CIRP/Liquidation Process-Recovery from Debtors

Under Section 19(2) of IBC, Adjudicating Authority cannot direct Suspended Board to contribute to Corporate Debtor to the extent the money is not paid by Sundry Debtors of Corporate Debtor – Mr. Mahesh Sureka RP Vs. Minesh Prints Ltd. and others – NCLT Mumbai Bench

The Resolution Professional is seeking directions for cooperation from the Sundry Debtors and the Suspended Directors in realisation of debts owed by the Sundry Debtors to the Corporate Debtor for goods sold to them prior in time.
NCLT Mumbai Bench holds that such directions are not permissible under section 19(2) and this Bench cannot direct them to co-operate. Had this Application been filed in terms of Section 66 of the Code meeting the conditions precedent provided therein, this Bench could have assumed jurisdiction to consider the prayer of the Application, if such prayer would otherwise be permissible under that Section.
The RP has lien over such Goods as “Unpaid Seller” in terms of Provisions contained in Section 47 of Sale of Goods Act, 1930. Accordingly, no specific direction is necessary from NCLT for Sunday Debtors.

Under Section 19(2) of IBC, Adjudicating Authority cannot direct Suspended Board to contribute to Corporate Debtor to the extent the money is not paid by Sundry Debtors of Corporate Debtor – Mr. Mahesh Sureka RP Vs. Minesh Prints Ltd. and others – NCLT Mumbai Bench Read Post »

NCLT permits the Liquidator to initiate Arbitral proceedings and related or ancillary or contingent proceedings for the recovery of the outstanding dues – Mr. Abhijit Guhathakurta, Liquidator of EPC Construction (India) Ltd. – NCLT Mumbai Bench

In this case, an IA filed by Liquidator to initiate recovery proceedings.

NCLT Mumbai Bench has permitted Liquidator to initiate Arbitral proceedings and related or ancillary or contingent proceedings against Matix Fertilizers and Chemicals Limited in respect of the EPC contract dated 29.07.2010, Onshore Contract dated 29.07.2010 and Offshore Contract dated 20.08.2010 for the recovery of the outstanding dues.

NCLT permits the Liquidator to initiate Arbitral proceedings and related or ancillary or contingent proceedings for the recovery of the outstanding dues – Mr. Abhijit Guhathakurta, Liquidator of EPC Construction (India) Ltd. – NCLT Mumbai Bench Read Post »

No TDS deduction in case the payment to Corporate Debtor during the liquidation process – Mr. Vinod Balachandran, Liquidator of Albanna Engineering (India) Pvt. Ltd. Vs. Bharat Petroleum Corporation Ltd. – NCLT Kochi Bench

NCLT Kochi Bench referred the decision of Hon’ble NCLAT in Om Prakash Agrawal Liquidator Vs. Chief Commissioner of Income Tax (TDS) (2021) ibclaw.in 54 NCLAT and held that:
(i) There is no such provision in the IT Act, IBC or IBBI (Liquidation Process) Regulation, 2016 that the Liquidator of the Company in Liquidation under the IBC is required to file Income Tax Return.
(ii) For filing of the return, the financial statements are required to be annexed but the IBC and IBBI (Liquidation Process) Regulation, 2016 does not assign a duty on the Liquidator to prepare financial statements.
(iii) Direct the 1st Respondent to make a payment of Rs. 9,01,18,242.45/- to the bank account of the Applicant/Liquidator within 30 days from the date of receipt of this order.

No TDS deduction in case the payment to Corporate Debtor during the liquidation process – Mr. Vinod Balachandran, Liquidator of Albanna Engineering (India) Pvt. Ltd. Vs. Bharat Petroleum Corporation Ltd. – NCLT Kochi Bench Read Post »

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench

In this case, IA was filed by RP for recovery of due to the Corporate Debtor.
NCLT Jaipur Bench held that:
(i) The duties imposed upon the RP/IRP does not entitle the Adjudicating Authority to exercise jurisdiction in matters where recovery of a particular amount is sought on behalf of the Corporate Debtor. For adjudication of disputes and recovery of sums the RP is empowered to approach relevant competent authorities.
(ii) The Resolution Professional in the present matter had approached this forum for recovery of debt which is allegedly owed by the Respondent No. 2 to the Corporate Debtor whereas it has forgotten the underlying principle which enunciates that this is not a debt recovery forum.
(iii) There is no doubt that the Resolution Professional has ample powers to proceed and protect the debts of the Corporate Debtor, but it cannot do so by merely filing an Application under Section 60(5) of the Code in the pending CIRP of the Corporate Debtor.
(iv) The Adjudicating Authority does not have the jurisdiction to allow the Application filed by the Resolution Professional.

Adjudicating Authority does not have the jurisdiction to allow an application filed by RP for recovery of debt due to the Corporate Debtor – Mr. Ajit Kumar RP For Jadoun International Pvt. Ltd. Vs. Kanak Marbles & Granites Pvt. Ltd. and Suspended Board of Director Represented Through Mr. Sourabh Singh Jadoun – NCLT Jaipur Bench Read Post »

No interest can be charged from Trade Receivable(Debtor) in absence of evidence to justify the charging of interest on the amounts outstanding for the supply of goods by the Corporate Debtor – Mr. Sumat Gupta, RP of M/s. Vallabh Textiles Company Ltd. Vs. M/s. Bansal Yarns Pvt. Ltd. – NCLT Chandigarh Bench

In this case, an application has been filed by the RP seeking direction to the respondent to pay the Corporate Debtor an amount of Rs. 22,30,093/- along with interest @ 15% P.A. of Rs. 10,62,930/- upto the date of payment. The Adjudicating Authority held that the impugned amount of Rs. 22,30,093/- is an asset of a corporate debtor as on the date of initiation of CIRP and is to be taken into custody and control of the Resolution Professional as per the provisions of Section 25 of the Code. We, however, do not accede to the prayers of the Resolution Professional that interest of the said amount be allowed to be paid to the corporate debtor as no evidence was placed before us during the proceedings to justify the charging of interest on the amounts outstanding for the supply of goods by the corporate debtor.

No interest can be charged from Trade Receivable(Debtor) in absence of evidence to justify the charging of interest on the amounts outstanding for the supply of goods by the Corporate Debtor – Mr. Sumat Gupta, RP of M/s. Vallabh Textiles Company Ltd. Vs. M/s. Bansal Yarns Pvt. Ltd. – NCLT Chandigarh Bench Read Post »

The remedy against third party is not available under Section 66 of IBC, and the civil remedies which may be available in law, are independent of the said Section – Gluckrich Capital Pvt. Ltd. Vs. The State of West Bengal & Ors. – Supreme Court

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The remedy against third party is not available under Section 66 of IBC, and the civil remedies which may be available in law, are independent of the said Section – Gluckrich Capital Pvt. Ltd. Vs. The State of West Bengal & Ors. – Supreme Court Read Post »

Whether the Adjudicating Authority has the powers to pass Orders under Section 60(5)(b) of the Code for recovery of amounts by the Corporate Debtor against its Sundry Debtors – Shri Ramachandra D. Choudhary RP of M/s. Oasis Tradelink Ltd. Vs. Bansal Trading Company – NCLAT New Delhi

The only point which is to be examined is whether the Adjudicating Authority was justified in dismissing the Applications preferred by the Liquidator as not maintainable. Keeping in view the ratio in Gujarat Urja Vikas Nigam Ltd. Vs. Mr. Amit Gupta (2021) ibclaw.in 44 SC, NCLAT held that the remedy for recovery of debts, disputed or not, cannot be determined in summary proceedings and the Code does not contemplate adjudication of any such nature. Any such steps taken under Section 60(5) of the Code before the Adjudicating Authority, would tantamount to bypassing/short-circuiting the Judicial Proceedings. The Appellant is well within its powers to take appropriate steps to file legal proceedings, if the circumstances so warrant. The Code expressly provides for the Liquidator to institute or defend any Suit, Prosecution or other Legal Proceedings, Civil or Criminal, in the name or on behalf of the Corporate Debtor.

Whether the Adjudicating Authority has the powers to pass Orders under Section 60(5)(b) of the Code for recovery of amounts by the Corporate Debtor against its Sundry Debtors – Shri Ramachandra D. Choudhary RP of M/s. Oasis Tradelink Ltd. Vs. Bansal Trading Company – NCLAT New Delhi Read Post »

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