Other-Consortium of Banks/Creditors/Joint Lenders Forum

If security trustees are holding Security on behalf of Lender, the Lenders can enforce the security documents even if they are not a party to the trusteeship agreement | Section 100 (2) of IBC is applicable if repayment plan is prepared by the debtor under Section 105 of the Code then opportunity should be offered to the debtor | Is a notice of demand under Section 13(2) of the SARFAESI Act an invocation of personal guarantee? – Shantanu Jagdish Prakash Vs. State Bank of India – NCLAT New Delhi

/ 43 minutes of reading

The Hon’ble NCLAT held that:
(i) From the terms of the Master Restructuring Agreement (MRA) and the Security Trustee Agreement (STA), it is clear that the security trustees are holding ‘Security’ not for themselves, but on behalf of, and for the benefit of, the Claimant/Lender. The Lenders, can therefore, enforce the security documents even if they are not a party to the trusteeship agreement.’
(ii) NCLAT does not appreciate the arguments of the Appellant on this account based on argument that mere fact that the case is pending before the DRT and certain counter claims have been filed by the Appellant will not make debts payable by the Appellant as debts not have been crystalised.
(iii) Section 100 (2) of IBC is applicable if repayment plan is prepared by the debtor under Section 105 of the Code then opportunity should be offered to the debtor.

If security trustees are holding Security on behalf of Lender, the Lenders can enforce the security documents even if they are not a party to the trusteeship agreement | Section 100 (2) of IBC is applicable if repayment plan is prepared by the debtor under Section 105 of the Code then opportunity should be offered to the debtor | Is a notice of demand under Section 13(2) of the SARFAESI Act an invocation of personal guarantee? – Shantanu Jagdish Prakash Vs. State Bank of India – NCLAT New Delhi Read Post »

Report of RP under Section 99 of IBC, 2016 is purely recommendatory in nature and cannot bind the Adjudicating Authority – Bank of Baroda Vs. Mr. Bharat Raj Punj – NCLT Allahabad Bench

/ 6 minutes of reading

In this judgment, following issues are covered:
A. A proceeding against a personal guarantor
B. Personal Guarantor resigned from the post of Managing Director
C. Guarantee is conditional and it is limited to the value of the assets inherited by him
D. Insolvency Petition filed by the Financial Creditor Bank of Baroda unilaterally without taking any approval from the Consortium of Banks
E. Report submitted by the RP is purely recommendatory in nature and cannot bind the Adjudicating Authority
F. The role of the Adjudicating Authority in personal insolvency
G. Personal Guarantor to have been given opportunity by a issuance of notice to him before the appointment of the RP
H. Conclusion

Report of RP under Section 99 of IBC, 2016 is purely recommendatory in nature and cannot bind the Adjudicating Authority – Bank of Baroda Vs. Mr. Bharat Raj Punj – NCLT Allahabad Bench Read Post »

Financial Creditor has initiated proceedings before the DRT does not preclude them to take remedy under Section 7 of IBC – Pawan Kumar Vs. Central Bank of India and Ors. – NCLAT New Delhi

/ 13 minutes of reading

The Hon’ble NCLAT held that it is well settled law that the fact that Financial Creditor has initiated proceedings before the DRT does not preclude them to take remedy under Section 7, which is a special remedy provided under the IBC.

Financial Creditor has initiated proceedings before the DRT does not preclude them to take remedy under Section 7 of IBC – Pawan Kumar Vs. Central Bank of India and Ors. – NCLAT New Delhi Read Post »

Is a Section 95 application to initiate insolvency proceedings against a Personal Guarantor required to be filed collectively if the credit facility has been extended by more than one Financial Creditor/ Consortium? – Amit Dineshchandra Patel Vs. State Bank of India and Anr. – NCLAT New Delhi

/ 31 minutes of reading

Hon’ble NCLAT held that:

(i) The decision in Rakshit Dhirajlal (2022) ibclaw.in 932 NCLAT is not applicable in the present case since in this case there is no dispute inter se between the members of the consortium which had joined hands in signing the Security Trustee Agreement. None of the members of the consortium have raised any objection on the authority of Bank to file the Section 95 application.
(ii) Section 95 of IBC nowhere lays down any prescription that if the credit facility has been extended by more than one financial creditor, the Section 95 application is required to be filed collectively.

Is a Section 95 application to initiate insolvency proceedings against a Personal Guarantor required to be filed collectively if the credit facility has been extended by more than one Financial Creditor/ Consortium? – Amit Dineshchandra Patel Vs. State Bank of India and Anr. – NCLAT New Delhi Read Post »

On account of non-payment of liquidation costs, security interest of the Secured Creditor stood relinquished in terms of Liquidation Regulation 21A (2) &(3)? – Suraksha Asset Reconstruction Ltd. Vs. Varsha Bagri, Liquidator of Bharat NRE Coke Ltd. – NCLAT New Delhi

/ 22 minutes of reading

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On account of non-payment of liquidation costs, security interest of the Secured Creditor stood relinquished in terms of Liquidation Regulation 21A (2) &(3)? – Suraksha Asset Reconstruction Ltd. Vs. Varsha Bagri, Liquidator of Bharat NRE Coke Ltd. – NCLAT New Delhi Read Post »

Section 95 of IBC is nowhere provided that if there are more Financial Creditors (consortium of banks) then all have to file collectively the application for initiation of Insolvency against Personal Guarantor – Dheeraj Wadhawan Vs. Union Bank of India and Anr. – NCLAT New Delhi

/ 19 minutes of reading

Hon’ble NCLAT held that it is also well settled that the objection regarding the maintainability of the application or suit/petition has to be raised at the threshold and cannot be taken at the fagend of the matter when the application was about to be admitted. As far as Section 95 is concerned, it is categorically provided that application can file either by himself, or jointly with other creditors, or through a resolution professional but it is nowhere provided that if there are more financial creditors then all have to file the same collectively.

Section 95 of IBC is nowhere provided that if there are more Financial Creditors (consortium of banks) then all have to file collectively the application for initiation of Insolvency against Personal Guarantor – Dheeraj Wadhawan Vs. Union Bank of India and Anr. – NCLAT New Delhi Read Post »

Base Resolution Plan under Pre-Packaged Insolvency Resolution Process (PPIRP) can be submitted by a Corporate Applicant individually or jointly with any other person | There is no occasion for consideration of Base Resolution Plan at the time of consideration of application under Section 54C of IBC for admission or rejection – Garodia Chemicals Ltd. – NCLAT New Delhi

/ 31 minutes of reading

In the present case, the Adjudicating Authority has rejected 54C Application after entering into the merits of the Base Resolution Plan, which is not contemplated by statutory Scheme.

Hon’ble NCLAT held that:
(i) Base Resolution Plan has been given no finality, nor it is a Resolution Plan, which ultimately is required to be approved. Base Resolution Plan can be rejected by the CoC on valid reasons and fresh Resolution Applicants can be invited and approval of the Resolution Plan by Adjudicating Authority arises only after approval of Plan by the CoC under Section 54K.
(ii) The statutory Scheme, thus, clearly indicates that there is no occasion for consideration of Base Resolution Plan at the time of consideration of Application under Section 54C for admission or rejection.
(iii) Base Resolution Plan can very well be submitted by a Corporate Applicant individually or jointly with any other person.

Base Resolution Plan under Pre-Packaged Insolvency Resolution Process (PPIRP) can be submitted by a Corporate Applicant individually or jointly with any other person | There is no occasion for consideration of Base Resolution Plan at the time of consideration of application under Section 54C of IBC for admission or rejection – Garodia Chemicals Ltd. – NCLAT New Delhi Read Post »

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