Mr. Barun Mitra

Whether Adjudicating Authority could have precluded the consideration of the 12A proposal of the Suspended Directors by the CoC on the ground that Resolution Plan was under consideration of NCLT – Pratham Expofab Pvt. Ltd. Vs. Mr. Anil Matta, RP of Primrose Infratech Pvt. Ltd. and Ors. – NCLAT New Delhi

Hon’ble NCLAT while upholding the decision of NCLT held that the suspended management cannot insist, impose or force the consideration of its settlement proposal by the CoC when the CoC in the exercise of its business decision has categorically decided against considering any such proposal from the Appellant.
The Hon’ble Tribunal also held that when a resolution plan has already been received by the CoC and the CoC in the exercise of its commercial wisdom has decided to only consider this plan and has also rejected with majority voting the settlement plan given by the Appellant, no error has been committed by the Adjudicating Authority in disallowing further opportunity to the Appellant to submit a Section 12A proposal

Whether Adjudicating Authority could have precluded the consideration of the 12A proposal of the Suspended Directors by the CoC on the ground that Resolution Plan was under consideration of NCLT – Pratham Expofab Pvt. Ltd. Vs. Mr. Anil Matta, RP of Primrose Infratech Pvt. Ltd. and Ors. – NCLAT New Delhi Read Post »

When Lessor was not in receipt of rent on CIRP commencement date and Arbitral Award was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost under CIRP Regulation 31(b) | This case does not fall under Section 14(1)(d) of the IBC, rather it is covered by Section 14(1)(a) – Mr. A. Guhan and Anr. Vs. Ms. Sunita Umesh Liquidator, Deltronix India Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) On the date when CIRP commenced, Appellant was not receiving any rent from the Corporate Debtor and claim of rent/damages and possession of the assets was under consideration in the Execution Proceedings.
(ii) After enforcement of Moratorium under Section 14 by virtue of Section 14(1)(a) the Appellant could not have prosecuted the Execution Proceeding against the Corporate Debtor. When the Appellant could not have proceeded with the execution of Arbitral Award, there was no occasion to recover the rent and assets from the Corporate Debtor.
(iii) The claim of Appellant as per Arbitral Award to receive damages and occupation from Corporate Debtor cannot be treated as Insolvency Resolution Process cost under Section 31(b).
(iv) The fact that plant and machineries are attached/available at the site cannot be read to mean that the premises were being used as a going concern by Corporate Debtor
(v) In the present case, when the Appellant was not in receipt of rent from December 2014, and Arbitral Award obtained by the Appellant was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost.

When Lessor was not in receipt of rent on CIRP commencement date and Arbitral Award was still under execution, the lease rental subsequent to the commencement of the CIRP cannot be treated as CIRP cost under CIRP Regulation 31(b) | This case does not fall under Section 14(1)(d) of the IBC, rather it is covered by Section 14(1)(a) – Mr. A. Guhan and Anr. Vs. Ms. Sunita Umesh Liquidator, Deltronix India Ltd. – NCLAT New Delhi Read Post »

Once CoC had approved Resolution Plan, SRA cannot object to any conditions stated in the Letter of Intent (LOI) | CoC’s decision to liquidate the Corporate Debtor is a business decision and is clearly not amenable to judicial review – Sanjay Dave Vs. Andhra Bank Ltd. and Ors. – NCLAT New Delhi

In this case, RP while intimating the SRA also informed that the approval of the resolution plan by the CoC was subject to the order reserved by the Adjudicating Authority.

Hon’ble NCLAT held that:
(i) These conditionalities cannot be held to be a surprise for the SRA as these alleged conditionalities were discussed and deliberated in the CoC meetings and it was clear to all the participants including SRA that these conditionalities were integral to the resolution plan of the SRA.
(ii) The Adjudicating Authority rightly refused to entertain the objections of the SRA to the conditions in the LoI since withdrawal or modification of resolution plan after approval by the CoC is not permissible in law.
(iii) It is pertinent to note that the statutory construct of IBC in terms of Section 33 clearly empowers the CoC to decide to liquidate the Corporate Debtor any time before the confirmation of the resolution plan by the Adjudicating Authority.

Once CoC had approved Resolution Plan, SRA cannot object to any conditions stated in the Letter of Intent (LOI) | CoC’s decision to liquidate the Corporate Debtor is a business decision and is clearly not amenable to judicial review – Sanjay Dave Vs. Andhra Bank Ltd. and Ors. – NCLAT New Delhi Read Post »

Invoices containing the term of interest cannot be operated against the Corporate Debtor unless there is an agreement for interest or any other document showing that the Corporate Debtor has accepted the obligation for interest – Rishabh Infra Through Hari Mohan Gupta Vs. Sadbhav Engineering Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that the entire Principal Amount having been paid, the Adjudicating Authority did not commit any error in rejecting the Section 9 Application filed by the Operational Creditor. Invoices which have been sent by the Operational Creditor containing the term of interest cannot be operated against the Corporate Debtor unless there is an agreement for interest or any other document showing that the Corporate Debtor has accepted the obligation for interest.

Invoices containing the term of interest cannot be operated against the Corporate Debtor unless there is an agreement for interest or any other document showing that the Corporate Debtor has accepted the obligation for interest – Rishabh Infra Through Hari Mohan Gupta Vs. Sadbhav Engineering Ltd. – NCLAT New Delhi Read Post »

Can a Corporate Debtor file an application under Section 8 of the Arbitration and Conciliation Act, 1996, after filing a reply to an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC)? – Century Aluminium Company Ltd. Vs. Religare Finvest Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) Right to move Section 8 Application was forfeited since Corporate Debtor did not choose to file the Application.
(ii) Whether Arbitration Proceedings are pending on the date when Section 7 Application is filed or it is sought to be initiated subsequent to filing of Section 7 Application is immaterial.
(iii) By not filing of Application under Section 8 at the time of filing of a Reply to Section 7, Corporate Debtor has forfeited his right to file his Application under Section 8.
(iv) Arbitration Proceeding which were initiated by Financial Creditor are still pending, that neither preclude the Financial Creditor from filing a Section 7 Application nor preclude the Adjudicating Authority to proceed to consider the debt and default in Section 7 Application.

Can a Corporate Debtor file an application under Section 8 of the Arbitration and Conciliation Act, 1996, after filing a reply to an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC)? – Century Aluminium Company Ltd. Vs. Religare Finvest Ltd. – NCLAT New Delhi Read Post »

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi

The liquidator proposed sale of the shares of subsidiary company to Govt. of Keral which was approved by NCLT. However, Govt. of Kerala backed out from the purchase of the shares.

Hon’ble NCLAT held that a purchaser backing out from the transaction the consequences as available in law have to followed and take recourse, but no direction could be issued to compel the State to purchase the share.

A purchaser backing out from the transaction the consequences as available in law have to followed and take recourse – Kuldeep Verma Vs. Government of Kerala and Ors. – NCLAT New Delhi Read Post »

The issue of the extent of Limited Guarantee is to be decided at the time of finalisation of Payment Plan, not at Section 95 application admission stage – Nilay R. Shah Vs. State Bank of India and Anr. – NCLAT New Delhi

In this case, Personal Guarantor challenged insolvency admission order passed under Section 95 of IBC on the ground of limited Guarantee.

The Hon’ble NCLAT held that the Application has only been admitted and the payments Plan have yet to be finalised. The said question is to be looked into by the Adjudicating Authority at the time of finalisation of the payment Plan.

The issue of the extent of Limited Guarantee is to be decided at the time of finalisation of Payment Plan, not at Section 95 application admission stage – Nilay R. Shah Vs. State Bank of India and Anr. – NCLAT New Delhi Read Post »

Can a Power of Attorney (PoA) executed in favor of the Directors of a Corporate Debtor for carrying out development be canceled by Resolution Plan? – Dharmesh Jain Vs. Jayesh Sanghrajka and Ors. – NCLAT New Delhi

Hon’ble NCAT held that when PoA which was given for a particular purpose to the Appellant as nominee of the corporate debtor and Resolution Plan is approved by the CoC of the corporate debtor, the approval of the Resolution Plan is in commercial wisdom of the CoC and in event, the Resolution Plan declare the PoA which was given in favour of the Appellant as nominee of the corporate debtor as cancelled, the said clause of the Resolution Plan cannot be allowed to be challenged by the Appellant nor Appellant was given any rights in the subject property so as to assert any right.

Can a Power of Attorney (PoA) executed in favor of the Directors of a Corporate Debtor for carrying out development be canceled by Resolution Plan? – Dharmesh Jain Vs. Jayesh Sanghrajka and Ors. – NCLAT New Delhi Read Post »

Development Rights are also fully covered by the definition of Property under Section 3(27) of the IBC – Nilesh Sharma RP – Today Homes and Infrastructure Pvt. Ltd. Vs. Mordhwaj Singh and Ors. – NCLAT New Delhi

Hon’ble NCLAT held that the definition under Section 3(27) of the Property is an inclusive definition which obviously includes the Development Rights which was obtained by the Developers from the Owners by Development Agreement dated 03.03.2007 were subsequently assigned to the Corporate Debtor by an Agreement dated 30.07.2010. The Developer was handed over the possession in pursuance of Consent Award dated 05.09 2009.

Development Rights are also fully covered by the definition of Property under Section 3(27) of the IBC – Nilesh Sharma RP – Today Homes and Infrastructure Pvt. Ltd. Vs. Mordhwaj Singh and Ors. – NCLAT New Delhi Read Post »

If CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by RP, CIRP proceedings may be treated to be closed and Resolution Professional cannot file application for dissolution under Section 54 of IBC | RP can intimate the RoC for striking off the name of Corporate Debtor from the Register of the Companies – Janak Jagjivan Shah RP Rainbow Infrabuild Pvt. Ltd. Vs. CoC of Rainbow Infrabuild Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that:

(i) CIRP having been unsuccessful and no liquidation order having been passed, recourse to Section 54 of IBC, could not have been taken by the RP
(ii) When the entity, who has initiated the CIRP is not ready to proceed any further and CIRP period having already come to an end, no further steps were required in the CIRP of the Corporate Debtor and RP could have closed the matter by intimating the Registrar of Companies for striking off the name of Company from the Register of the Companies.
(iii) The CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by the RP. The CIRP proceedings may be treated to be closed.

If CIRP having come to an end and liquidation has not been ordered, no further steps are required to be taken by RP, CIRP proceedings may be treated to be closed and Resolution Professional cannot file application for dissolution under Section 54 of IBC | RP can intimate the RoC for striking off the name of Corporate Debtor from the Register of the Companies – Janak Jagjivan Shah RP Rainbow Infrabuild Pvt. Ltd. Vs. CoC of Rainbow Infrabuild Pvt. Ltd. – NCLAT New Delhi Read Post »

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