Liquidation [Main]

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 »

Valuation based on relevant material requires no interference | Dues not included in Resolution Plan are extinguished post approval | IBC provisions override SEZ Act and Rules – Noida Special Economic Zone Authority Vs. Manish Agarwal and Ors. – Supreme Court

In this judgment, the Hon’ble Supreme Court clarifies following issues:

A. Valuation does not call for any interference if it is based on relevant material on record.
B. All the dues is not the part of the Resolution Plan shall stand extinguished and no proceedings could be pressed into service or continues.
C. Claims pertaining to the transfer fees, etc. were not to be interfered with by courts or tribunals as the same stood related to the commercial wisdom of the CoC.
D. Does provision of IBC override Special Economic Zone Act and Rules?

Valuation based on relevant material requires no interference | Dues not included in Resolution Plan are extinguished post approval | IBC provisions override SEZ Act and Rules – Noida Special Economic Zone Authority Vs. Manish Agarwal and Ors. – Supreme Court Read Post »

Once CoC had approved Resolution Plan, SRA cannot object to any conditions stated in the Letter of Intent (LOI) | CoC’s decision to liquidate the Corporate Debtor is a business decision and is clearly not amenable to judicial review – Sanjay Dave Vs. Andhra Bank Ltd. and Ors. – NCLAT New Delhi

In this case, RP while intimating the SRA also informed that the approval of the resolution plan by the CoC was subject to the order reserved by the Adjudicating Authority.

Hon’ble NCLAT held that:
(i) These conditionalities cannot be held to be a surprise for the SRA as these alleged conditionalities were discussed and deliberated in the CoC meetings and it was clear to all the participants including SRA that these conditionalities were integral to the resolution plan of the SRA.
(ii) The Adjudicating Authority rightly refused to entertain the objections of the SRA to the conditions in the LoI since withdrawal or modification of resolution plan after approval by the CoC is not permissible in law.
(iii) It is pertinent to note that the statutory construct of IBC in terms of Section 33 clearly empowers the CoC to decide to liquidate the Corporate Debtor any time before the confirmation of the resolution plan by the Adjudicating Authority.

Once CoC had approved Resolution Plan, SRA cannot object to any conditions stated in the Letter of Intent (LOI) | CoC’s decision to liquidate the Corporate Debtor is a business decision and is clearly not amenable to judicial review – Sanjay Dave Vs. Andhra Bank Ltd. and Ors. – NCLAT New Delhi Read Post »

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi

The liquidator proposed sale of the shares of subsidiary company to Govt. of Keral which was approved by NCLT. However, Govt. of Kerala backed out from the purchase of the shares.

Hon’ble NCLAT held that a purchaser backing out from the transaction the consequences as available in law have to followed and take recourse, but no direction could be issued to compel the State to purchase the share.

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi Read Post »

If CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by RP, CIRP proceedings may be treated to be closed and Resolution Professional cannot file application for dissolution under Section 54 of IBC | RP can intimate the RoC for striking off the name of Corporate Debtor from the Register of the Companies – Janak Jagjivan Shah RP Rainbow Infrabuild Pvt. Ltd. Vs. CoC of Rainbow Infrabuild Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54 of IBC, could not have been taken by the RP
(ii) When the entity, who has initiated the CIRP is not ready to proceed any further and CIRP period having already come to an end, no further steps were required in the CIRP of the Corporate Debtor and RP could have closed the matter by intimating the Registrar of Companies for striking off the name of Company from the Register of the Companies.
(iii) The CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by the RP. The CIRP proceedings may be treated to be closed.

If CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by RP, CIRP proceedings may be treated to be closed and Resolution Professional cannot file application for dissolution under Section 54 of IBC | RP can intimate the RoC for striking off the name of Corporate Debtor from the Register of the Companies – Janak Jagjivan Shah RP Rainbow Infrabuild Pvt. Ltd. Vs. CoC of Rainbow Infrabuild Pvt. Ltd. – NCLAT New Delhi Read Post »

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court

The Hon’ble High Court finds substance in the argument of the learned counsel for the petitioner that the action of the respondent in seeking to recover the outstanding tax due to it under the Maharashtra Village Panchayat Act, 1959 payable before the initiation of CIRP cannot be sustained. The petitioner who acquired the assets of Gupta Global Resources Pvt. Ltd. (Corporate Debtor) through the liquidation process in the year 2019 has received the sale certificate on 31.08.2019 and therefore, it is unflappable that the respondent can recover its outstanding dues payable before this date. The Scheme under the IBC, definitely do not permit such an action.

Auction Purchaser is not liable to pay any outstanding tax dues under the Maharashtra Village Panchayat Act, 1959 pertaining to the period prior to the acquisition of the assets of Corporate Debtor under the Insolvency and Bankruptcy Code, 2016 – Maha Mineral Mining and Benefication Pvt. Ltd. Vs. Gram Panchayat, Gowari – Bombay High Court Read Post »

The process of settlement u/s 230 of the Companies Act with the Corporate Debtor during liquidation is still not completed, claim of the Applicant can be very well be considered – Pradeep Kumar Keshari Vs. Devendra Arora, Liquidator of UP Infraestate Pvt. Ltd. – NCLT Allahabad Bench

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The process of settlement u/s 230 of the Companies Act with the Corporate Debtor during liquidation is still not completed, claim of the Applicant can be very well be considered – Pradeep Kumar Keshari Vs. Devendra Arora, Liquidator of UP Infraestate Pvt. Ltd. – NCLT Allahabad Bench Read Post »

Right to Payment or the right to remedy for breach of contract would give rise to a debt and Liquidator has to admit the claim against the same – Meja Urja Nigam Pvt. Ltd. Vs. Mr. Sutanu Sinha, Liquidator of IVRCL Ltd. – NCLT Hyderabad Bench

Hon’ble NCLT Hyderabad Bench held that:

(i) The right to payment or the right to remedy for breach of contract would give rise to a debt, existence of which once established, result in a claim that the liquidator has to admit the same.
(ii) This discretion contrasts with the more limited authority granted to the Resolution Professional (RP) during the verification of claims in CIRP proceedings.

Right to Payment or the right to remedy for breach of contract would give rise to a debt and Liquidator has to admit the claim against the same – Meja Urja Nigam Pvt. Ltd. Vs. Mr. Sutanu Sinha, Liquidator of IVRCL Ltd. – NCLT Hyderabad Bench Read Post »

Can Monitoring Committee of the Corporate Debtor file an application under Section 33(3) of IBC for liquidation of the Corporate Debtor on non-implementation of the Resolution Plan? – Mr. T. Sathisan, Monitoring Committee Chairman of Splendid Metal Products Ltd. Vs. Invent Assets Securitisation and Reconstruction Pvt. Ltd. – NCLT Hyderabad Bench

In this case, an application has been filed under Section 33(3) of IBC by the Chairman of the Monitoring Committee & Erstwhile Resolution Professional (RP) of the Corporate Debtor, seeking Orders for Liquidation of the Corporate Debtor, as the Resolution Plan approved by this Tribunal has not been implemented by the Successful Resolution Applicants (SRAs).

Hon’ble NCLT Hyderabad Bench held that under Section 33(3), the application for liquidation order can be made by any person, other than the Corporate Debtor, whose interests are prejudicially affected by the contravention of the Approved Resolution Plan.

Can Monitoring Committee of the Corporate Debtor file an application under Section 33(3) of IBC for liquidation of the Corporate Debtor on non-implementation of the Resolution Plan? – Mr. T. Sathisan, Monitoring Committee Chairman of Splendid Metal Products Ltd. Vs. Invent Assets Securitisation and Reconstruction Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

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