CIRP-IV Rplan-Payment/Distribution/CIRP Cost in Resolution Plan

As per Section 30(4) of the IBC, the CoC has the jurisdiction to decide on the distribution of the amount either based on the vote share of the Financial Creditors or as per their security interest – HDFC Bank Ltd. Vs. Pratim Bayal, RP of Birla Tyres Ltd. and Ors. – NCLAT New Delhi

The Hon’ble NCLAT referring various judgments held that after amendments made in Section 30(4), the CoC have been given jurisdiction to take a decision as to distribute the amount as per vote share of the financial creditor or as per the security interest which is in their commercial wisdom and decision taken by requisite vote share by the CoC is final and binding on all including the dissenting financial creditors and dissenting financial creditors at best is entitled for minimum of liquidation value. The use of expression “may” in Section 30(4) clearly indicate the discretion vested in the CoC to take into account of the matter of security interest of the secured creditors in approving the Resolution Plan.

As per Section 30(4) of the IBC, the CoC has the jurisdiction to decide on the distribution of the amount either based on the vote share of the Financial Creditors or as per their security interest – HDFC Bank Ltd. Vs. Pratim Bayal, RP of Birla Tyres Ltd. and Ors. – NCLAT New Delhi Read Post »

Distribution amongst Secured Creditors on the basis of charge on the security interest of individual Creditors or as per admitted debt of Secured Creditors on pro-rata basis? – State Bank of India Vs. IDBI Bank Ltd. and Anr. – NCLAT New Delhi

The Hon’ble Appellate Tribunal is of the view that Adjudicating Authority has not committed any error in directing distribution of sale proceeds as per the admitted claim of the Financial Creditor pro-rata basis and the directions issued by the Adjudicating Authority is in accordance with law as declared by the Hon’ble Supreme Court in India Resurgence ARC Pvt. Ltd. v. Amit Metaliks Ltd. (2021) ibclaw.in 87 SC.

Distribution amongst Secured Creditors on the basis of charge on the security interest of individual Creditors or as per admitted debt of Secured Creditors on pro-rata basis? – State Bank of India Vs. IDBI Bank Ltd. and Anr. – NCLAT New Delhi Read Post »

Whether workmen are entitled to the salary till insolvency commencement date in case of factory layoff/ Closed prior to commencement of CIRP? – Drish Shoes Workers Union Vs. Drish Shoes Ltd. through its RP – NCLAT New Delhi

The Hon’ble NCLAT held that non-computation of salary after lay off by the Resolution Professional cannot be faulted with since the Resolution Professional has no adjudicatory jurisdiction and the Adjudicating Authority has rightly observed that whether the Workers are entitled to claim their dues for the layoff period under provisions of Industrial Dispute Act is not in the domain of the Adjudicating Authority.

Whether workmen are entitled to the salary till insolvency commencement date in case of factory layoff/ Closed prior to commencement of CIRP? – Drish Shoes Workers Union Vs. Drish Shoes Ltd. through its RP – NCLAT New Delhi Read Post »

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench

It is well settled law that an approved Resolution plan is binding on  all the stake holders and in this case, the Hon’ble Tribunal is of the view the resolution plan has been approved with payments in instalments only to the assenting financial creditors whereas the dissenting financial creditors will have to be paid in full before the assenting financial creditors are paid. We have also considered the explanation 1 of Section 30 (2) of IB Code which says that distribution in accordance with provisions of this clause shall be fair and equitable to such creditors (Operational creditors and dissenting financial creditors).

Dissenting Financial Creditors get payment in full before any payment is made to assenting Financial Creditors – IDBI Bank Ltd. and Ors. Vs. Mr. Anjanee Kumar Lakhotia and Anr. – NCLT Kolkata Bench Read Post »

The right to maintenance will be superior to and have overriding effect than the statutory rights afforded to Financial Creditors, Secured Creditors, Operational Creditors or any other such claimants encompassed within the SARFAESI Act, 2002, the Insolvency and Bankruptcy Code, 2016 (IBC) or similar such laws – Apurva @ Apurvo Bhuvanbabu Mandal Vs. Dolly and Ors. – Supreme Court

Login with GoogleOR Username Password Remember Me     Forgot Password In case you’ve already logged in, click here

The right to maintenance will be superior to and have overriding effect than the statutory rights afforded to Financial Creditors, Secured Creditors, Operational Creditors or any other such claimants encompassed within the SARFAESI Act, 2002, the Insolvency and Bankruptcy Code, 2016 (IBC) or similar such laws – Apurva @ Apurvo Bhuvanbabu Mandal Vs. Dolly and Ors. – Supreme Court Read Post »

Whether separate class of creditors can be created under the broad category of Operational Creditors | Whether, differential treatment inter-se the same class of creditors is permissible | Whether the provisions of MSMED give protection to MSME status Operational Creditors in CIRP proceedings under the Code and Regulations – NCC Ltd. Vs. Golden Jubilee Hotels Pvt. Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) No word like “special Operational Creditor” has been defined under Section 3 or 5 of the Code or anywhere else or even in the regulations.
(ii) The role of the Adjudicating Authority is to ensure that the Resolution Plan complies with the requirements of the Code especially under Section 30(2) of the Code.
(iii) CoC has no role in deciding the position of the creditor either as financial or Operational Creditor and such decision in true sense cannot be treated as commercial wisdom.
(iv) While the Code does not categorize any operational creditors as “special,” it does recognize different classes of operational creditors based on their claims. For instance, operational debts can include dues related to the supply of goods and services, employment-related obligations, and statutory dues payable to government authorities. However, all operational creditors are treated under the same legal framework without special distinctions within their category.
(v) The legislative intent is clear that MSMEs creditors have no special rights over other creditors.
(vi) NCLT had no jurisdiction to impose such conditions with regard to amounts as may be recoverable by the corporate debtor in future. Any amount receivable by the corporate debtor, being an asset of the company, would continue to remain with the Corporate Debtor upon implementation of the resolution plan.

Whether separate class of creditors can be created under the broad category of Operational Creditors | Whether, differential treatment inter-se the same class of creditors is permissible | Whether the provisions of MSMED give protection to MSME status Operational Creditors in CIRP proceedings under the Code and Regulations – NCC Ltd. Vs. Golden Jubilee Hotels Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Should a Revenue Recovery Certificate (RRC) issued under the Industrial Disputes Act, 1947 be treated as a secured creditor under section 3(30) of the IBC? – Hotline Glass Ltd. Majdoor Sangh Vs. Mr. Jigar Pradipchandra Shah RP of Hotline Glass Ltd. – NCLT Indore Bench

Hon’ble NCLT Indore Bench held that in the present case the issue of rejection of the claim by the resolution professional on the basis that the claim made by the applicant are belated claims and barred by limitation can be overlooked and can be condoned, as the action for such claim was already taken by the applicant in time and the delay in execution of such RRC was on the part of the Government official appointed for execution of such RRC and the applicant cannot be held responsible for such delay on the part of execution. Further, it is the responsibility of an employer to make a provision with regards to the part of the gratuity amount payable towards the employees/workmen, so as to the part of the gratuity claim concerned that should be considered by the resolution professional.

Should a Revenue Recovery Certificate (RRC) issued under the Industrial Disputes Act, 1947 be treated as a secured creditor under section 3(30) of the IBC? – Hotline Glass Ltd. Majdoor Sangh Vs. Mr. Jigar Pradipchandra Shah RP of Hotline Glass Ltd. – NCLT Indore Bench Read Post »

Scroll to Top