CIRP Initiation-Notice/Opportunity to Corporate Debtor

When Corporate Debtor inspite of ample opportunities does not appear and file any defence, such Corporate Debtor cannot be allowed to raise factual issues and question the findings recorded by Adjudicating Authority – Jeevan Birje Parashram Vs. M/s. Kamal Metal Corporation & Anr. – NCLAT New Delhi

/ 7 minutes of reading

In case of Sec. 9 of IBC, the Adjudicating Authority issued notice to the Corporate Debtor and asked the Corporate Debtor to file Reply. Inspite of serving of the notice, the Corporate Debtor did not appear. When again the matter was listed, the Corporate Debtor did not appear. AA thereafter proceeded and passed an order admitting Section 9 Application.
The Corporate Debtor challenged the order that the threshold amount was below Rs. 1 crore as prescribed u/s 4 of IBC.
NCLAT held that when the Corporate Debtor inspite of ample opportunities does not appear and file any defense, we are of the view that such Corporate Debtor cannot be allowed to raise factual issues and question the findings recorded by the Adjudicating Authority. We are of the view that such Corporate Debtor cannot be allowed to now raise factual issue and contend that the claim was less than Rs.1 Crore.

When Corporate Debtor inspite of ample opportunities does not appear and file any defence, such Corporate Debtor cannot be allowed to raise factual issues and question the findings recorded by Adjudicating Authority – Jeevan Birje Parashram Vs. M/s. Kamal Metal Corporation & Anr. – NCLAT New Delhi Read Post »

NCLT dismisses an application under Rule 49(2) of the NCLT Rules, 2016 for setting aside the ex-parte initiation of CIRP – Raj Kumar Vs. M/s Shri Sant Lal and Sons Exports Pvt. Ltd. – NCLT Chandigarh Bench

/ 4 minutes of reading

This application has been filed by the corporate debtor under Rule 49(2) of the NCLT Rules, 2016 for setting aside the ex-parte order dated 07.12.2022 and initiation of CIRP against the corporate debtor.
The Adjudicating Authority held that we note that mostly these judicial decisions are in the context of proceedings in Civil Courts, which are not subject to the strict timelines laid down under the Insolvency and Bankruptcy Code, 2016. As narrated in the abovementioned paragraphs, sufficient opportunity was given to the applicant to represent his case before passing the ex-parte order, the applicant also had an opportunity to prefer an appeal against the order of this Bench before the Hon’ble NCLAT. However, the same has not been done; if the applicants are allowed to take such pleas after the order of initiation of CIRP is passed under the provisions of the Insolvency and Bankruptcy Code, 2016, the process will become endless and will have a very adverse effect on the resolution of the corporate debtor.

NCLT dismisses an application under Rule 49(2) of the NCLT Rules, 2016 for setting aside the ex-parte initiation of CIRP – Raj Kumar Vs. M/s Shri Sant Lal and Sons Exports Pvt. Ltd. – NCLT Chandigarh Bench Read Post »

Summary of Go Airlines insolvency judgement under Section 10 of IBC – Go Airlines (India) Ltd. – NCLT Principal Bench

/ 13 minutes of reading

The Adjudicating Authority admitted the CIRP application u/s 10 of IBC and held that: (i) before the commencement of CIRP, an Application under Sections 7 and 9 are in personam i.e., a litigation between two parties, where notice to the Respondent/Corporate Debtor is a matter of right.
(ii) no express provision in the law, which necessitates the issue of notice or service of a copy of the Section 10 Application to the Creditor(s).
(iii) in Section 10 proceedings, though there is no mandatory requirement of issuing notice to the Creditor(s) at the pre-admission stage, rather giving notice to the Creditor(s) is a matter of discretion to be exercised on a case-to-case basis on valid grounds. Wherever there is a clear apprehension of deterioration of assets of the Corporate Applicant/Debtor and larger public interest is involved, issuance of notice at the pre-admission stage cannot be claimed as a matter of right.
(iv) Section 65 only uses the word “initiates”, and does not make any distinction like the stage of pre-admission or post-admission of CIRP.
(v) Section 65 of IBC can be resorted by an aggrieved party at any stage, be it pre-admission or post-admission. Accordingly, we conclude that there is no bar in entertaining/considering/adjudicating a Section 65 Application after the initiation of the CIRP.
(vi) The IRP also shall ensure that retrenchment of employees is not resorted to as a matter of course. In any event, any such decision/event should be brought to the attention of this Adjudicating Authority.

Summary of Go Airlines insolvency judgement under Section 10 of IBC – Go Airlines (India) Ltd. – NCLT Principal Bench Read Post »

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