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2018 (8) TMI 1866 - NATIONAL COMPANY LAW TRIBUNAL — HYDERABAD BENCHAdmissibility of petition - initiation of Corporate Insolvency Resolution Process - Corporate debtor - default in payment of debt - contention raised by the SBI is that this petition is a mala fide petition to prevent the proceedings under the SARFAESI Act - whether the special resolution passed by the shareholders of the corporate debtor as required by section 10(3)(c) of the Code, which came into force with effect from June 6, 2018 is applicable to this petition, filed on May 9, 2018 by the corporate applicant under section 10 or not? HELD THAT:- It is settled that the pendency of any other proceeding for recovery of amount in default from the corporate debtor is no bar for initiation of corporate insolvency resolution process - The proceedings under the IB Code are having overriding effect over all other proceedings under other Acts in view of section 238 of the I and B Code, more so, when there is no repugnancy between the I and B Code and the SARFAESI Act. The date of initiation of the arbitration proceedings is not taken as criteria to give effect to the amended section 36 of the Arbitration and Conciliation Act - In the instant case, there is no provision in the Code prior to June 6, 2018 that require a special resolution passed by the shareholders of the corporate debtor to trigger corporate insolvency resolution process by a corporate applicant under section 10 of the I and B Code. Such a condition precedent is for the first time introduced by way of ordinance by replacing the earlier section 10(3) and by substituting section 10(3)(a), (b) and (c) which came into force with effect from June 6, 2018. It is not a case where an existing right has been taken away. It is a case where a special condition is made applicable for filing of, applications by the corporate applicants under section 10 of the I and B Code - therefore, a new condition was brought into the Code by way of amendment, such conditions cannot be given retrospective effect in my view. In the case on hand, the petition is filed on May 9, 2018 much prior to coming into force of amended section 10(3)(c), which came into force on June 6, 2018 - it is not just and proper to direct the corporate applicant to take the approval of the shareholders by applying the amended section 10(3)(c) of the Code. There are no grounds to reject this petition - petition deserves to be admitted - petition admitted.
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