CIRP Initiation-Suspension of CIRP [Sec. 10A]

Is an application under Section 7 of the IBC maintainable against the interest portion only? – Piramal Capital & Housing Finance Ltd. Vs. Sunblink Real Estate Pvt. Ltd. – NCLT Mumbai Bench

The Hon’ble NCLT Mumbai Bench held that the present petition has been filed on the basis of default in payment of interest on the amounts due arising for the period after the 10A period in terms of clause 4.1 and 4.2 of Loan Agreement. The said amount in default is in excess of Rs. 1.00 crores and default is stated to have taken place on 12.02.2024 i.e. after 15 working days subsequent to the issuance of the Demand Notice dated 25.01.2024. There has been a financial debt in respect of which default has been committed by the Corporate Debtor and further that the Application has been filed within the period of limitation. Therefore, the Application u/s 7 of the Code, deserves to be admitted.

Is an application under Section 7 of the IBC maintainable against the interest portion only? – Piramal Capital & Housing Finance Ltd. Vs. Sunblink Real Estate Pvt. Ltd. – NCLT Mumbai Bench Read Post »

Date of default in case of an application under Section 7 filed on based of a Consent Decree passed by the DRT – Jubin Kishore Thakkar, Suspended Directors of KLT Automotive & Tubular Products Ltd. Vs. Phoenix ARC Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that Section 7 Application having been founded on the basis of default committed after Consent Decree dated 29.08.2022 was passed, Default cannot be pegged on 10A period when Application under Section 7 is founded on the basis of Consent Decree dated 29.08.2022.

Date of default in case of an application under Section 7 filed on based of a Consent Decree passed by the DRT – Jubin Kishore Thakkar, Suspended Directors of KLT Automotive & Tubular Products Ltd. Vs. Phoenix ARC Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

The date of default cannot be shifted by a recall notice issued by the Financial Creditor – Sandip Narendrakumar Patel (Promotor/Ex-Director) Yours Ethnic Foods Pvt. Ltd. Vs. Svakarma Finance Pvt. Ltd. and Anr. – NCLAT New Delhi

Hon’ble NCLAT held that the Corporate Debtor cannot be permitted to take advantage of the fact that the Financial Creditor had issued a notice of recall dated 06.11.2020, giving 15 days time, to the Corporate Debtor to pay the same and to calculate the date of default as 21.11.2020 which falls within the cut off period of Section 10A because issuance of recall notice, in pursuance of the clause 10.3 of the agreement, was on the occurrence of any of the events of default, which had already occurred in the month of January or at the most February.

The date of default cannot be shifted by a recall notice issued by the Financial Creditor – Sandip Narendrakumar Patel (Promotor/Ex-Director) Yours Ethnic Foods Pvt. Ltd. Vs. Svakarma Finance Pvt. Ltd. and Anr. – NCLAT New Delhi Read Post »

Can CIRP be initiated against a Stock Broker Company, which is a Financial Service Provider under Section 3(16)(e), if, at the time of initiation of CIRP, the Stock Broker is not engaged in providing financial services due to SEBI restrictions prohibiting it from accepting new clients for its stockbroking activities? – Kapston Facilities Management Ltd. Vs. Karvy Stock Broking Ltd. – NCLT Hyderabad Bench

In this case, Operational Creditor submitted that the Corporate Debtor was not dealing in the business of providing financial services at the time of initiation of the present petition in view of ad-interim ex-parte order issued by SEBI, which prohibited the CD from accepting new clients for its stockbroking activities.

The Hon’ble NCLT held that this contention of the Applicant is meritless because SEBI’s restrictions were limited to prohibiting the CD from taking on new clients for stockbroking activities. As per the Certificate of Registration issued by SEBI, it is explicitly stated that the Certificate remains valid unless it is suspended or cancelled in accordance with the regulations.

Can CIRP be initiated against a Stock Broker Company, which is a Financial Service Provider under Section 3(16)(e), if, at the time of initiation of CIRP, the Stock Broker is not engaged in providing financial services due to SEBI restrictions prohibiting it from accepting new clients for its stockbroking activities? – Kapston Facilities Management Ltd. Vs. Karvy Stock Broking Ltd. – NCLT Hyderabad Bench Read Post »

No application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period – Office Beanz Pvt. Ltd. – NCLAT New Delhi

The mere fact that the observation of the Hon’ble Supreme Court in Ramesh Kymal Vs. Siemens Gamesa Renewable Power Pvt. Ltd. (2021) ibclaw.in 08 SC that debt owed by the Corporate Debtor is not extinguished is the law declared by the Hon’ble Supreme Court, but their being clear prohibition for filing an application under Section 7, 9 and 10, for default occurring in 10A period there is apparent case.

No application can be filed, even after expiry of the period under Section 10A for the default which occurred during the 10A period – Office Beanz Pvt. Ltd. – NCLAT New Delhi Read Post »

An OTS agreement cannot extend the date of default – Samrat Restaurant Vs. Brewcrafts Microbrewing Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) The date of default and acknowledgment are two different events. The date of default is not dependent on the date of acknowledgement
(ii) The purpose of Section 10A was to prevent companies from being pushed into insolvency due to temporary financial distress caused by the COVID-19 pandemic.
(iii) The Appellant’s interpretation that subsequent agreements should nullify the protection offered by Section 10A would undermine the legislative intent and open the door for Creditors to circumvent the protections offered by law.

An OTS agreement cannot extend the date of default – Samrat Restaurant Vs. Brewcrafts Microbrewing Pvt. Ltd. – NCLAT New Delhi Read Post »

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