Death Cases

While a written contract is not an absolute prerequisite for establishing the existence of a Financial Debt, Adjudicating Authority must ascertain that the initiation of CIRP is not done in mala fide and is genuinely aimed at resolving insolvency | Mere admission of receipt of money by Corporate Debtor does not qualify as a Financial Debt under Sec. 5(8) of IBC | It is the duty of Financial Creditor to plead and produce evidence as to the existence of any debt, that is due and payable and not paid to constitute the requirements to file an application under Sec. 7 of the IBC – Meghna Devang Juthani Vs. Ambe Secruities Pvt. Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that:
(i) Written contract may not be necessary to prove a financial debt; however, the nature of the transaction is relevant to constitute financial debt within the meaning of section 5(8) of the IBC
(ii) In order to constitute a “debt”, there must be a liability or obligation on the part of a person in respect of a claim which is due from any person.
(iii) In the absence of any proof as to the nature of the transaction, mere admission of receipt of money by the CD does not qualify as a financial debt within the meaning of Section 5(8) of the IBC.
(iv) While a written contract is not an absolute prerequisite for establishing the existence of a financial debt, the Adjudicating Authority must ascertain that the initiation of CIRP is not done in mala fide and is genuinely aimed at resolving insolvency.
(v) It is the duty of the FC/Applicant to plead and produce evidence as to the existence of any debt, that is due and payable and not paid to constitute the requirements to file an application under Section 7 of the IBC.
(vi) The funds if at all extended by the FC to the CD were exclusively intended for investment purposes, which does not warrant initiation of CIRP in respect of the CD.

While a written contract is not an absolute prerequisite for establishing the existence of a Financial Debt, Adjudicating Authority must ascertain that the initiation of CIRP is not done in mala fide and is genuinely aimed at resolving insolvency | Mere admission of receipt of money by Corporate Debtor does not qualify as a Financial Debt under Sec. 5(8) of IBC | It is the duty of Financial Creditor to plead and produce evidence as to the existence of any debt, that is due and payable and not paid to constitute the requirements to file an application under Sec. 7 of the IBC – Meghna Devang Juthani Vs. Ambe Secruities Pvt. Ltd. – NCLT Mumbai Bench Read Post »

There is no personal liability of the son of the deceased Liquidator to supply documents as was claimed by the Liquidator which could not be located in the papers – Mukesh Kumar Jain, Liquidator Trans Gulf Frozen Food Containers Pvt. Ltd. Vs. Divyanshu Walia – NCLAT New Delhi

The New Liquidator filed I.A. against the son of the deceased liquidator seeking direction to hand over all the documents/records pertaining to the corporate debtor. The Adjudicating Authority while passing the order has noticed the Reply given by the son of the Liquidator and in the replies, details of documents sought by the new Liquidator has been handed over to the present Liquidator.
NCLAT held that whatever the documents were asked for from the son of the deceased liquidator have been given in the Replies submitted by the son as has been noticed by the Adjudicating Authority, hence, no reason to find any fault with the order of the Adjudicating Authority disposing of the Application. It is always open for the present Liquidator to approach the ex-management of the Corporate Debtor for any documents as required and not received by the Liquidator. There is no personal liability of the son of the deceased Liquidator to supply documents as was claimed by the Liquidator which could not be located in the papers. Furthermore, whatever the documents were there with the son of the deceased liquidator has already been submitted.

There is no personal liability of the son of the deceased Liquidator to supply documents as was claimed by the Liquidator which could not be located in the papers – Mukesh Kumar Jain, Liquidator Trans Gulf Frozen Food Containers Pvt. Ltd. Vs. Divyanshu Walia – NCLAT New Delhi Read Post »

Legal Representatives (LRs) including widow of deceased Promoter/Director of Corporate Debtor should be impleaded as a party in application under Section 43, 45, 50 & 66 of the IBC for avoidance of transactions – Arvind Garg Liquidator of Carnation Auto India Pvt. Ltd. Vs. Jagdish Khattar & Ors. – NCLAT New Delhi

In this case, Counsel for the Promoter/Director of Corporate Debtor(Respondent No. 1) has argued that widow of Respondent No. 1 should not be impleaded as LRs as she has no interest in this case. She has also submitted that the Appellant has sought relief pertaining to Section 66 and 67, which is a personal to the deceased Respondent No. 1. NCLAT held that Legal Representatives is not defined in the Code. Therefore, reference could be had to the definition provided to it in the Civil Procedure Code Section 2(11) and according to the this, a person who in law represents the estate of a deceased person and the person who intermeddles with the estate of the deceased are the LRs. The widow Ms. Kiran Khattar definitely represent the estate of the deceased in view of the fact that she is in class I heir as per schedule-I of Section 8 of the Hindu Succession Act, 1956 and insofar as Section 66 and 67 of the Code are concerned, the impact of the said provision about the transfer of the estate arising out of the fraudulent transaction is to be seen only after impleadment.

Legal Representatives (LRs) including widow of deceased Promoter/Director of Corporate Debtor should be impleaded as a party in application under Section 43, 45, 50 & 66 of the IBC for avoidance of transactions – Arvind Garg Liquidator of Carnation Auto India Pvt. Ltd. Vs. Jagdish Khattar & Ors. – NCLAT New Delhi Read Post »

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