Imposed Cost in Judgment/Order

In the IBC proceedings, Applicant is not entitled to withdraw the application filed under Section 9 of Insolvency Code at any stage without reason and pray for liberty to file afresh – Florex Tiles Vs. Greenstone Granite Pvt. Ltd. – NCLAT New Delhi

In this case, the NCLT permitted the Appellant to withdraw the Application with cost, however, as no reason is given and withdrawal is sought at belated stage, no liberty granted to file application again.

Hon’ble NCLAT has dismissed appeal holding that:

(i) When an Application under Section 9 proceeded for more than a year, without there being any valid reason, the Appellant, cannot claim as a matter of right that it ought to have been permitted to file a fresh petition under Section 9.
(ii) While in the IBC proceedings, it cannot be held as a matter of right that the Applicant is entitled to withdraw the Application filed under Section 9 at any stage and pray for liberty to file afresh.
(iii) The permission to file fresh suit can be granted only when the Court is satisfied that there is sufficient ground for allowing the plaintiff to institute a fresh suit. The submission that it is automatic and the Court was obliged to grant permission to file fresh suit, cannot be accepted.

In the IBC proceedings, Applicant is not entitled to withdraw the application filed under Section 9 of Insolvency Code at any stage without reason and pray for liberty to file afresh – Florex Tiles Vs. Greenstone Granite Pvt. Ltd. – NCLAT New Delhi Read Post »

If Adjudicating Authority condoned the delay in filing of claim in CIRP subject to payment of cost, Appellant cannot claim in appeal that payment of cost be deleted and still the claim be accepted – Commercial Tax Officer Audit -5, Mangalore Vs. Bharati Defence and Infrastructure Ltd. and Anr. – NCLAT New Delhi

In this case, there was inordinate delay in filing the claim and the Adjudicating Authority condoned the delay subject to payment of Rs.25,000/- to be paid in Bharatkosh. The condonation of delay and acceptance of claim and payment of cost are interrelated. Appellant cannot claim that payment of cost be deleted and still their claim be accepted. We are of the view that imposition of cost cannot be deleted as prayed in this Appeal.

If Adjudicating Authority condoned the delay in filing of claim in CIRP subject to payment of cost, Appellant cannot claim in appeal that payment of cost be deleted and still the claim be accepted – Commercial Tax Officer Audit -5, Mangalore Vs. Bharati Defence and Infrastructure Ltd. and Anr. – NCLAT New Delhi Read Post »

NCLT dismisses application filed for defer or dismiss CIRP application on the basis of Vidarbha Judgement and levies a penalty of Rs. 1 lac – Simplex Infrastructures Ltd. Vs. Canara Bank – NCLT Kolkata Bench

Hon’ble NCLT Kolkata Bench held that:
(i) Two-Judge Bench of the Hon’ble Supreme Court in M. Suresh Kumar Reddy v. Canara Bank (2023) ibclaw.in 67 SC distinguished Vidarbha case on facts and noted that when the existence of debt and default had been proved, the NCLT is bound to admit the petition under Section 7 of the Code.
(ii) Vidarbha case could not be understood as taking a contrary position in law as opposed to Innoventive Industries [2017] ibclaw.in 02 SC case and also the case law rendered in E.S. Krishnamurthy (2021) ibclaw.in 173 SC by the Hon’ble Apex Court.
(iii) This application has been filed with an intent to derail this Tribunal from considering the Application filed by the Respondent under Section 7 of IBC This is in our view is an attempt to abuse the process of Tribunal and therefore levy a penalty of Rs. 1 Lac (Rs. One Lac only) in terms of Rule 11 of NCLT Rules 2016.

NCLT dismisses application filed for defer or dismiss CIRP application on the basis of Vidarbha Judgement and levies a penalty of Rs. 1 lac – Simplex Infrastructures Ltd. Vs. Canara Bank – NCLT Kolkata Bench Read Post »

NCLT imposes cost on Operational Creditor on inflating the rate of interest to bring Operational Debt under the threshold limit envisaged under section 4 of IBC – Sun Printers v. OMICS International Pvt. Ltd. – NCLT Hyderabad Bench

NCLT Hyderabad Bench held that:
(i) Strangely, the petition is completely silent on the “basis”, for claiming interest @24% p.a. on the principal sum of Rs 68,96,128/.
(ii) The sole purpose behind inflating the rate of interest to 24% p.a. is to bring the subject operational debt under the threshold limit envisaged under section 4 of IB Code and not because of any agreed clause or agreement between the parties.
(iii) The petitioner’s purported claim of existence of the operational debt allegedly due and defaulted, by the respondent will not attract section 9 of IB Code, as such the petition is liable to be dismissed as not maintainable before the Adjudicating Authority.
(iv) The petitioner can be subjected to cost in this case.

NCLT imposes cost on Operational Creditor on inflating the rate of interest to bring Operational Debt under the threshold limit envisaged under section 4 of IBC – Sun Printers v. OMICS International Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

NCLT allows IA to forfeit performance guarantee, and any other money deposited by Successful Resolution Applicant in CIRP and Resolution Professional may consider the forwarding the matter to IBBI for necessary inquiry and make fresh attempt to revive the Corporate Debtor by inviting EOI – Pro Earth Housing Corp. Pvt. Ltd. v. Mr. Rajendra M. Ganatra & Anr. – NCLT Mumbai Bench

NCLT Mumbai Bench held that:
(i) Considering the CoC’s resolution to withdraw the plan on account of deterioration in financial health of the Successful Resolution Applicant and consequent inability to implement the proposals in the Resolution Plan pending for our approval in IA, we are left with no option but to allow the withdrawal of the Resolution Plan and dismiss IA as withdrawn.
(ii) It is fit case to order forfeit the performance guarantee or any other money deposited by it so far towards the Resolution Plan.
(iii) The Resolution Professional may consider the forwarding the matter to IBBI for necessary inquiry, if prima-facie any substance is found therein.
(iv) Make fresh attempt to revive the Corporate Debtor by inviting expression of interest to submit the resolution plan for the Corporate Debtor/ publish Form-G afresh.

NCLT allows IA to forfeit performance guarantee, and any other money deposited by Successful Resolution Applicant in CIRP and Resolution Professional may consider the forwarding the matter to IBBI for necessary inquiry and make fresh attempt to revive the Corporate Debtor by inviting EOI – Pro Earth Housing Corp. Pvt. Ltd. v. Mr. Rajendra M. Ganatra & Anr. – NCLT Mumbai Bench Read Post »

CIRP application filed u/s 10 of IBC to avoid Income Tax liability is not maintainable – Jayam Vyapaar Pvt. Ltd. – NCLT Kolkata Bench

In CIRP Sec. 10 application, NCLT Kolkata Bench observes that:
(i) The application appears to have been filed basically to avoid Income Tax liability, particularly when there is a finding that the Income has escaped tax due to money laundering which could lead to recovery from Directors of the company in terms of Section 179 of the Income Tax Act.
(ii) this application is not for the resolution of the corporate applicant’s insolvency but to scuttle the efforts of the Income tax department in their pursuit of recovery of the dues and it is a settled position of law that this Adjudicating Authority is not a recovery Tribunal.
(iii) The corporate applicant with a fraudulent and malicious intention has filed this application under Section 10 of IBC. Hence, we are of the view that it is a fit case to invoke Section 65 of IBC.
(iv) Imposes a penalty of Rs. One Lakh only upon the Corporate Applicant.

CIRP application filed u/s 10 of IBC to avoid Income Tax liability is not maintainable – Jayam Vyapaar Pvt. Ltd. – NCLT Kolkata Bench Read Post »

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