Owners and Parties Interested in The Vessel M.V. Polaris Galaxy Vs. Banque Cantonale De Geneve – Supreme Court
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In review judgment, Hon’ble Supreme Court held that it is well settled that judgments and observations in judgments are not to be read as provisions of statute. Judicial utterances and/or pronouncements are in the setting of the facts of a particular case. To interpret words and provisions of a statute, it may become necessary for the Judges to embark upon lengthy discussions. The words of Judges interpreting statutes are not to be interpreted as statutes. There are no grounds for review of the judgment and order.
Hon’ble Supreme Court held that the question of approval of the Committee of Creditors by the requisite percentage of votes, can only arise after the Committee of Creditors is constituted. The withdrawal of an application for CIRP by the applicant would not prevent any other financial creditor from taking recourse to a proceeding under IBC. The urgency to abide by the timelines for completion of the resolution process is not a reason to stifle the settlement.
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Daiichi Sankyo Company Ltd. Vs. Oscar Investments Ltd. & Ors. – Supreme Court Read Post »
Hon’ble Supreme Court held that in Lalit Kumar Jain v. Union of India (2021) ibclaw.in 61 SC, this Court held that the approval of a resolution plan in relation to a Corporate Debtor does not discharge the guarantor of the Corporate Debtor. On a parity of reasoning, the approval of a resolution in respect of one borrower cannot certainly discharge a co-borrower.
If there are two borrowers or if two corporate bodies fall within the ambit of corporate debtors, there is no reason why proceedings under Section 7 of the IBC cannot be initiated against both the Corporate Debtors. Needless to mention, the same amount cannot be realised from both the Corporate Debtors. If the dues are realised in part from one Corporate Debtor, the balance may be realised from the other Corporate Debtor being the co-borrower. However, once the claim of the Financial Creditor is discharged, there can be no question of recovery of the claim twice over.
Hon’ble Supreme Court set aside NCLAT order and held that there cannot be any straitjacket formula for accepting or rejecting the explanation furnished by the Appellant/applicant for the delay in taking steps. When an appeal is filed against an order rejecting an application on the ground of limitation, the onus is on the Appellant to make out sufficient cause for the delay in filing the application. The date of enforcement of the IBC and/or the date on which an application could have first been filed under the IBC are not relevant in computation of limitation. The pendency of the proceedings in a parallel forum, invoked by the Respondent, is not sufficient cause for the delay in filing an application under Section 9 of the IBC. Proceedings in good faith in a forum which lacks jurisdiction or is unable to entertain for like nature may save limitation. The initiation of proceedings in Madras High Court would not save limitation for initiation of proceedings for initiation of CIRP in the NCLT under Section 7 of the IBC.
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Essar House Pvt. Ltd. Vs. Arcellor Mittal Nippon Steel India Ltd. – Supreme Court Read Post »
Summary of the decision of Hon’ble Supreme Court in the following points:
A. Time lines stipulated in the IBC even for completion of proceedings are directory and not mandatory
B. Amendment in Regulation 12 of CIRP Regulations, 2016
C. Claim time period under CIRP Regulation 12 is not mandatory but only directory?
D. Approval of a Resolution Plan by the Adjudicating Authority
E. Section 31(2) uses the expression “may” and Resolution Plan Rejection
F. Statutory charge in terms of the GVAT Act squarely falls within the definition of “Security Interest”
G. Priority of statutory dues to the Government and/or other authorities under IBC
H. Decision
The Hon’ble Supreme Court held that the issues raised in this appeal are settled by this Court in Laxmi Pat Surana (2021) ibclaw.in 53 SC. As held by this Court in Laxmi Pat Surana (supra), the liability of the guarantor is co-extensive with that of the Principal Borrower. The judgment in Laxmi Pat Surana (supra), rendered by a three-Judge Bench of this Court is binding on this Bench. It was open to the Financial Creditor to proceed against the guarantor without first suing the Principal Borrower. We find no ground to interfere with the concurrent findings of the Adjudicating Authority (NCLT) and the Appellate Authority (NCLAT).