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Insolvency and Bankruptcy - Case Laws
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- 2020 (3) TMI 1132
Maintainability of application - Appellant submits that the Deed of Guarantee for overall limit was executed by M/s. Genegrow Commercial Pvt. Ltd. on 05.10.2009 as ‘Guarantor’ and that the account of the ‘Corporate Debtor’ ‘Gee Pee Infotech Pvt. Ltd.’ (Principal Borrower) was declared ‘Non Performing Asset’ - scope of ‘Claim and Default’ primarily committed by the Principal Borrower - section 7 of the ‘I&B’ Code - HELD THAT:- It is not in dispute that the ‘Corporate Debtor’ (Being Corporate Guarantor of the Principal Borrower ‘Gee Pee Infotech Pvt. Ltd.) had executed the Guarantee Deed on 05.10.2011 in respect of overall Limit and sanctioned in favour of the ‘Financial Creditor’. Also that a supplementary Guarantee Deed was executed b....... + More
- 2020 (3) TMI 1131
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- Section 7(5) of the Code provides for admission of the application where the Adjudicating Authority is satisfied that (a) a default has occurred ; (b) the application under sub-section (2) of section 7 is complete ; (c) there is no disciplinary proceedings pending against the proposed resolution professional. The satisfaction of the three conditions is being examined: The first condition is that a default has occurred. The default in repayment of debt is supported by account statements filed by the bank at annexure P7 and certificate under section 2A(a) and 2A(b) of the Bankers' Books Evidence Act, 1891 in support of the account statements appended with the petition. It is the....... + More
- 2020 (3) TMI 1130
Revival under Resolution Plan - application for clarification in regard to treatment of aforesaid claims of work men and employees and such other claims which have accrued during the non-implementation period and that whether the same should have priority over other dues - HELD THAT:- The claims received during the period between July 18, 2018 till July 7, 2019 can neither be treated as a part of "insolvency resolution process costs" nor do they fall within the ambit of "liquidation cost" and hence, cannot be accorded priority over other dues in terms of the provisions of the law. In respect of the aforesaid claims received during the period between July 18, 2018 till July 7, 2019 the applicant may rely on the statutory treatment of claims as laid down in section 53 of the IBC. Application disposed off.
- 2020 (3) TMI 1129
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - financial debt is barred by time limitation or not - HELD THAT:- This Bench is of the view that the objections raised by the corporate debtor as regards to the authority for filing the petition under section 7 of the IBC and the financial debt being barred by limitation are not tenable. The financial creditor has placed on record the letter of authority issued in favour of Sh. P. Y. Jakkareddy, DGM, Corporation Bank and also the letters dated March 31, 2015 and February 13, 2018 clearly showing acknowledgment of debt by the corporate debtor within the limitation period, even if the date of default is considered as November 29, 2014 as pointed out by the corporate debtor. The financial creditor has established a default on the part....... + More
- 2020 (3) TMI 1128
Maintainability of Application - Initiation of CIRP - valid authorization - Despite reminders the corporate debtor failed to pay the outstanding dues and, therefore, the operational creditor was compelled to issue demand notice under section 8 of the I and B Code seeking payment of the outstanding amount - HELD THAT:- It is found that the petition is filed by one Ms. Sneha Ranade on the basis of resolution passed by the board of directors of the operational creditor company on June 24, 2015, i. e., much before the Insolvency and Bankruptcy Code, 2016 came into force - only an authorised person as distinct from a power of attorney holder can make an application under sections 7, 9 and 10 and required to state his position in relation to the financial creditor. Palogix Infrastructure P. Ltd. v. ICICI Bank Ltd. [2017 (10) TMI 913 - NATIONAL ....... + More
- 2020 (3) TMI 1105
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - Time Limitation - HELD THAT:- The ‘Corporate Debtor’/Respondent has neither challenged the decree as mentioned earlier nor filed any review till the date of the filing of the petition under Section 7 of the I & B Code. It is also clear that the Defendant No.1 to 5 in the said suit were jointly and severally liable to discharge their obligations of the decree above leaving it to the sole discretion of the Plaintiff/Appellant to recover the said amount from any of the said Defendants. Time Limitation - HELD THAT:- The ‘Corporate Debtor’/Respondent made a false statement before the Adjudicating Authority, and the Adjudicating Authority had no reason to disbelieve such....... + More
- 2020 (3) TMI 1104
Approval of Final Resolution Plan - section 31 of the IBC - extension of CIRP period - HELD THAT:- The resolution professional has examined the modified plan and has found it to be in compliance with section 30(2) of the IBC read with regulation 38 of the CIRP Regulations. The provision regarding waiver of any liability accruing in respect of minimum alternate tax (MAT) kept in resolution plan originally has been deleted in modified plan. The term of plan is increased from three years to seven years without affecting the feasibility and viability of the plan. The resolution professional Mr. Vikram Bajaj will be the monitoring and supervising agency for implementation of the plan. The remuneration of the monitoring agency shall be ₹ 1,50,000 plus taxes and out of pocket expenses at actual - The corporate debtor will stand amalgamated....... + More
- 2020 (3) TMI 1061
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - Existence of debt and dispute or not - HELD THAT:- The Respondent company has failed to repay the outstanding amount of ₹ 39,84,788/- arising in usual and ordinary course of business and has become commercially insolvent - it is clear that the Corporate Debtor has defaulted in making payment in terms of the agreement to be paid to the Petitioner/Operational Creditor. Date of Default is on 01.04.2016. Application admitted - moratorium declared.
- 2020 (3) TMI 1058
Directions to liquidator to restrain from invoking or encashing the bank guarantee - section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The burden is on the applicant to establish fraud in invoking bank guarantee. Admittedly, the bank guarantee is being invoked which is in terms of bank guarantee. It is not the case of applicant that any fraud was played in obtaining bank guarantee. Similarly, there is also no material to come to a conclusion that any fraud was played on the applicant in invoking the bank guarantee. It is also not the case of the applicant that any fraud was involved in invoking bank guarantee. It is true any disputed question of fact cannot be decided in a summary way. It is the case of applicant that it has not committed any breach of the performance of the obligations covered by the contract. Thus,....... + More
- 2020 (3) TMI 1057
Liquidation of Corporate Debtor - section 60(5) of the Insolvency and Bankruptcy Code, 2016 read with rule 11 of the National Company Law Tribunal Rules, 2016 - can this Adjudicating Authority ratify the Act of the liquidator subsequently, when the Act has specifically said that "prior approval" is must. And if so at what stage the de facto approval can be sanctioned and the effect of the same on the already filed suit/application? HELD THAT:- What ought to be done, if the parties failed to do. It cannot be ratified by the subsequent Act. However, the petitioner counsels vehemently argued that sanction of approval is only a formal Act. Hence, in the interest of justice and the overall view of the enactment for maximisation of the value of the assets of the corporate debtor. An approval will only amount to regularisation of appea....... + More
- 2020 (3) TMI 1056
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt or not - pre-existing dispute or not - HELD THAT:- The applicant granted several facilities including cash credit facility to the corporate debtor and the corporate debtor fully availed those facilities. Those facilities carry interest applicable from time to time as per the terms and conditions mentioned in the sanction letters. Therefore, the amount due to the financial creditor from the corporate debtor is a financial debt. In the instant application, from the material placed on record by the applicant, this Authority is satisfied that the corporate debtor committed default in paying the financial debt to the applicant. As can be seen from the written communication of the proposed insolvency resolution process, no disciplinary pr....... + More
- 2020 (3) TMI 1055
Approval of Resolution Plan - insolvency resolution of the corporate debtor as a going concern - section 30(6) read with section 31 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On perusal of the records, it is found that the resolution plan conforms to the criteria as provided under clauses (a) to (f) in section 30(2) of the Code and the CoC approved the resolution plan by 92.44 per cent. majority of voting share. The resolution plan also conforms to such other requirements as may be specified by the Board - On perusal of the resolution plan, it is found that it meets the requirement of section 31 read with section 30(2) of the Code. Therefore, the present application I. A. No. 664 of 2019 is allowed subject to certain observations. Thus, approval of the resolution plan does not mean automatic waiver or abatement of legal pro....... + More
- 2020 (3) TMI 1054
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- It is true that the proceedings under the Code are not in the nature of recovery. In the present application the financial creditor is seeking initiation of corporate insolvency resolution process by making prayer that all the financial creditors, operational creditors and other stakeholders may raise their claims and if corporate financial restructuring is possible then within the stipulated period it may be explored failing which the due process of law is to take its course. Therefore, by initiation of corporate insolvency resolution process the financial creditor is only highlighting the default committed by the corporate debtor with respect to its inability to pay. The same is....... + More
- 2020 (3) TMI 1007
Calling of CoC meeting - consideration of proposal of the resolution applicant dated July 25, 2019 - section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The e-mail which it sent dated July 25, 2019 by the resolution applicant is merely the revised commercial offer on the rejected plan submitted on July 18, 2019 which was rejected by the CoC and not a resolution plan in accordance with the provisions of the Code read with the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") and per the judgment of hon'ble apex court in ArcelorMittal India P. Ltd. v. Satish Kumar Gupta [2018 (10) TMI 312 - SUPREME COURT] "the Adjudicating Authority has no jurisdiction to challenge the commercial wisdom of CoC to approve or reject the r....... + More
- 2020 (3) TMI 919
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - scope of 'suit' and 'proceedings' - HELD THAT:- The provisions of section 69(2) of the Indian Partnership Act, 1932, applies to "suits" and therefore, cannot apply to "proceedings" under the IBC. There is a trinity of entities which were dealing with the Corporate Debtor. All the three entities were being managed by the same set of individuals. There were inter se business transactions between the triad of entities controlled by the same set of individuals and the Corporate Debtor. There was a fallout between the partners of the Operational Creditor, and the remaining partner decided to use this position to advantage by issuing a Demand Notice to the Corpor....... + More
- 2020 (3) TMI 918
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- Financial Creditor has proved existence of debt and default. Moreover, the Corporate Debtor (Developer) admitted and acknowledged an advance payment of ₹ 6,65,184 received from the Financial Creditor (Purchaser) vide para 2(i) of the construction agreement. But, the Corporate Debtor (Developer) had not adhered to the terms and conditions as per construction agreement and failed to handover the constructed apartment at Appur Village within the prescribed time. This Bench is inclined to admit this application - application admitted - moratorium declared.
- 2020 (3) TMI 855
Validity of declaration of wilful defaulter - HELD THAT:- The initial order of the Identification Committee declaring the petitioners as well as the PMPL as wilful defaulters, was upheld both by the coordinate bench of this court on April 6, 2017 and affirmed by a division bench of this court, sitting in appeal over the order of the learned Single Judge, passed on June 12, 2017 - The fresh representation thereafter, before the Review Committee, might have contained several allegations, including some already adjudicated by the Identification Committee on merits, which attained finality, the scope of enquiry of the Review Committee, which was opened up only by the order of the Supreme Court dated May 8, 2019, was restricted, by the said order itself, to the subsequent event of corporate resolution and its effect on the ‘wilful defaul....... + More
- 2020 (3) TMI 854
Violation of Principles of Natural Justice - an opportunity of hearing to the petitioner before passing the impugned order, not afforded - Section-5(8)(F) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In the opinion of the Court, the petitioner has failed to make out any extra ordinary grounds to invoke Article-226 of the Constitution of India. As recorded in the preceding part of the order, the proceedings before the NCLT for proceeded in due course and the order-sheet also reflects the proceedings and the reasoned orders passed by the NCLT from time to time - The Court is therefore, of the view that though writ petition can be maintained, in view of the vast powers of the High Court under Article-226 of the Constitution of India. However, in the facts of this case, the Court is not inclined to exercise such powers in view of....... + More
- 2020 (3) TMI 853
Maintainability of petition - non-performing asset - Section 14(1)(a) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- This is a writ petition instituted by a director, when admittedly, on the date of filing of the writ petition an Interim Resolution Professional had been appointed by the NCLT for executing Corporate Insolvency Resolution Process. This fact was suppressed. It was only stated in the affidavit that the respondent bank had filed a claim petition in C.P.No.1100 of 2018 before the National Company Law Tribunal (NCLT), Chennai. No other fact has been disclosed in the writ petition. Therefore, prima facie I hold that the Managing Director has suppressed a vital information from this Court while filing the writ petition and on that ground, the writ petition, has to be dismissed as not maintainable. The fact is that the o....... + More
- 2020 (3) TMI 777
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- It is not the case of the Corporate Debtor that there is no default, but they are submitting that right of the Petitioner to bring action under the Code is subject to and controlled by Inter-Creditor Agreement wherein the Creditors has set out certain procedures before taking any action. In a nutshell, the Corporate Debtor is trying to say that the Code is subservient to the Inter-Creditor Agreement, comply with the conditions in the Inter-Creditor Agreement and ignore the Code at least for the time being. The issued raised by the Corporate Debtor cannot come in the way of admission of this Petition in view of the fact that the Petitioner has established debt and default beyond do....... + More
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