Mr. Justice  A.S. Chandurkar

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court

Hon’ble Bombay High Court held that:

(i) The action of suspending the registration of the petitioner as RP on the basis of judgment of NCLAT, which was not challenged by the IP, is justified.
(ii) The period for which such suspension should operate is a matter within the realm of the Disciplinary Committee.
(iii) The Disciplinary Committee in the light of the jurisdiction conferred upon it by Section 220 of the Code is empowered to take into consideration all relevant aspects including the conduct of RP.

Suspension period of an Insolvency Professional is a matter within the realm of the IBBI Disciplinary Committee – Vijendra Kumar Jain Vs. The Insolvency & Bankruptcy Board of India (IBBI) and Anr. – Bombay High Court Read Post »

Whether IBBI Disciplinary Committee constituted under Section 220 of the IBC can consist of a Single Whole-Time Member – Rohit J. Vora Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court

Division Bench of Hon’ble Bombay High Court held that:

(i) The proviso to Section 220(1) of IBC merely requires that the members of the Disciplinary Committee should be whole-time members of the IBBI. The said proviso does not seek to provide the number of members who should constitute the Disciplinary Committee.
(ii) While Section 220(1) of the Code deals with constitution of a Disciplinary Committee with the requirement that its members ought to be whole-time members of the IBBI, the constitution of the Disciplinary Committee as regards the number of its members is provided by Clause 2(1)(c) of the Regulations of 2017.
(iii) Regulation 2(1)(c) of the IBBI (Inspection and Investigation Regulations) Regulations, 2017 cannot be said that this clause travels beyond what has been provided by Section 220(1).
(iv) It would be permissible to constitute a Disciplinary Committee consisting of either a single whole-time member or more than one whole-time member of the IBBI.

Whether IBBI Disciplinary Committee constituted under Section 220 of the IBC can consist of a Single Whole-Time Member – Rohit J. Vora Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court Read Post »

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court

The Hon’ble Bombay High Court (Division Bench) did not find that Clause 23A of the Schedule of IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 travel beyond what has been empowered to be done under the Code.

The Bench also considered the office noting placed on record which indicates that DGM (IBBI) was directed to undertake investigation and held that it cannot be said that the Investigating Authority in the absence of any order in writing proceeded to conduct an investigation in terms of Section 218(1) of the Code.

The Court referring the decision in CA V. Venkata Sivakumar Vs. IBBI and Ors. (2024) ibclaw.in 59 HC did not find that the suspension of AFA pending consideration of the show cause notices is in any manner contrary to law or unwarranted in the facts of the present case.

Suspension of authorisation for assignment (AFA) pending consideration of show cause notices issued under Section 219 of IBC is not contrary to law | Clause 23A of Model Bye-Laws and Governing Board of IPAs Regulations, 2016 cannot be held to be ultra vires – Kairav Anil Trivedi Vs. Insolvency & Bankruptcy Board of India (IBBI) and Ors. – Bombay High Court Read Post »

A transaction not reflected in the books of accounts/ITR of the holder of the cheque can be permitted to be enforced by instituting proceedings u/s 138 of Negotiable Instruments Act, 1881 and violation of Section 269SS/271AAD of Income Tax Act, 1961 would not render the transaction unenforceable u/s 138 – Prakash Madhukarrao Desai Vs. Dattatraya Sheshrao Desai – Bombay High Court

In this important judgment, Hon’ble Division Bench of High Court of Bombay held that:
(i) A transaction not reflected in the books of accounts and/or Income Tax returns of the holder of the cheque in due course can be permitted to be enforced by instituting proceedings under Section 138 of the Act of 1881 in view of the presumption under Section 139 of the Act of 1881 that such cheque was issued by the drawer for the discharge of any debt or other liability, execution of the cheque being admitted.
(ii) Violation of Sections 269SS and/or Section 271AAD of the Act of 1961 would not render the transaction unenforceable under Section 138 of the Act of 1881.
(iii) The decisions in Krishna P. Morajkar Versus Joe Ferrao & Another (2013), Bipin Mathurdas Thakkar Versus Samir & Another (2015) and Pushpa Sanchalal Kothari Versus Aarti Uttam Chavan (2021) lay down the correct position and are thus affirmed.
(iv) The decision in Sanjay Mishra Versus Kanishka Kapoor @ Nikki & Another (2009) with utmost respect stands overruled.

A transaction not reflected in the books of accounts/ITR of the holder of the cheque can be permitted to be enforced by instituting proceedings u/s 138 of Negotiable Instruments Act, 1881 and violation of Section 269SS/271AAD of Income Tax Act, 1961 would not render the transaction unenforceable u/s 138 – Prakash Madhukarrao Desai Vs. Dattatraya Sheshrao Desai – Bombay High Court Read Post »

Application under Section 34(3) of the Arbitration and Conciliation Act, 1996 has to be made within a period of three months from receiving an arbitral award or within a further period of thirty days from the expiry of three months but not thereafter – Nagrik Sahakari Rugnalaya and Research Center Ltd. Vs. Arneja Nagrik Hospital Pvt. Ltd. – Bombay High Court

Hon’ble High Court held that under Section 34(3) of the Act of 1996, an application for setting aside an award is required to be made within a period of three months from the date on which the party making such application had received arbitral award. By the proviso to Section 34(3) of the Act of 1996, on indicating sufficient cause for being prevented from making such application within a period of three months, the Court has jurisdiction to entertain such application within a further period of thirty days but not thereafter. Thus application under Section 34(3) of the Act of 1996 has to be made within a period of three months from receiving an arbitral award or within a further period of thirty days from the expiry of three months but not thereafter. Perusal of the impugned order indicates that the learned District Judge has equated the period of three months with ninety days and has thereafter found that the application under Section 34 of the Act of 1996 as filed on 30.06.2022 was beyond the period of one hundred and twenty days. Since Section 34(3) of the Act of 1996 specifically prescribes the period of three months and not ninety days there would be no basis to hold that the application under Section 34(3) of the Act of 1996 read with the proviso has to be filed within one hundred and twenty days. Such application has to be filed within a period of three months and subject to indicating sufficient cause for not making such application within a period of three months but within a period of thirty days the same can be entertained.

Application under Section 34(3) of the Arbitration and Conciliation Act, 1996 has to be made within a period of three months from receiving an arbitral award or within a further period of thirty days from the expiry of three months but not thereafter – Nagrik Sahakari Rugnalaya and Research Center Ltd. Vs. Arneja Nagrik Hospital Pvt. Ltd. – Bombay High Court Read Post »

Priority in recovering dues from a company that has become non-functional but has not been wound up – Khandelwal Tube Mill Kamgar Sangh Vs. The Government of Maharashtra – Bombay High Court

When a secured creditor takes resort to the provisions of Section 13 of the Act of 2002 he can take recourse to the measures prescribed under Section 13(4) thereof. After taking such action and after all costs, charges and expenses that have been incurred by the secured creditor are received by it, in absence of any contract to the contrary the amounts received are to be held in trust for being applied firstly to the payment of such costs, charges and expenses and thereafter in discharge of the dues of the secured creditor. The residue of the money so received is to be paid to the person entitled thereto in accordance with his rights and interest. Admittedly in the present case the Secured Creditor has not taken recourse to the measures prescribed by Section 13(4) and therefore there would be no occasion for the contingency as prescribed under Section 13(7) of the Act of 2002 to operate.

Priority in recovering dues from a company that has become non-functional but has not been wound up – Khandelwal Tube Mill Kamgar Sangh Vs. The Government of Maharashtra – Bombay High Court Read Post »

Debt Recovery Tribunal (DRT) has no power to restrain a person from travelling abroad in the absence of specific powers to that effect – Anurag S/o. Padmesh Gupta Vs. Bank of India – Bombay High Court

A division bench of the Hon’ble of Bombay High Court held that on careful consideration of the language of Sub Section 12, 13(A), 17 and 18 of Section 19, we are of the considered view that the Tribunal is not conferred with specific power to restrain a person from leaving the country. In the absence of a specific provision conferred on the Debt Recovery Tribunal by statute, the Debt Recovery Tribunal has no power to restrain a citizen from travelling abroad, particularly when the said right has been recognised as a facet of Article 21 of the Constitution of India. In our view, the provisions under RDDBFI Act, 1993, as they stand, do not even impliedly confer such powers on the Debt Recovery Tribunal to restrain a person from travelling abroad. The order refusing permission to travel abroad has been made in contravention of the provisions of Article 21 of the Constitution and is violative of the right guaranteed to the petitioner under Article 21. The State has not made any law or provision in the said Act seeking to deprive or regulate the right of a person to travel abroad. The order is, therefore, liable to be set aside.

Debt Recovery Tribunal (DRT) has no power to restrain a person from travelling abroad in the absence of specific powers to that effect – Anurag S/o. Padmesh Gupta Vs. Bank of India – Bombay High Court Read Post »

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