On plain reading of Section 5(24) (h) – ‘related party’ in relation to a corporate debtor, we find that related party is any person on whose advice, directions or instructions, a director, partner or manager of the corporate debtor is accustomed to act. The said provision cannot be made applicable in relation to the 2nd Respondent, who is also a Financial Creditor and in agreement referred to above, he is not supposed to give any advice, directions or instructions to the director or partner or manager of the corporate Debtor. Even if it is accepted that he is an agency of the Corporate Debtor, he has to act on the directions of the Corporate Debtor and not to give advice.
it is evident that even if a claim is disputed and if the amount payable is more than Rupees 1 lakh, the application u/s 7 of the I&B Code is maintainable. Mere pendency of the case before the DRT for adjudicating of such disputed amount cannot be a ground to reject the application u/s 7 of the I&B Code, if the Adjudicating Authority is satisfied that there is a ‘debt’ and ‘default’ and the application is complete. On the other hand, in view of Section 14 all such proceedings in respect of any debt will remain stayed and cannot proceed during the period of moratorium.
Case Reference Case Name : Mr. Naveen Kumar Dixit, Shareholder of M/s. Callina Care Overseas Private Limited Vs. M/s. Jaswant, International Private Limited Company Appeal : Company Appeal (AT) (INS) No.164 of 2019 Company Appeal Ref. : Arising out of…
The Adjudicating Authority (National Company Law Tribunal), Bench-III, New Delhi, by impugned order dated 14th December, 2017, dismissed the application on the ground of inconsistency in the overall payments and the non-compliance with the provisions of Section 9(3)(c) by the ‘Operational Creditor’, in the absence of a certificate from the financial institution maintaining accounts of the ‘Operational Creditor’.NCLAT upheld the same.
The Adjudicating Authority has the jurisdiction to initiate Corporate Insolvency Resolution Process by passing order of admission on an application of the Financial Creditor or it Assignee if the amount of debt exceeds Rupees One Lakh. Admittedly, the debt in respect of default allegedly exceeded the prescribed amount of Rupees One Lakh. Admission of a claim pursuant to collation and verification of claims by the Resolution Professional is a matter to be dealt with when the Corporate Insolvency Resolution Process is underway. Same is irrelevant at the stage of admission of application under Section 7 of the I&B Code. The challenge on this score is also without substance.
Adjudicating Authority has no jurisdiction to pass any order with regard to any matter pending before the Court of criminal jurisdiction. Further, the parties having given opportunity to move against the ‘Corporate Debtor’ under sub-section (6) of Section 60 of the ‘I&B Code’, the Adjudicating Authority cannot prohibit the aggrieved person to file a claim before the Court of competent jurisdiction or an application before the appropriate Forum.
The ‘Prevention of Money-Laundering Act, 2002’ relates to ‘proceeds of crime’ and the offence relates to ‘money-laundering’ resulting confiscation of property derived from, or involved in, money-laundering and for matters connected therewith or incidental thereto. Thus, as the ‘Prevention of Money Laundering Act, 2002’ or provisions therein relates to ‘proceeds of crime’, Section 14 of the ‘I&B Code’ is not applicable to such proceeding.