the account documents and also sent a summon to the Resolution Professional to appear for an inquiry.
The question before NCLT Kochi Bench was whether the search and seizure of records of the corporate debtor and issuance of summons to applicant/resolution profession are violative of mortarium order passed under section 14 of IBC, 2016?
Read here landmark decision of the NCLT Kochi Bench.

Search and Seizure of records of Corporate Debtor and issuance summons to Resolution Professional by GST Department during CIRP are violation of mortarium under section 14 of IBC, 2016 – K. Easwara Pillai – RP Mangomeadows Agricultural Pleasure Land Pvt. Ltd. Vs. Goods and Services Tax Department – NCLT Kochi Bench Read Post »

Neither the proceedings for recovery of the dues nor the proceedings for recovery of possession of the allotted premises can be allowed to continue or any proposed action in that regard can be sustained during the CIRP – Ashok Kumar Dewan RP for Maxx Mobile Communication Limited Vs. The Development Commissioner Office of the Development Commissioner – NCLT Mumbai Bench

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Neither the proceedings for recovery of the dues nor the proceedings for recovery of possession of the allotted premises can be allowed to continue or any proposed action in that regard can be sustained during the CIRP – Ashok Kumar Dewan RP for Maxx Mobile Communication Limited Vs. The Development Commissioner Office of the Development Commissioner – NCLT Mumbai Bench Read Post »

The Corporate Debtor had no right to claim the margin money after the invocation of Bank Guarantee during the Moratorium under Section 14 of IBC- Indian Overseas Bank Vs. Arvind Kumar RP/Liquidator M/s Richa Industries Ltd – NCLAT New Delhi

NCLAT held that invocation of the guarantee during moratorium uner Sec. 14 could not be stopped by the Bank. From Sec. 14(1)(c) read with 3(31) and from the decision in Gail (India) Limited Vs. Rajeev Manaadiar & Others [2018] ibclaw.in 43 NCLAT it is clear that ‘Security Interest’ does not include the ‘Performance Bank Guarantee’. The Performance Bank Guarantee is not covered by Section 14 of the Code. It is pertinent to mention that the ‘margin money’ is not a security as has been argued by the Respondent and does not require any registration of charge. Only the assets gave by the Company as securities are required to be registered under Section 77 of the Companies Act, 2013. The ‘margin money’ is the contribution on the part of the borrower who seeks ‘Bank Guarantee’. The said margin money remains with the Bank, as long as the Bank Guarantee is alive. If the Bank Guarantee expires without being invoked, then the margin money reverse back to the borrower, and in case the bank guarantee is invoked by the beneficiary, the margin money goes towards payment of bank guarantee to the beneficiary, and nothing remains with the financial institutions, which can be reversed to the Corporate Debtor.

The Corporate Debtor had no right to claim the margin money after the invocation of Bank Guarantee during the Moratorium under Section 14 of IBC- Indian Overseas Bank Vs. Arvind Kumar RP/Liquidator M/s Richa Industries Ltd – NCLAT New Delhi Read Post »

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