PUFE-After Approved Resolution Plan/Successful Resolution Applicant (SRA)

There can be a position regarding the prosecution of avoidance application even after the resolution or closure of liquidation process – Sherisha Technologies Pvt. Ltd. Vs. Shri. S A Prem Kumar and Anr. – NCLT Chennai Bench

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There can be a position regarding the prosecution of avoidance application even after the resolution or closure of liquidation process – Sherisha Technologies Pvt. Ltd. Vs. Shri. S A Prem Kumar and Anr. – NCLT Chennai Bench Read Post »

Can Successful Bidder of Not Readily Realisable Asset (NRRA) be allowed to prosecute the avoidance application pending before NCLT? – Sherisha Technologies Pvt. Ltd. Vs. Shri. S A Prem Kumar and Ors. – NCLT Chennai Bench

The Hon’ble NCLT Chennai Bench held that the same analogy as in Kapil Wadbawan (2023) ibclaw.in 320 NCLAT shall be applicable with regard to the prosecution by the Successful Auction Purchaser in liquidation estate when the asset of the corporate debtor has been sold as a going concern and acquisition plan submitted by Successful Auction Purchaser has been approved by the Adjudicating Authority. Hence, the substitution of the successful bidder of NRRA in the avoidance application can be allowed to give effect to provisions of the Code.

Can Successful Bidder of Not Readily Realisable Asset (NRRA) be allowed to prosecute the avoidance application pending before NCLT? – Sherisha Technologies Pvt. Ltd. Vs. Shri. S A Prem Kumar and Ors. – NCLT Chennai Bench Read Post »

Whether Resolution Professional ceases to have any authority after approval of Resolution Plan to file an application for avoidance of transactions under the IBC – Mr. Ram Ratan Kanoongo Vs. Mr. Pramod Goenka and Ors. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench held that the timelines under Regulation 35A are directory and not mandatory in nature. Section 25(2)(j) of the Code mandates the Resolution professional to file application for avoidance of transactions in accordance with Chapter III, if any. The Resolution Professional becomes functus officio after the approval of plan and he ceases to have authority to file any fresh application under the Code, except to prosecute the applications already pending before this Tribunal prior to approval of the Resolution Plan or before appellate authorities in relation to such pending application before this Tribunal or pending thereat at the time of approval of Resolution Plan.

Whether Resolution Professional ceases to have any authority after approval of Resolution Plan to file an application for avoidance of transactions under the IBC – Mr. Ram Ratan Kanoongo Vs. Mr. Pramod Goenka and Ors. – NCLT Mumbai Bench Read Post »

Adjudicating Authority can permit the Resolution Applicant to pursue the application filed under Sections 43, 45, 46, 66 & 67 of the IBC – Kashyap Mehta Vs. Kabra Estate and Investment Consultants – NCLAT New Delhi

Hon’ble NCLAT holds that the issue raised by the Appellant is fully covered by the Judgment in Kapil Wadhawan v. Piramal Capital & Housing Finance Ltd. & Ors. (2023) ibclaw.in 320 NCLAT. After noticing the Scheme of the regulation it has been held that Adjudicating Authority can permit the Resolution Applicant to pursue the Application filed under Sections 43, 45, 46, 66 & 67. No error can be found in the Order impugned passed by the Adjudicating Authority. The Appeal is dismissed.

Adjudicating Authority can permit the Resolution Applicant to pursue the application filed under Sections 43, 45, 46, 66 & 67 of the IBC – Kashyap Mehta Vs. Kabra Estate and Investment Consultants – NCLAT New Delhi Read Post »

Whether CIRP cost determined by Resolution Professional is required any approval of CoC under Sec. 28 of IBC | The determination & payment of CIRP cost is an independent process from any recovery under avoidance applications | After approval of Resolution Plan, Adjudicating Authority is fully empowered to any direction or assign CoC to pursue avoidance applications under Sec. 43, 45, 49 & 66 of the Code – Mehul Parekh and Ors. v. Unimark Remedies and Ors. – NCLAT New Delhi

In this landmark judgment, Hon’ble NCLAT held that:
(i) When the Plan has been approved by the CoC, which included payment of the CIRP cost and it is not shown that CIRP cost determined by the Resolution Professional required any approval under Section 28, we fail to see any reason for redetermination of the CIRP cost by the CoC. The direction to CoC to redetermine the CIRP cost after approval of the Resolution Plan by the CoC is unsustainable.
(ii) The determination of CIRP cost and payment of CIRP cost to those who found entitled to receive the payments is an independent process from any recovery from Promoters/ KMPs, consequent to avoidance application filed by Resolution Professional under the provisions of the Code, including Section 66 of the Code.
(iii) After approval of the Resolution Plan, the Adjudicating Authority is fully empowered to issue any direction, as to how the avoidance applications has to be pursued and direction to pursue the avoidance applications by the CoC as issued therein is fully justifiable.

Whether CIRP cost determined by Resolution Professional is required any approval of CoC under Sec. 28 of IBC | The determination & payment of CIRP cost is an independent process from any recovery under avoidance applications | After approval of Resolution Plan, Adjudicating Authority is fully empowered to any direction or assign CoC to pursue avoidance applications under Sec. 43, 45, 49 & 66 of the Code – Mehul Parekh and Ors. v. Unimark Remedies and Ors. – NCLAT New Delhi Read Post »

Onerous responsibility of pursuing avoidance applications on Resolution Professional | CIRP and avoidance applications are a separate set of proceedings | Avoidance applications can continue even after completion of CIRP and approval of the resolution plan does not need to be put on hold – Ms. Amita Saurabh Bihani and Ors. v. E&G Global Estates Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) The statutory construct of IBC clearly puts the onerous responsibility of pursuing avoidance applications on the RP. In terms of Section 25(2)(j) of the IBC, it is the duty of the RP to file appropriate applications for avoidance of transactions which fall under the ambit of preferential, fraudulent, undervalued or extortionate transactions.
(ii) CIRP and avoidance applications are, thus by their very nature, a separate set of proceedings. The scheme of the IBC reinforces this difference and thus adjudication of an avoidance application is independent of the resolution of the corporate debtor and can survive CIRP.
(iii) Simply because the Appellants have raised the issue of avoidance application, it does not stand to reason that the approval of the resolution plan needs to be put on hold or kept in abeyance.

Onerous responsibility of pursuing avoidance applications on Resolution Professional | CIRP and avoidance applications are a separate set of proceedings | Avoidance applications can continue even after completion of CIRP and approval of the resolution plan does not need to be put on hold – Ms. Amita Saurabh Bihani and Ors. v. E&G Global Estates Ltd. and Ors. – NCLAT New Delhi Read Post »

Whether Successful Auction Purchaser can prosecute the avoidance application after approval of the acquisition plan – Kunwer Sachdev Vs. Su-Kam Power Systems Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) It is the Resolution Professional or Liquidator who are empowered to come to opinion and file an application for avoidance of the transaction.
(ii) Any assets or their value recovered through proceedings for avoidance of transactions shall form the liquidation estate. There can be no dispute to this legal position that proceeds of the avoidance application are part of the liquidation estate.
(iii) The Regulation 44A deals with treatment of transaction avoidance which itself contemplates that there can be a position regarding prosecution of avoidance application even after resolution or closure of liquidation process and the manner in which the proceeds, if any, from such proceedings shall be distributed.
(iv) In the present case it is not a case that avoidance application has been filed by the Successful Auction Purchaser, The Insolvency Law Committee Report does not in any manner help the Appellant.
(v) The issue as to whether the Successful Auction Purchaser can prosecute the avoidance application in place of Resolution Professional by substituting its name was not subject matter of the issue in the aforesaid case of 63 Moons Technologies Ltd. (2022) ibclaw.in 95 NCLAT hence we are of the view that on the ground that civil appeal is pending before the Hon’ble Supreme Court, hearing of the matter need not be deferred.

Whether Successful Auction Purchaser can prosecute the avoidance application after approval of the acquisition plan – Kunwer Sachdev Vs. Su-Kam Power Systems Ltd. – NCLAT New Delhi Read Post »

Can a Secured Creditor withhold the amount received under an Insurance Policy after the date of approval of the Resolution plan? – SMC Infrastructures Pvt. Ltd. Vs. State Bank of India – NCLT Hyderabad Bench

The Bank submitted that the policy amount was payable prior to initiation of the CIRP process but was only remitted post approval of Rplan. Resolution Professional failed to collect and monitor the Policy, as a result, it did not reflect in the assets of the Corporate Debtor and the SRA bid for the company without taking the amount into consideration. The CoC also approved the plan without having any knowledge about this amount. Surrender of policy and payments due occurred prior to approval of the Resolution Plan, therefore, the Bank being a secured creditor is entitled to the amount.
NCLT Hyderabad Bench held that any money with the third parties like creditors in form of security deposits, margin moneys, term deposit receipts or retention money will be released to corporate debtor. Further this amount can be considered as retention money also as this was retained by insurance company on account of lock in period clause in the Insurance Policy. From the above it is very clear that the amount payable by the insurance company belongs to the corporate debtor and the corporate debtor which is under the new management is entitled for the same. Further in terms of the approved resolution plan there is no such clause which provides for payments of receivables to the creditors.

Can a Secured Creditor withhold the amount received under an Insurance Policy after the date of approval of the Resolution plan? – SMC Infrastructures Pvt. Ltd. Vs. State Bank of India – NCLT Hyderabad Bench Read Post »

Successful Resolution Applicant (SRA) is not accountable for non-compliance of MCA filing by Corporate Debtor or its Promoters/Director prior to insolvency commencement date, No penalty or interest can be fastened to Corporate Debtor under the new management – Skyhigh Infraland Pvt. Ltd. Vs. Monitoring Committee of Corporate Debtor- NCLT Chandigarh Bench

In this case, Successful Resolution Applicant(SRA) represented before the RoC, Haryana for removal of the earlier Directors and the appointment of new Directors. When the applicant approached the office of RoC Haryana, it was informed that the SRA must file annual previous returns and balance sheets failing which the Corporate Debtor would continue to remain in default of its statutory obligations.
NCLT Chandigarh Bench held that:
(i) Not to hold the present management of the corporate debtor accountable for the default committed by the corporate debtor or its promoters/director prior to insolvency commencement date.
(ii) Allow the applicant to file the returns and the financial statements as required under the provisions of the Companies Act 2013 and other related acts
(iii) If the returns/statements by the new management of the corporate debtor cannot be accepted online through e-filing due to technological issues, the same be accepted in the physical mode
(iv) No penalty or interest arising out of the default committed by the erstwhile management prior to 29.10.2018 can be fastened to the present corporate debtor under the new management.

Successful Resolution Applicant (SRA) is not accountable for non-compliance of MCA filing by Corporate Debtor or its Promoters/Director prior to insolvency commencement date, No penalty or interest can be fastened to Corporate Debtor under the new management – Skyhigh Infraland Pvt. Ltd. Vs. Monitoring Committee of Corporate Debtor- NCLT Chandigarh Bench Read Post »

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