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Insolvency and Bankruptcy - Case Laws
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- 2020 (7) TMI 145
CIRP - Reimbursement of Compounding fees - Who is responsible for offence or compounding of offence under the Income Tax Act which was committed much before the initiation of CIRP proceedings - HELD THAT:- Admittedly the CIRP commenced vide order dated 7-8-2017 by the Adjudicating Authority under section 7 of the I&B Code and Mr. Savan Godiawala was appointed as Interim Resolution Professional and subsequently confirmed as Resolution Professional of the Corporate Debtor thereafter, vide order dated 27-8-2018 passed by the Adjudicating Authority, the Appellant Mr. Savan Godiawala was appointed as the Official liquidator of the Corporate Debtor i.e., Respondent No. 2. It is also admitted fact that on 31-3-2016 Income-tax Office, Shri Mandip ACIT, Income-tax Department filed complaint under section 276-B read with Section 278-B of the In....... + More
- 2020 (7) TMI 144
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - possession of apartment with stipulated time limit - HELD THAT:- In the present case, the Respondent emphatically contends that it could not commence construction despite approval of the building plan dated 23rd July 2013, as the said approved imposed certain pre-conditions including but not limited to (a) obtaining grant of approval by Ministry of Environment and Forest, (ii) Fire Safety Approval before the commencement of construction. The Respondent obtained environmental approval on 12th December 2013, and the said approval reiterated the requirement for approval of the Fire Department. Therefore, the Respondent applied for Fire Safety Approval on 23rd October 2013, before starting any co....... + More
- 2020 (7) TMI 123
CIRP Process - scope of Financial Creditor - whether the 'Inter-Creditor Agreement' devising a mechanism for enforcement of rights qua the 'Corporate Debtor' would bar an individual Creditor from triggering 'Corporate Insolvency Resolution Process' in the event of default qua outstanding liability in respect of its financial debt without the consent of other lenders forming the consortium of the same 'Corporate Debtor' - HELD THAT:- The statutory right across the ambit of Section 7 of the 'I&B Code' cannot be curtailed or made subservient to any 'Inter-Creditor Agreement'. The contractual rights, unless recognised by the statute as a permissible mode, would not override the statutory mechanism and right created and enforceable under statute - The language employed in this clause is eloqu....... + More
- 2020 (7) TMI 122
Approval of Resolution Plan - Section 31(1) of the Code - CIRP process - extension of CIRP period till 3-1-2019 - HELD THAT:- The resolution plan states that upon NCLT Approval Date, an Interim Monitoring Committee will be constituted. The constitution of the Committee is given in para no VIII of the plan. The terms of the plan and its implementation schedule is stated to be 90 days from the approval of the plan by the Adjudicating Authority. The RA will make full and final payment of ₹ 5150 lakhs to secured financial creditor i.e. SBI out of which ₹ 500 lakhs will be deposited at the end of 30 days from the approval of the resolution plan and the balance ₹ 4650 lakhs will be paid in an Escrow Account within 90 days from the approval of the resolution plan. The payment of ₹ 24.43 lakhs to operational creditors is p....... + More
- 2020 (7) TMI 121
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - scope of Financial Creditor - HELD THAT:- On detailed perusal of the clause 64 & 65 it is evident that a transaction will fall in the residuary clause (f) of section 5(8) under the category of financial debt, only if the transaction has commercial effect of borrowing, as such it will not fall within the category of financial debt. Moreover, Hon'ble Supreme Court in this clause 65 made reference to real estate allottee in order to conclude this observation which is not the case here as the transaction is in relation to purchase of land which does not fall within the ambit of real estate transaction. This bench is of the view that the contentions/ or claims being raised by the M/s. Vers....... + More
- 2020 (7) TMI 120
Maintainability of application - challenge on the ground that Winding up Petition against Shree Ram Urban Infrastructure Ltd. has already been admitted by the Hon'ble High Court of Bombay on 5th October, 2016 - HELD THAT:- The similar issue fell for consideration before the Hon'ble Supreme Court in Forech India (P.) Ltd. v. Edelweiss Assets Reconstruction Co. Ltd. [2019 (1) TMI 1442 - SUPREME COURT]. In the said case, the Hon'ble Supreme Court noticed the pendency of the Application under sections 433 and 434 of the Companies Act, 1956 and winding up petition, being 42 of 2014 was filed by Forech India Ltd. before the Hon'ble High Court of Delhi. It was held by this Appellate Tribunal that since there was no winding up order by the Hon'ble High Court, the Financial Creditor's petition would be maintainable. As a re....... + More
- 2020 (7) TMI 59
Time Limitation - section 7 of the Insolvency and Bankruptcy Code, 2016 - CIRP process - HELD THAT:- The effect of Section 18 of the Limitation Act, 1963 is that an acknowledgment of liability in respect of a right made in writing and signed by the debtor before expiration of prescribed period for a suit or an application would result in a fresh period of limitation being computed from the time when acknowledgment was so signed. It is abundantly clear that such acknowledgment of liability must be made by the debtor in writing and signed by him before the expiration of prescribed period of limitation. The ample evidence brought on record by the 'Financial Creditor' and not disputed, denied or refuted by the 'Corporate Debtor' brings it to the fore that the financial debt is payable and the acknowledgment in writing before e....... + More
- 2020 (7) TMI 58
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Debt, as defined under the Code in section 3(11) means a liability or obligation in respect of a claim which is due from any person, and includes a financial debt or an operational debt. Such a debt would arise from a claim, as defined in section 3(6), i.e. from a right to payment in the hands of the Creditor. Such a right could arise from the terms and conditions agreed to by the concerned opposite parties, in the shape of a Contract or an Agreement or Board Resolution, if any, so that the same could be enforced in the case of default. Section 3(12) of the Code defines as non-payment of a debt when the whole or part or instalment of the amount of debt has become due and payable a....... + More
- 2020 (7) TMI 57
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- There is a violation of the consent terms which have been entered into between the financial creditor and the Corporate Debtor - The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Application admitted - moratorium declared.
- 2020 (7) TMI 56
Liquidation of Corporate Debtor - sections 33 & 34 of the Insolvency and Bankruptcy Code, 2016 - grievance of the Appellant is that he is against the appointment of the Liquidator - HELD THAT:- We are not inclined to interfere with the impugned order as after the liquidation the 'Committee of Creditors' has no role to play and they are simply a claimant whose matters are to be determined by the Liquidator and cannot move an application for removal of Liquidator in absence of any provisions under the law. Appeal dismissed.
- 2020 (7) TMI 55
CIRP Proceedings - Raising fresh demand of interest after approval of Resolution Plan - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- Though the Applicants have mentioned in their respective applications that CD/RP assured them, payments of past invoices and protection of supplies made during CIRP as per IRP Cost, this Adjudicating Authority do not find any evidence, in the form of any communication, in black and white to prove their contentions. We have also observed that RP vide his e-mail dated 25-10-2018 informed the Applicant that all payments made on or after 18th July, 2017 until today have been against the supplies made by the Applicant since 18th July 2017 and the Applicant would be free to set off their bills against supplies made by the Applicant from 18th July 2017 o....... + More
- 2020 (7) TMI 30
Maintainability of application - Restoration of currency of CIRP without the knowledge and/or consent of the Applicant - HELD THAT:- The contention that this application is not maintainable is found devoid of any merit. As per section 66(1) of the Code, if the AA is satisfied that during the corporate insolvency process the directors of the CD withdrawn money from the bank account of the CD with an intent to defraud creditors or for any fraudulent purposes, pass an order against the person liable to make such contributions to the assets of the CD. As per section 74 (1) if the AA is satisfied that the CD or any of its officer violates the provisions of section 14, any such officer who knowingly or willfully committed such contravention shall be punishable with fine not exceeding 3 lack or with imprisonment not exceeding 3 years or with bot....... + More
- 2020 (7) TMI 29
Restoration of application - application was dismissed for non-prosecution - Government dues - Operational Creditor - HELD THAT:- It is clear that Government dues fall under the category of "Operational Creditor" inasmuch as 'a debt' in respect of the payment of dues arising under any law for the time being in force and payable to the Central Government, and State Government or any local authority are considered as 'Operational creditor' - To be more precise, these debts occur during the course of operation of the Corporate Debtor. Application disposed off.
- 2020 (7) TMI 6
Approval of Resolution Plan - relevant time for submission of resolution plan - HELD THAT:- Admittedly, the A-1 filed its resolution plan before the Adjudicating Authority on 13-2-2019 whereas, the last date for submission of Resolution Plan before RP was 15-10-2018. Resolution plan of successful Resolution Applicant i.e. Dera Finvest (P.) Ltd. (R-2) was approved by 98.72 % of the Committee of Creditor in e-voting conducted on 1-11-2018 and 2-11-2018. When the Resolution Plan is filed before the Adjudicating Authority then the Authority has to satisfy that the Resolution Plan approved by the Committee of Creditor fulfills the requirements as specified in Sub-Section 2 of Section 30. However the Adjudicating Authority cannot direct the CoC to consider the second Resolution plan submitted before the Authority although the second Resolution ....... + More
- 2020 (7) TMI 5
Voluntary Liquidation - applicability of provisions of Section 59 of the Insolvency and Bankruptcy Code, 2016 - whether the appeal under Section 42 of the 'I&B Code' is maintainable before the Adjudicating Authority (National Company Law Tribunal)? HELD THAT:- It is beyond controversy that 'M/s. TEIL Projects Limited' is undergoing Voluntary Liquidation Process contemplated under Chapter V of Part II of the 'I&B Code'. It is indisputable that Section 59 of the 'I&B Code' incorporated in Chapter V of Part II of the 'I&B Code' providing for 'Voluntary Liquidation of Corporate Persons' stands duly notified vide S.O. 1005 (E) dated 30thMarch, 2017 and has been enforced w.e.f. 1st April, 2017 - The conditions necessary for initiating a Voluntary Liquidation Process, as enumerated ....... + More
- 2020 (6) TMI 692
Jurisdiction - Infringement of the Copyright of successful bidder - defendant is a State owned company - plea of the defendant of fair dealing protected under Section 52(1)(a) of the Copyright Act is misconceived for the reason fair dealing is only applicable to private or personal use including research and does not apply to commercial activity - HELD THAT:- Sub-clause (b) of Clause 16 of the resolution plan thus clarifies that all consents, licenses, approvals, rights and entitlements, benefits, privileges whether under law, contract, lease or license granted in favour of the corporate debtor or to which the corporate debtor is entitled or accustomed to shall notwithstanding any provision to the contrary in their terms be deemed to continue without disruption for the benefit of the corporate debtor. Thus, the use of terms 'entitled ....... + More
- 2020 (6) TMI 691
Oppression and Mismanagement - Sale of entire assets of the Respondent No. 1 Company sold illegally for the purpose other than the object of the Company - misuse of power of attorney granted unilaterally by Respondent No. 2 without notice - HELD THAT:- The Appellant is free to exercise her remedy under the Companies Act, 2013 when the Company law provides for "Oppression and Mismanagement" and hence imposition of costs needs review. It is also evident that the Appellant came to know about the Board Resolution dated 4-9-2014 for the first time when Respondent No. 3 has submitted its reply affidavit dated 8-3-2019 and at that juncture the Appellant wish to file a rejoinder affidavit but the NCLT refuse to allow her to do so and subsequently reserved the judgment. Since the Companies Act, 2013 provides for restrictions on powers of....... + More
- 2020 (6) TMI 690
CIRP Process - bank account of the Corporate Debtor was being used without prior approval of the IRP - HELD THAT:- The Directors acted wholly illegally once moratorium had been applied, in going ahead and withdrawing monies from the accounts at the back of IRP by even issuing cheques "Self". Such acts cannot be justified in any manner. The Appellant and Deepak Daga kept telling this Tribunal that they would return the money and in spite of undertaking given and time fixed, the money has not been returned and the CIRP process is seriously hampered. Consuming whole month stated in the Undertaking and without returning any money, we find no substance in the hollow statements in I.A. No. 1075 of 2020 - Application seeking time to comply with Undertakings. The I.A. wrongly states that undertakings given were without prejudice. They w....... + More
- 2020 (6) TMI 689
Jurisdiction to pass order for re-bidding - Approval of Resolution Plan - section 31 of the I&B Code, 2016 - Whether the Adjudicating Authority has exceeded its jurisdiction in passing order for re-bidding, despite the approval of the Resolution Plan by CoC, with a vote share of 84.70% of votes? HELD THAT:- In the instant case, the Adjudicating Authority has overturned the decision of the CoC regarding approval of the Resolution Plan despite being approved by 84.70 percent of the vote share of the CoC, on the pretext of maximisation of value of the corporate debtor. The provisions investing jurisdiction and authority in the NCLT has not made the commercial decision exercised by the CoC of not approving the resolution plan or rejecting the same, justiciable. In the circumstances, it is clear that the Adjudicating Authority cannot inter....... + More
- 2020 (6) TMI 688
Admissibility of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Existence of debt and dispute or not - HELD THAT:- The pendency of actions under the SARFAESI Act or actions under the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 does not create obstruction for filling an Application under section 7 of Insolvency and Bankruptcy Code 2016, specially in view of Section 238 of IBC. The Application is more to bring about a Resolution of Corporate Debtor than any penal action or any recovery proceedings. Appeal dismissed.
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