Shri. H. V. Subba Rao

Creditors cannot exercise set-off during the moratorium under Section 14 of IBC – Meena Sureka Vs. Mr. Santosh Kumar Jaiswal and Ors. – NCLT Guwahati Bench

Hon’ble NCLT Guwahati Bench held that in terms of Section 14 (1)(b), during the period of moratorium any transfer, encumbering, alienating or disposing off the property of the Corporate Debtor is restrained. Further, the Hon’ble NCLAT in a plethora of judgments has held that the creditors cannot exercise set-off during the moratorium. Furthermore, the purpose and object of Moratorium is to temporarily freeze all actions as contemplated under Section 14 to enable the Corporate Debtor to resolve its Insolvency and to revive itself.

Creditors cannot exercise set-off during the moratorium under Section 14 of IBC – Meena Sureka Vs. Mr. Santosh Kumar Jaiswal and Ors. – NCLT Guwahati Bench Read Post »

Whether issuance of Cheques amounting of Rs 1 cr. for balance payment out of advance paid for goods, due to deficient supply by Corporate Debtor in favour of Operational Creditor automatically meets the threshold under Section 4 of IBC – Growthtree Ventures Pvt. Ltd. Vs. Umbrella Genomics Pvt. Ltd. – NCLT Guwahati Bench

In this case, due to deficient supply and the terms of the oral agreement, the CD issued the two Cheques in favour of the Operational Creditor which was returned unpaid by Bank.

Hon’ble NCLT holds that:
(i) It is not in the realm of contention that issuance of a cheque becomes a promise to pay under Section 25(3) of the Contract Act, 1872 and in accordance with Section 118 of the Negotiable Instruments Act, 1881, a presumption arises to the effect that the cheque was drawn and accepted for consideration. However, these arguments do not help the OC in meeting the threshold set under IBC in this present instance.
(ii) The OC has not been able to establish by placing any evidence on record to point out that amount beyond Rs. 69,18,411 is owed by the CD to the OC in relation to the same operational debt. There is no written agreement or document delineating the settlement of an amount to the tune of Rs 1,00,00,000 or any interest arrangement vis a vis the existing debt, but the pleadings of the OC only point to an oral arrangement sans any other hard and concrete foundation for its assertions and arguments, which the CD has denied.
(iii) Dismisses the petition.

Whether issuance of Cheques amounting of Rs 1 cr. for balance payment out of advance paid for goods, due to deficient supply by Corporate Debtor in favour of Operational Creditor automatically meets the threshold under Section 4 of IBC – Growthtree Ventures Pvt. Ltd. Vs. Umbrella Genomics Pvt. Ltd. – NCLT Guwahati Bench Read Post »

Resolution Plan once approved and implemented cannot be amended | In IBC, separate and distinct treatment of amounts payable to Secured Creditor on the one hand, and dues payable to the Government on the other clearly signifies – Assam Company India Ltd. Vs. Principal Commissioner of Income Tax and Anr. – NCLT Guwahati Bench

Hon’ble NCLT Guwahati Bench holds that:
(i) Section 31 of the IBC, 2016 clearly states that upon approval of the resolution plan it becomes binding on all the stakeholders including Central Government, State Government or any local authority to whom a debt in respect of the payment of dues arising under any law for the time being in force is owed cannot be burdened with the liability when the resolution plan is already approved.
(ii) The Resolution Plan once approved and implemented cannot be amended.
(iii) Once the requirements of the IBC have been fulfilled, all concerned are duty bound to abide by the discipline of the statutory provisions of IBC, 2016.
(iv) The separate and distinct treatment of amounts payable to secured creditor on the one hand, and dues payable to the government on the other clearly signifies Parliament’s intention to treat the latter differently- and in the present case, having lower priority. As noticed earlier, this intention is also evident from a reading of the preamble to the Act itself.
(v) In our views, the Judgment of State Tax Officer v/s Rainbow Papers Limited is not applicable in the present case.

Resolution Plan once approved and implemented cannot be amended | In IBC, separate and distinct treatment of amounts payable to Secured Creditor on the one hand, and dues payable to the Government on the other clearly signifies – Assam Company India Ltd. Vs. Principal Commissioner of Income Tax and Anr. – NCLT Guwahati Bench Read Post »

Amount given by Financial Creditor to Corporate Debtor by way of an investment for a Joint Venture does not fall within the definition of Financial Debt under IBC – Chiragsala Sales Pvt. Ltd. v. Vaishno Devi Traders Pvt. Ltd. – NCLT Guwahati Bench

In IBC Section 7 application, NCLT Guwahati Bench held that:
(i) It is very clear from the plain reading of the definition of financial debt as defined under sec. 5 (8) of the Code as well as the business arrangement between the parties under the above MoU that the above amount of Rs. 3 Crore given by the Financial Creditor to the Corporate Debtor by way of an investment and not towards any loan shall not be considered as a financial debt.
(ii) The Financial Creditor has conveniently supressed the above MoU in order to use the present IBC proceeding as recovery mechanism a d therefore the present CP has to be dismissed by imposing costs.
(iii) There is no merit in the above CP and the same is liable to be rejected by imposing cost of Rs. 1 Lakh payable by the Financial Creditor to ROC, Guwahati NER.

Amount given by Financial Creditor to Corporate Debtor by way of an investment for a Joint Venture does not fall within the definition of Financial Debt under IBC – Chiragsala Sales Pvt. Ltd. v. Vaishno Devi Traders Pvt. Ltd. – NCLT Guwahati Bench Read Post »

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