CIRP Process-Control & Custody of Asset/Property

The power of re-call does not mean to hear the case – Mr. Chintala Maipal Reddy and Ors. Vs. Mr. Nethi Mallikarjuna Setty Liquidator of Amazon Enterprises Pvt. Ltd. – NCLT Hyderabad Bench

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The power of re-call does not mean to hear the case – Mr. Chintala Maipal Reddy and Ors. Vs. Mr. Nethi Mallikarjuna Setty Liquidator of Amazon Enterprises Pvt. Ltd. – NCLT Hyderabad Bench Read Post »

Can the NCLT, under Section 60(5) of the IBC, pass an order for the eviction of tenancy rights in a property of the Corporate Debtor? | Can insolvency laws override statutory tenancy protections? | Whether tenancy disputes fall outside the scope of insolvency resolution? – Sumati Suresh Hegde and Ors. Vs. Anand Sonbhadra, RP of Champalalji Finance Pvt. Ltd. and Ors. – NCLAT New Delhi

The Hon’ble NCLAT held that:

(i) IRP did not pursue the suit for eviction which was a right procedure, rather filed an application under Section 60(5) r/w Section 25(2)(a) of the Code before the Tribunal by short circuiting the route of eviction of the present appellants under the garb of the provisions of the Code.
(ii) The Tribunal has committed a patent error in passing the order of eviction considering the possession of the Appellants as of the lessee.
(iii) There is a sharp difference between the lease and a tenancy.
(iv) In the present case, there has been no change of the tenancy rights of the Appellants by way of a contract and the law which is to operate in respect of termination of tenancy are the provisions of the Maharashtra Rent Control Act, 1999 and not the Code.
(v) It is also otherwise well settled that once a tenant always a tenant unless the status changes by contract or by operation of law.
(vi) The Application under Section 60(5) of the IBC is only maintainable if the issue involved is related to insolvency resolution process.

Can the NCLT, under Section 60(5) of the IBC, pass an order for the eviction of tenancy rights in a property of the Corporate Debtor? | Can insolvency laws override statutory tenancy protections? | Whether tenancy disputes fall outside the scope of insolvency resolution? – Sumati Suresh Hegde and Ors. Vs. Anand Sonbhadra, RP of Champalalji Finance Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Is an amount which was seized by the Income Tax Department and adjusted against demand prior to initiation of CIRP, an asset of the Corporate Debtor? – Harish Chander Arora Liquidator of Rathi Super Steel Ltd. Vs. The Principal Commissioner of Income Tax (PCIT), Ghaziabad, and Anr. – NCLAT New Delhi

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Is an amount which was seized by the Income Tax Department and adjusted against demand prior to initiation of CIRP, an asset of the Corporate Debtor? – Harish Chander Arora Liquidator of Rathi Super Steel Ltd. Vs. The Principal Commissioner of Income Tax (PCIT), Ghaziabad, and Anr. – NCLAT New Delhi Read Post »

Can a flat, without a conveyance deed but based solely on the registered Agreement for Sale and full payment made by the homebuyers prior to commencement of CIRP, be excluded from the assets of the Corporate Debtor? – Mr. Rajkumar Jhawar and Anr. Vs. Mr. Arun Kapoor RP of Monarch Brookfields LLP and Ors. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that the contention of Applicants claiming marketable title to the said Flat without a conveyance deed but based on the Agreement for sale solely because the document is registered and full payment has been made is totally unsustainable.

Can a flat, without a conveyance deed but based solely on the registered Agreement for Sale and full payment made by the homebuyers prior to commencement of CIRP, be excluded from the assets of the Corporate Debtor? – Mr. Rajkumar Jhawar and Anr. Vs. Mr. Arun Kapoor RP of Monarch Brookfields LLP and Ors. – NCLT Mumbai Bench Read Post »

Development rights created in favour of Corporate Debtor constitute ‘property’ within the meaning of Section 3(27) of the IBC and the RP has to include in Information Memorandum the assets in which the corporate debtor has development rights | Adjudicating Authority does not lack jurisdiction in deciding whether development rights are part of the CIRP or it should be excluded and parties need not have to be relegated to the Civil Court – K.H. Khan and Anr. Vs. Art Constructions Pvt. Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) The development rights created in favour of the corporate debtor constitute “property” within the meaning of Section 3(27) of the IBC.
(ii) The Adjudicating Authority had jurisdiction to examine the application on merits and take a decision as to whether the subject land can be treated to be asset of the corporate debtor or not.
(iii) The proceedings conducted by the Sole Arbitrator and the orders passed by the Sole Arbitrator does not amount to an arbitral award under the Arbitration & Conciliation Act, 1996 determining the rights of both the parties so as to bind both the parties in any subsequent proceedings.
(iv) IRP/RP has rightly included the subject land in the Information Memorandum/ CIRP and he was not precluded by virtue of Section 18(f) explanation from asserting development rights in the subject land.

Development rights created in favour of Corporate Debtor constitute ‘property’ within the meaning of Section 3(27) of the IBC and the RP has to include in Information Memorandum the assets in which the corporate debtor has development rights | Adjudicating Authority does not lack jurisdiction in deciding whether development rights are part of the CIRP or it should be excluded and parties need not have to be relegated to the Civil Court – K.H. Khan and Anr. Vs. Art Constructions Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

Whether the payment of interest free Security Deposit as advance for use of the Leased premises falls within the purview of Operational Debt as defined under Section 5(21) of the IBC? – Corob India Pvt. Ltd. Vs. Mr. Birendra Kumar Agrawal RP of Renaissance Indus Infra Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) The Security Deposit had been advanced as interest free Security Deposit. The Security Deposit was never disbursed or deposited against consideration for time value of money. Only in the event of failure to refund the Security Deposit from the date such refund was due that the deposit was to be returned with interest of 18%. It was bereft of all elements of commercial borrowing. Clearly therefore, the present transaction was not disbursement for time value of money and does not fall within the canvas of financial debt as defined under Section 5(8) of the IBC.

(ii) The sum of Security Deposit made in the facts of the present case which was given in the form of advance by the Appellant to the Corporate Debtor for prospective occupation of the leased premises on rent, this deposit was in the nature of advance for use of the premises. Hence, the payment of Security Deposit as advance for use of the Leased premises is clearly included in the “provision of services” and therefore falls within the purview of operational debt.

Whether the payment of interest free Security Deposit as advance for use of the Leased premises falls within the purview of Operational Debt as defined under Section 5(21) of the IBC? – Corob India Pvt. Ltd. Vs. Mr. Birendra Kumar Agrawal RP of Renaissance Indus Infra Pvt. Ltd. – NCLAT New Delhi Read Post »

Development Rights are fully covered by the definition of Property under Section 3(27) of the IBC – Nilesh Sharma RP – Today Homes and Infrastructure Pvt. Ltd. Vs. Mordhwaj Singh and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that the definition under Section 3(27) of the Property is an inclusive definition which obviously includes the Development Rights which was obtained by the Developers from the Owners by Development Agreement dated 03.03.2007 were subsequently assigned to the Corporate Debtor by an Agreement dated 30.07.2010. The Developer was handed over the possession in pursuance of Consent Award dated 05.09 2009.

Development Rights are fully covered by the definition of Property under Section 3(27) of the IBC – Nilesh Sharma RP – Today Homes and Infrastructure Pvt. Ltd. Vs. Mordhwaj Singh and Ors. – NCLAT New Delhi Read Post »

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