Our Case Citation

Byju’s Insolvency Case: Granting of the License for Advertisement and Promotional rights itself amounts to providing of services and falls within the definition of Operational Debt within the meaning of Section 5(21) of the IBC – The Board of Control for Cricket In India (BCCI) Vs. Think & Learn Pvt. Ltd. – NCLT Bengaluru Bench

(2024) ibclaw.in 611 NCLT IN THE NATIONAL COMPANY LAW TRIBUNALBengaluru Bench The Board of Control for Cricket In Indiav.Think & […]

Byju’s Insolvency Case: Granting of the License for Advertisement and Promotional rights itself amounts to providing of services and falls within the definition of Operational Debt within the meaning of Section 5(21) of the IBC – The Board of Control for Cricket In India (BCCI) Vs. Think & Learn Pvt. Ltd. – NCLT Bengaluru Bench Read Post »

There is nothing in the IBC to negate that position of CGST Act being treated as Secured Debt | Operational/Dissenting Financial Creditors cannot be paid NIL value merely the Liquidation Value is NIL for them – Sandip Kumar Kejriwal RP of Indian Mining Works Pvt. Ltd. – NCLT Kolkata Bench

Hon’ble NCLT Kolkata Bench held that:
(i) The legislative intent to provide the word “not less than” in the first line of Section 30(2)(b) of the I&B Code is contemplating a mandatory allocation to the operational creditors and the dissenting financial creditors and the allocation would be the amount provided in the resolution plan or liquidation value whichever is higher.
(ii) The Adjudicating Authority has been established to function as a mere rubber stamp affixing authority to allow all the commercial decisions of the CoC, wherein the irregularities or illegalities committed by the CoC, or the insinuating circumstances are galore.
(iii) A resolution plan that is violative or non-compliant to the provisions of Section 30(2) read with Section 31(1) can be rejected under Section 30(2) of the I&B Code, though the plan has been approved by the CoC under its commercial wisdom.
(iv) The plan also has not allocated any sum to the CGST Department (Government of India) when they are actual creditors in terms of Section 82 of the CGST Act.

There is nothing in the IBC to negate that position of CGST Act being treated as Secured Debt | Operational/Dissenting Financial Creditors cannot be paid NIL value merely the Liquidation Value is NIL for them – Sandip Kumar Kejriwal RP of Indian Mining Works Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Claim for interest being a disputed fact can only be adjudicated by a court of competent jurisdiction, initiation of CIRP is certainly not an answer – Bajrang Steel Trading Company (India) Pvt. Ltd. Vs. Ramkrishna Engineering Pvt. Ltd. – NCLAT New Delhi

(2024) ibclaw.in 409 NCLAT IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNALPrincipal Bench, New Delhi Bajrang Steel Trading Company (India) Pvt.

Claim for interest being a disputed fact can only be adjudicated by a court of competent jurisdiction, initiation of CIRP is certainly not an answer – Bajrang Steel Trading Company (India) Pvt. Ltd. Vs. Ramkrishna Engineering Pvt. Ltd. – NCLAT New Delhi Read Post »

Whether, after approval of Resolution Plan and issuance of LoI, an Unsuccessful Resolution Applicant can question the conduct of the Committee of Creditors(CoC) and challenge Resolution Plan of Successful Resolution Applicant(SRA) – Dhansagar Dealers Pvt. Ltd. Vs. Mr. Anubrata Gangoly, RP of Carnation Industries Ltd. – NCLT Kolkata Bench

In this important judgment, while approving resolution plan in the matter of Carnation Industries Ltd., Bench of Kolkata NCLT comprising of Ms. Bidisha Banerjee and Shri Arvind Devanathan, has held that:

(i) Any modifications or revisions of any plan after the approval of the plan by the CoC, even if undertaken as per directions of the CoC, shall not be entertained unless the CoC grants the subsequent approval.
(ii) An unsuccessful resolution applicant has no vested right to challenge the approval of a resolution plan.
(iii) The approval of Resolution Plan falls within the arena of “commercial wisdom” which cannot be questioned unless there is a violation of law as enshrined under Sections 30(2) and 31 of the I&B Code.
(iv) Once a resolution applicant fails to succeed in the bid, it neither has a locus to question the action of the stakeholders qua members sitting in and controlling the CoC, nor the right to enhance or revise the monetary value of its Resolution Plan to compete with the plan of the Successful Resolution Applicant.

Whether, after approval of Resolution Plan and issuance of LoI, an Unsuccessful Resolution Applicant can question the conduct of the Committee of Creditors(CoC) and challenge Resolution Plan of Successful Resolution Applicant(SRA) – Dhansagar Dealers Pvt. Ltd. Vs. Mr. Anubrata Gangoly, RP of Carnation Industries Ltd. – NCLT Kolkata Bench Read Post »

Even Resolution Plan provides the payment of liabilities under sub-judice or under dispute at the time of approval of Resolution Plan, if no claim was filed within the time limit during CIRP, the same cannot be entertained post approval – MBL Infrastructure Ltd. and Anr. Vs. Employees State Insurance Corporation and Ors. – NCLT Kolkata Bench

In this case, Resolution Plan provides that payment of liabilities of the Corporate Debtor which arises out of matters which are sub judice or under dispute at the time of approval of resolution plan is to be made over a period of 7 years up to the final judgment is delivered in the sub judice matter without any interest or penalty thereon. Further the plan provides that all amounts will be paid after proper reconciliation and without prejudice to legal remedies available to the corporate debtor.

Hon’ble NCLT Kolkata Bench held that it is not the case of the respondent that the books of the corporate debtor carried this liability as a “confirmed liability”. Nothing has been placed on record to suggest that resolution professional who prepared the Information Memorandum had prior knowledge of this liability from the books of accounts. In view of above, any claim not filed prior to the approval of the resolution plan cannot be entertained.

Even Resolution Plan provides the payment of liabilities under sub-judice or under dispute at the time of approval of Resolution Plan, if no claim was filed within the time limit during CIRP, the same cannot be entertained post approval – MBL Infrastructure Ltd. and Anr. Vs. Employees State Insurance Corporation and Ors. – NCLT Kolkata Bench Read Post »

To quantify the nature of a debt arising out of monetary transactions, an agreement in explicit is required to determine the real nature of the transaction to classify whether it is a Financial Debt or an Operational Debt, more so to determine the date of default – Gokul Sai Udyog LLP Vs. Katyayni Contractors Pvt. Ltd. – NCLT Kolkata Bench

In this case, the applicant claims to be a financial creditor relying on a resolution passed in the partner’s meeting of the LLP.

Hon’ble NCLT Kolkata Bench observed that:
(i) The purported resolution document dated 11.05.2017, contains a GSTIN number when GST was not in force, we cannot place reliance on this document. This is because the GST Acts came into effect only from 01.07.2017.
(ii) The Respondent, in its Balance sheet has shown it under the head “other payable’’ and not under “Borrowings”.
(iii) In the absence of any formal written agreement or any other evidence, we are unable to decide whether the debt owed by the Corporate Debtor is an operational debt or a financial debt particularly when the books of the corporate debtor deals with the debt in question as “other payable” and not as “borrowings”.
(iv) to quantify the nature of a debt arising out of monetary transactions, an agreement in explicit is required to determine the real nature of the transaction to classify whether it is a financial debt or an operational debt, more so to determine the date of default.

To quantify the nature of a debt arising out of monetary transactions, an agreement in explicit is required to determine the real nature of the transaction to classify whether it is a Financial Debt or an Operational Debt, more so to determine the date of default – Gokul Sai Udyog LLP Vs. Katyayni Contractors Pvt. Ltd. – NCLT Kolkata Bench Read Post »

While approving Resolution Plan, since 92% haircut and Transactional Auditor examined only two years, NCLT directs RP to examine the last 6 years Financial Statements/IT Returns/GST Returns/Cash Flow/Fund Flow Statements in detail – Rachna Jhunjhunwala, RP of Power Max (India) Pvt. Ltd. – NCLT Kolkata Bench

In the present case, total admitted claims are of Rs. 48.36 Crore, the liquidation value is Rs. 4.08 Crore and the value of the Resolution Plan is of Rs. 4.01 Crore, leading to a “haircut” of about 92%. The RP has appointed a transactional auditor who has examined only two financials’ years i.e., 2020-2021 and 2021-2022, and unaudited Trial Balance of 2022-2023 and came to conclusion that there are no avoidance transactions.

The Hon’ble NCLT Kolkata Bench, comprising of Ms. Bidisha Banerjee (Judicial Member) and Shri Arvind Devanathan (Technical Member) approving the Resolution Plan, has directed the Resolution Professional to examine the last 6 years Financial Statements, IT Returns, GST Returns, cash flow and fund flow statements in detail and place it before the CoC of the Corporate Debtor with appropriate justification and the basis for forming opinion that there were no avoidance transactions, in the form of a report. A copy of the said report also be filed with this Adjudicating Authority.

While approving Resolution Plan, since 92% haircut and Transactional Auditor examined only two years, NCLT directs RP to examine the last 6 years Financial Statements/IT Returns/GST Returns/Cash Flow/Fund Flow Statements in detail – Rachna Jhunjhunwala, RP of Power Max (India) Pvt. Ltd. – NCLT Kolkata Bench Read Post »

Whether Adjudicating Authority (NCLT) needs to get into the other claims and contentions of parties in IBC Section 9 application when the very question of limitation is found against Operational Creditor – Trigger Facility Pvt. Ltd. Vs. Larsen and Toubro Ltd. – NCLT Mumbai Bench

Hon’ble NCLT Mumbai Bench referring judgment in B.K. Educational Services Private Limited Vs. Parag Gupta and Associates [(2018) ibclaw.in 32 SC], held that in an application under Section 9 of the IBC, the issue regarding limitation assumes greater importance for admission. When the very root of the Application is cut by the law of limitation, no purpose would be served if we venture into discussing the contentions and rival contentions of parties. Hence, the Adjudicating Authority holds that no purpose would be served in discussing other grounds for admission, when the Application is already hit by Article 137 of the Limitation Act, 1963. It is not the endeavour of this Adjudicating Authority to give new lease of life to time-barred debts. Considering the above, it concludes that this Application is not fit for admission as the claims of the Operational Creditor are time-barred.

Whether Adjudicating Authority (NCLT) needs to get into the other claims and contentions of parties in IBC Section 9 application when the very question of limitation is found against Operational Creditor – Trigger Facility Pvt. Ltd. Vs. Larsen and Toubro Ltd. – NCLT Mumbai Bench Read Post »

Scroll to Top