Pending for correction

No Liquidator’s fee can be charged from Scheme Proponent, who has submitted Scheme of Compromise and Arrangement under Sec. 230 of Companies Act, 2013 | Liquidator is entitled to his fee under Sec. 34 & Liquidation Regulation 4 and Cost under Regulation 2B – CA Jai Narayan Gupta (Liquidator of Barcle Enterprises Limited) v. Radhasiriya Properties Pvt. Ltd. – NCLAT New Delhi

In this landmark judgment, Hon’ble NCLAT held that:
(i) The statutory provision is clear that Liquidator can only claim cost incurred from the parties who proposed the compromise or arrangement.
(ii) The Rule making Authority is fully aware of the difference between the cost and fee. Liquidation Regulation 2B, does not include fee. Regulation 4 of Liquidation Regulations, 2016 deals with fee.
(iii) Regulation 2B does not indicate that any fee by Liquidator can be charged from the Scheme Proponent. The Liquidator is entitled to his fee as per the statutory provision of Section 34, sub-section (8) and (9) read with Regulation 4 of Liquidation Regulations, 2016.
(iv) No fee can be charged from the Scheme Proponent, who has submitted the Scheme under Section 230 of the Companies Act, 2013 read with Regulation 2B of Liquidation Regulations, 2016.
(v) Cost incurred with regard to compromise or arrangement has to be borne by the Corporate Debtor or Scheme Proponent.

No Liquidator’s fee can be charged from Scheme Proponent, who has submitted Scheme of Compromise and Arrangement under Sec. 230 of Companies Act, 2013 | Liquidator is entitled to his fee under Sec. 34 & Liquidation Regulation 4 and Cost under Regulation 2B – CA Jai Narayan Gupta (Liquidator of Barcle Enterprises Limited) v. Radhasiriya Properties Pvt. Ltd. – NCLAT New Delhi Read Post »

The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC – SAJ Housing Pvt. Ltd. Vs. Ms. Priyanka Chouhan Liquidator – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) Though the concept of time value of money has not been expressly defined in the IBC, ordinarily understood, time value of money is not only a regular or timely return received for the duration for which the amount is disbursed as an amount in addition to the principal, but also covers any other form of benefit or value accruing to the creditor as a return for providing money for a long duration.
(ii) In the statutory framework of the IBC, there is only limited review available which can be exercised by the Adjudicating Authority without trespassing upon the business decision of the majority of the CoC. The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC so long as it musters more than 66% vote share. And it is here that primacy of the commercial wisdom of the CoC comes into play.
(iii) There can be no fetters on the commercial wisdom of the CoC. The supremacy of commercial wisdom of the CoC has been reaffirmed time and again by the Hon’ble Supreme Court. It is not for the Adjudicating Authority to consider or evaluate on merits the rationale underlying the commercial decision of the CoC.

The decision as to whether the Corporate Debtor is to be revived or not is essentially a business decision and hence should be left to the CoC – SAJ Housing Pvt. Ltd. Vs. Ms. Priyanka Chouhan Liquidator – NCLAT New Delhi Read Post »

Litigation in the SARFAESI and DRT does not preclude the Bank to take specific remedy provided under Section 7 of IBC – Laxmi Engineering Industries (Bhopal) Pvt. Ltd. Vs. Canara Bank – NCLAT New Delhi

Hon’ble NCLAT held that:
(i) Insofar as the submission of the Appellant that Bank has approached the multiple forums including the DRT is concerned, it is well settled that litigation in the SARFAESI and DRT does not preclude the Bank to take specific remedy provided under Section 7, hence, the said submission does not help the Appellant.
(ii) As far as the last submission of the Appellant that the Corporate Debtor is taking steps for the OTS settlement, we only observe that in event any OTS is accepted, it shall be open for the Appellant to file an Application before the Adjudicating Authority for closing the settlement under Section 12A which may be considered in accordance with law.

Litigation in the SARFAESI and DRT does not preclude the Bank to take specific remedy provided under Section 7 of IBC – Laxmi Engineering Industries (Bhopal) Pvt. Ltd. Vs. Canara Bank – NCLAT New Delhi Read Post »

Section 21 relates to CoC which normally is comprising of FC of the CD but does not allow the related party who owes financial debt- Kamineni Steel & Power India Pvt. Ltd. Vs. Indian Bank & Ors. – NCLAT

From plain reading of Section 21 (8) (as it then was) it is clear that all the decisions of the ‘Committee of Creditors’ is required to be taken by a vote of not less than seventy-five percent of the voting shares of the ‘Financial Creditors’, including the approval of the ‘Resolution Plan’. Sub-section (8) of Section 21 being mandatory in nature, any plan which has not been approved by the ‘Committee of Creditors’ with voting shares of seventyfive percent, cannot be approved by the Adjudicating Authority as it will be against the provisions of Section 30(2)(e) of the ‘I&B Code’ which stipulates that the ‘Resolution Plan’ does not contravene any of the provisions of the law for the time being in force. Less than seventy-five percent of the voting shares of the ‘Committee of Creditors’ in the matter of approval of the ‘Resolution Plan’ being against the provisions of clause (e) of sub-section (2) of Section 30, it cannot be approved-

Section 21 relates to CoC which normally is comprising of FC of the CD but does not allow the related party who owes financial debt- Kamineni Steel & Power India Pvt. Ltd. Vs. Indian Bank & Ors. – NCLAT Read Post »

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