Mr. Vijai Pratap Singh [V. P. Singh]

The outcome of the avoidance transaction under Sections 43, 45, 47, 49, 50 of the Code cannot be given to the Successful Resolution Applicant and it must go to the Corporate Debtor’s Creditors – 63 Moons Technologies Ltd. Vs. The Administrator of Dewan Housing Finance Corporation Ltd. – NCLAT New Delhi

NCLAT allows the appeal against an order dated 07.06.2021 passed by the NCLT, Mumbai Bench approving the Resolution Plan for DHFL in which it was stipulated that recoveries from Avoidance transactions enure to the benefit to Resolution Applicant. NCLAT holds that the term in the Resolution Plan that permits the Successful Resolution Applicant to appropriate recoveries, if any, from avoidance applications filed under Section 66 of the Code ought to be set aside. The Resolution Plan be sent back to the CoC for reconsideration on this aspect.

The outcome of the avoidance transaction under Sections 43, 45, 47, 49, 50 of the Code cannot be given to the Successful Resolution Applicant and it must go to the Corporate Debtor’s Creditors – 63 Moons Technologies Ltd. Vs. The Administrator of Dewan Housing Finance Corporation Ltd. – NCLAT New Delhi Read Post »

Whether after approval of the Resolution Plan by the CoC and pending approval, the Adjudicating Authority can direct the CoC to convene a meeting and place the promoter’s settlement proposal as offered for consideration, decision and voting on that within a certain period? – Union Bank of India on behalf of the CoC of Dewan Housing Finance Corporation Ltd. Vs. Mr. Kapil Wadhawan – NCLAT New Delhi

In the instant case, after Approval of the Resolution Plan by the CoC, the application was pending before the Adjudicating Authority under Section 31 of the Code, for Approval of the resolution plan the Adjudicating Authority accordingly while disposing of the Interim Application directed the CoC to consider the IInd Settlement Proposal of the Promoter, within ten days and take an appropriate decision. NCLAT set aside the order holding that considering the ratio of the Judgement of the Hon’ble Supreme Court in the case of Ebix Singapore (supra), “there was no scope for negotiations between the parties once the CoC has approved the Resolution Plan. Thus, contractual principles and common law remedies, which do not find a rope in the wording or the intent of the IBC, cannot be imported in the intervening period between the acceptance of the CoC Approved Resolution Plan and the Approval by the Adjudicating Authority.

Whether after approval of the Resolution Plan by the CoC and pending approval, the Adjudicating Authority can direct the CoC to convene a meeting and place the promoter’s settlement proposal as offered for consideration, decision and voting on that within a certain period? – Union Bank of India on behalf of the CoC of Dewan Housing Finance Corporation Ltd. Vs. Mr. Kapil Wadhawan – NCLAT New Delhi Read Post »

Just because a promoter desires to pay all dues including the default amount cannot be a ground to set aside the CIRP – Mr. Vallal RCK Vs. Siva Industries and Holdings Ltd. – NCLAT Chennai

In the instant case, the Resolution Professional filed application for withdrawal u/s 12A after rejection of Resolution Plan by CoC. The AA rejected the withdrawal application. NCLAT holds that a mere glance of the terms of the implementation, it unerringly, in the considered opinion of this Tribunal, points out that it is more like that of a contemplated/Resolution Plan, proposed in terms of the ingredients of Section 30 of the Code and in short, it cannot be characterised as a Settlement in a stricto sense of the one, envisaged as per Section 12A of Code.
It cannot be ignored that if the CIRP is initiated by admitting the application under Section 7 or 9 or 10, it cannot be set aside or withdrawn except for any illegality, to be exhibited or if it is without jurisdiction or for some other justiciable ground just because a promoter desires to pay all dues including the default amount cannot be a ground to set aside the CIRP. The well settled legal principle is that the Committee of Creditors ought not to approve the Resolution Plan where the Resolution Applicant is ineligible under Section 29A of the Code. In this connection this Tribunal pertinently points out that in the instant case on hand, the promoter of the Corporate Debtor being ineligible to project a Resolution Plan by virtue of Section 29A of the Code had embarked upon the aspect of furnishing a settlement proposal ‘which is akin to Resolution Plan’. To put it differently the promoter of the Corporate Debtor had ventured in endeavouring to restructure the loan sanctioned by the Financial Creditors based on the premise of a Settlement Proposal to be filed under Section 12A of the Code.

Just because a promoter desires to pay all dues including the default amount cannot be a ground to set aside the CIRP – Mr. Vallal RCK Vs. Siva Industries and Holdings Ltd. – NCLAT Chennai Read Post »

The phrase used in Section 17(1)(d) of the IBC that financial institution “shall act on the instructions of the IRP” does not mean that it authorises IRP/RP to compel the financial institution for maintaining the accounts of the Corporate Debtor to continue the Non-Fund Based Facility comforted by Bank Guarantee – Union Bank of India Vs. Mr Dinkar T. Venkatasubramanian RP of Amtek Auto Ltd.- NCLAT New Delhi

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The phrase used in Section 17(1)(d) of the IBC that financial institution “shall act on the instructions of the IRP” does not mean that it authorises IRP/RP to compel the financial institution for maintaining the accounts of the Corporate Debtor to continue the Non-Fund Based Facility comforted by Bank Guarantee – Union Bank of India Vs. Mr Dinkar T. Venkatasubramanian RP of Amtek Auto Ltd.- NCLAT New Delhi Read Post »

The Adjudicating Authority is not a Court of Law and the CIRP is not an adversial litigation – M/s Pitti Coal Company Vs. M/s Mahalaxmi Continental Ltd. – NCLAT New Delhi

NCLAT holds that the dispute as defined in Section 5(6) of the Code is not to be restricted to the pending lis or proceedings within the limited purview of Suit or Arbitration proceedings and the term ‘includes’ should be read as ‘means and includes’ including the proceedings initiated or pending before Consumer Court, Tribunal, Labour Court or Mediation, Conciliation etc. The Adjudicating Authority under the Code is required to examine prior to the admission or rejection of an Application as per Section 9 of the Code as to whether the Dispute projected by the Corporate Debtor qualifies as a Dispute as per Section 5(6) of the Code and whether Notice of Dispute given by the Corporate Debtor satisfies the conditions enumerated in Section 8(2) of the Code. It is the duty of the Adjudicating Authority to find out whether there is a plausible plea which necessitates more investigation and the dispute is not weak one or an assertion of facts unsupported by materials/evidence. If the Dispute truly exists in fact and not an imaginary or an illusory or spurious one, then, the Adjudicating Authority is bound to turn down the Application.
As far as the present case is concerned, in the instant case, between Appellant/First Respondent, there are Pre-Existing Disputes and they are quite tangible/substantial one and as such, the plausible contentions projected/raised by the parties to the present Appeal require further investigation and in short, the dispute is not to be determined by the Adjudicating Authority/Appellate Tribunal in a Summary Jurisdiction under Code. The Adjudicating Authority is not a Court of Law and the CIRP is not an adversial litigation. The Adjudicating Authority is not to decide the Application under Code like a Money Claim under the Code. Viewed in that perspective, the Adjudicating Authority is not supposed to go into the aspect of dispute in a thread bare fashion or on merits. The impugned order dated 24.02.2020 in CP(IB) No. 34/GB/2019 passed by the Adjudicating Authority in rejecting the Section 9 Application filed by the Appellant/Operational Creditor/Applicant is free from legal infirmities.

The Adjudicating Authority is not a Court of Law and the CIRP is not an adversial litigation – M/s Pitti Coal Company Vs. M/s Mahalaxmi Continental Ltd. – NCLAT New Delhi Read Post »

The Adjudicating Authority (NCLT) is not empowered to deal with the matters falling under the purview of another authority (under PMLA) – Kiran Shah, RP of KSL and Industries Ltd. Vs. Enforcement Directorate, Kolkata – NCLAT New Delhi

NCLAT held that the Appellant/Resolution Professional even though has filed Company Appeal being dissatisfied with the order dated 31.12.2020[filed by the Applicant/IRP for KSL Industries Ltd./Corporate Debtor under Sections 14,18,25 & 60(5) of Code] seeking to set aside the Attachment of the Property of the Corporate Debtor by the Respondent/Enforcement Directorate vide order dated 24.10.2019 passed by the Adjudicating Authority PMLA etc., this Tribunal makes it candidly clear that filing of Application under Section 60(5) of the Code is not an all pervasive one, thereby conferring Jurisdiction to an Adjudicating Authority (NCLT) to determine any question/issue of priorities, question of Law or Facts pertaining to the Corporate Debtor when in reality in Law, the Adjudicating Authority (NCLT) is not empowered to deal with the matters falling under the purview of another authority under PMLA. Viewed in that perspective, IA 81 of 2020 in CP(IB) No. 397/NCLT/AHM/2018 filed by the Applicant/IRP for KSL & Industries Ltd is held by this Tribunal as not maintainable in law. Resultantly, the Appeal fails. In fine, the Company Appeal is dismissed.

The Adjudicating Authority (NCLT) is not empowered to deal with the matters falling under the purview of another authority (under PMLA) – Kiran Shah, RP of KSL and Industries Ltd. Vs. Enforcement Directorate, Kolkata – NCLAT New Delhi Read Post »

Resolution Professional is an Officer of the Court and he is to exercise reasonable and responsible care for the company whose property and affairs are entrusted with him – Canara Bank Vs. Ms. Mamta Binani, RP of Aristo Texcon Pvt. Ltd. – NCLAT New Delhi

NCLAT upheld decision of the AA and dismissed the appeal which was filed on the ground that AA while passing the impugned order had failed to consider that there is no equal treatment between the Financial Creditors while distributing Funds under the Resolution Plan. NCLAT held that Resolution Professional is an Officer of the Court and he is to exercise reasonable and responsible care for the company whose property and affairs are entrusted with him. In case, the Resolution Plan is not meeting the requirement of Section 30 of the Code, the Resolution Professional is empowered to refuse to present the Plan to the CoC. An ex-facie opinion is to be offered to the CoC by the Resolution Professional that the Law was not violated. Subjective satisfaction is a pre-requisite for approval of Resolution Plan. A threadbare scrutiny and a study of the Resolution Plan is to be made prior to the ‘satisfaction’ being arrived at by the Adjudicating Authority in a written form. The Code speaks of accountability of the Insolvency Professional and also the CoC who comprise of the Lender Banks.

Resolution Professional is an Officer of the Court and he is to exercise reasonable and responsible care for the company whose property and affairs are entrusted with him – Canara Bank Vs. Ms. Mamta Binani, RP of Aristo Texcon Pvt. Ltd. – NCLAT New Delhi Read Post »

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