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Insolvency and Bankruptcy - Case Laws
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2018 (12) TMI 1989 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Furnishing of documents - promoter/director is hiding information from the Resolution professional as to ensure that the transaction entered into with the related companies; its subsidiaries and third parties are not shown as receivables/debts payable to the Corporate Debtor - HELD THAT:- The Appellant is directed to allow the Liquidator to inspect the records of ‘Urban Rupi Infrastructure Private Limited’ and ‘Neelkanth Palm Realty Private Limited’ to trace out if any of the records of the Corporate Debtor are available therein or records as mentioned in the Chart given. If any of the record of the Subsidiary Company related with the Corporate Debtor as recorded in the chart aforesaid is traced, the Appellant will hand over the copies of same to the Resolution Professional/ Liquidator.
It is made clear that the Resolution Professional/ Liquidator has no jurisdiction to take over any asset of the subsidiary company of the Corporate Debtor including ‘Urban Rupi Infrastructure Private Limited’ and ‘Neelkanth Palm Realty Private Limited’, therefore, the Resolution Professional cannot take the original documents available with the subsidiary companies though he may take authenticated photocopies of those documents.
Part of the impugned order dated 26th April, 2018 wherein observation has been made against the Appellant is set aside and stands modified to this effect - appeal disposed off.
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2018 (12) TMI 1984 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Violation of moratorium in terms of Section 14 of the IBC - termination of Mining Lease during declaration of moratorium - request for Deemed Extension of the said Mining Lease rejected - HELD THAT:- Based on the enquiry, an Order came to be issued on 26.09.2018 by the Under Secretary to Government, Commerce & Industries Department (Mines}, State of Karnataka whereby the Application filed for Deemed Extension of Mining Lease bearing ML No.2293 by the IRP was rejected in spite of the recommendations of the Director, Department of Mines and Geology, Bangalore.
Therefore, the Order dated 26.09.2018 issued by the Under Secretary to Government, Commerce & Industries Department (Mines), State of Karnataka rejecting Deemed Extension of Mining Lease bearing ML No.2293 is hereby set aside, as the same is in violation of the Moratorium declared by this Authority on 12.03.2018 under Section 14(1) of the I&B Code, 2016. Consequently, the Respondent Nos. 1 to 3 are directed to execute Supplement Deeds extending the period of the Mining Lease bearing ML No.2293 upto 31.03.2020, in accordance with Sec. 8 A (6) of the M.M.D.R Act, 1957 as amended under the Mines and Minerals (Development and Regulation) Amendment Act, 2015, within a period of two weeks from the date of the receipt of the certified copy of this Order.
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2018 (12) TMI 1978 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Right of Operational Creditors to claim representation in the meeting of the Committee of Creditors - HELD THAT:- Taking into consideration facts and circumstances of case, the representative of ‘Operational Creditor’ allowed only to watch the proceedings of the ‘Committee of Creditors’ as agreed by the learned counsel for the ‘Resolution Professional’. The representative cannot object or participate in the proceedings of the ‘Committee of Creditors’ and if any contrary decision is taken, in such case, the ‘Operational Creditor’ may move proper application before appropriate forum at proper stage. ‘Operational Creditor’ may obtain the name of the representative who may watch the proceedings - This order cannot be cited as precedence in any other case.
Appeal disposed off.
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2018 (12) TMI 1967 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI PRINCIPAL BENCH
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied with as discussed in detail in the case of ECL FINANCE LIMITED VERSUS DIGAMBER BUILDCON PVT LTD [2018 (11) TMI 1741 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI] are complied with where it was held that It is evident from the record that the application has been filed on the Performa prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete.
A conjoint reading of the aforesaid provision would show that form and manner of the application has to be the one as prescribed. It is evident from the record that the petition has been filed on the proforma prescribed under Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that amount was duly disbursed and a default has occurred. The petition under sub section 2 of Section 7 is complete as no disciplinary proceedings are pending against the proposed Interim Resolution Professional. Thus, the petition warrant admission.
Petition admitted - moratorium declared.
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2018 (12) TMI 1946 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- The Operational Creditor has fulfilled all the requirements of law for admission of the Application. This IRP is also directed to cause public announcement as prescribed under Section 15 of the I&B Code, 2016 within three days from the date the copy of this Order is received, and call for submissions of claim by the creditors in the manner as prescribed.
The scheme is approved - application allowed.
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2018 (12) TMI 1945 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - allottee or not - HELD THAT:- The term ‘Financial Creditor’ is defined in sub-section (7) of Section 5 of the Code as meaning any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to. The term ‘Financial Debt’ is defined in sub-section 8 of Section 5 of the Code and the relevant part of the provision upon which the learned counsel for the petitioner has relied upon during arguments and also stated in the synopsis to the original petition is sub-section 8(f) of Section 5 of the Code.
Having given thoughtful consideration to the contention raised on behalf of the petitioner the contention that the amount invested in the project by the petitioner can be termed as financial debt as defined in Section 5(8)(f) of the Code, cannot be accepted - In order to bring the transaction within the definition of financial debt the basic requirement is that the money was disbursed against the consideration of time value of money which does not exist in the present case.
The learned counsel for the petitioner relied upon the judgment of Hon’ble National Company Law Appellate Tribunal, New Delhi in NIKHIL MEHTA AND SONS VERSUS AMR INFRASTRUCTURE LTD. [2017 (8) TMI 1017 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] in support of his contention. The facts of that case are quite different. In the said case the petitioner entered into different agreements/MOU with the Company (corporate debtor) for purchase of 3 units being a residential flat, shop and office space in the projects. That was therefore the case of a home buyer.
It was further observed that the question whether the appellants came within the relevant clause of one of the Memorandum of Understanding dated 12.04.2008. In the said case the Investor was interested in booking of a shop for a total consideration amount of 46,67,402/- and the mode of payment by cheque was also mentioned. The relevant term of Memorandum of Understanding was that most of the consideration paid as on 19.03.2008 by the Investor was on the condition that the Developer was ready to pay the monthly committed returns to the Investor. The Investors however was not interested to get the monthly return till December 2008 i.e. for 9 months. Accordingly the Developer undertook to make payment of the consolidated amount of 99,600/- less TDS as applicable every calendar month to the Investor as committed return w.e.f. January 2009 up to the date of handing over of the possession - It was thus clear that the appellants had chosen the committed return which the Developer in turn agreed to pay monthly committed returns thereby covered within the definition of the term ‘Financial Creditor’ as the transaction was found to be having the time value of money and thus the case was found to be covered within the definition of Section 5(8)(f) of the Code.
In the present case there is no such term of the assured return or any agreement which may amount to the repayment for the time value of money. Simply because the petitioner has invested the money for the project being a Promoter would not fall within the definition of term ‘Financial Creditor’ under any circumstance. This was not a case of a forward sale or purchase agreement having effect of borrowing rather the petitioner was equally interested in the project to be marked for sale.
Allottee or not - HELD THAT:- The term “Allottee” is defined in clause (d) of Section 2 of RERA Act. It says that allottee in relation to a real estate project, means the person to whom a plot, apartment or buildings, as the case may be, has been allotted, sold (whether as freehold or leasehold) or otherwise transferred by the promoter, and includes the person who subsequently acquires the said allotment through sale, transfer or otherwise but does not include a person to whom such plot, apartment or building, as the case may be, is given on rent - in the facts of the present case, under no circumstance the petitioner can be considered an allottee under RERA Act. As a Promoter, the petitioner is equally interested in the completion of the project to be marked for the purpose of its business and cannot be an allottee at all.
The petitioner is not covered within the definition of the term “Financial Creditor” as defined in Section 5(7) of the Code - petition dismissed.
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2018 (12) TMI 1942 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- On perusal of the Petition and the documents annexed with the Petition, this Bench is of the considered view that there are debts and the Corporate Applicant has committed default in repayment of the debts and the Petition contains the particulars as required u/s 10 of the Code.
Application admitted - moratorium declared.
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2018 (12) TMI 1936 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- In view of lack of response by way of payment of the amount claimed in default or notice of dispute being issued to the Operational Creditor on the part of the Corporate Debtor, the present application has been preferred under Section 9 of IBC, 2016 read along with attendant rules seeking for the initiation of Corporate insolvency Resolution Process (CIRP) as against the Corporate Debtor wherein an amount of debt in a sum of ₹ 33,44,351/- is claimed as the amount in default which became due and payable after the expiry of 7 days from the date of the respective invoices.
Vide order dated 05.06.2018 it is seen that upon service of the notice of the Application, the Corporate Debtor is being represented by Mr. Rahul Sharma, Advocate. It is seen vide order dated 24.07.2018 the liabilities are been admitted by the Corporate Debtor and hence no reply is filed. Under the circumstances of further non-appearance of Corporate Debtor vide order dated 12.10.2018, this Tribunal was constrained to proceed with the matter exparte in relation to the Corporate Debtor - That the Operational Creditor has filed an affidavit along with the petition as mandated under section 9 (3) (b) of the Insolvency and Bankruptcy Code, 2016 thereby submitting that a demand notice U/s 8(1) of the IBC, 2016 dated 19.03.2018 to which no reply was received raising any dispute of the unpaid operational debt and no payment towards the outstanding debt has been received by the Operational Creditor.
The Corporate Debtor accepted the liabilities and a default of debt due to the Operational Creditor is also in existence remaining unsatisfied as evident prima facie, this Tribunal is of the considered view that this petition requires to be admitted and that CIRP process is required to be initiated against the Corporate Debtor - the Application/ Petition stands admitted in terms of Section 9(5) of IBC, 2016 and the moratorium shall come in to effect as of this date - Application allowed.
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2018 (12) TMI 1924 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI PRINCIPAL BENCH
Allocation of voting share to the CoC, as per the agreement - HELD THAT:- The RP could not have allocated voting share to the Capri Global Capital Limited by taking total loan amount of all the three corporate debtors whereas only one of them is involved in the present proceedings. The CoC would tilt in favour of Capri Global as against the voting share of Home Buyers’ if the whole loan amount of three companies is clubbed.
List for further consideration on 15.01.2019.
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2018 (12) TMI 1921 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial debt or not - Guarantee or not - existence of debt and dispute or not - whether the undertaking of the Corporate Debtor to purchase the loan in part or whole in pursuance of clauses 2 and 4.2 of the Loan Purchase Agreement (Annexure A/ 5) amounts to guarantee within the meaning of Section 126 of the Contract Act? - whether the Corporate Debtor by executing the Promoter's undertaking, deed of pledge and undertaking dated 27.03.2015 as an additional contractual comforts providing that the Corporate Debtor undertook to arrange for funding any cost overrun in the project and shortfall in payment to lenders in the event of termination of the Concession Agreement would arnount to 'Guarantee'?
HELD THAT:- There is no doubt left that Concession Agreement was terminated by the NHAI on 25.05.2018 resulting in the emergence of right provided in the Promoter's Undertaking, Deed of Pledge and the Corporate Debtor undertaking dated 27.03.2015 (Second Promoters Undertaking).
A bare perusal of Section 126 of the Contract Act makes it patent that it demystify a contract of guarantee to mean a contract to perform the promise, or discharge the liability of a third person in case of his default. The parties involved are known as 'surety' 'principal debtor' and the 'creditor'. A contract of guarantee involves three parties: creditor, surety, and principal-debtor. A contract of guarantee must, therefore, involve a contract to which all those parties are privy. A guarantee is an undertaking to indemnify, if some other person does not fulfil his promise. The liability under a contract of guarantee is conditional on the default of the principal-debtor, and hence does not amount to a 'promise to pay' - It is evident from the facts of this case that Principal Debtor are EIIL and DHPL. The Corporate Debtor is the 'Surety' and the applicant is 'Creditor'. The essential ingredients of contract of guarantee are also fulfilled as is patent from the preceding paras. As per various clauses surety has stood guarantee for the facilities given in case of default by the Principal Debtor. The default has occurred and the amount is recoverable from the Corporate Debtor. If that be so then the Resolution Professional was not justified to decline the claim made by the applicant.
It may be true that every security interest would not be a guarantee but in the present case as already held that 'NonDisposal Undertaking' coupled with other would amount to Guarantee.
A 'financial creditor' is a person to whom financial debt is owed and the financial debt means a debt along with interest which is disbursed against consideration for the time value of money. The financial debt in the present case is the amount of liability in respect of any of the guarantee as referred in clauses (a) to (h) of Section 5 (7) of the Code. Therefore, any amount raised under any other transaction which has the commercial effect of a borrowing would be considered as financial debt as is specified by Section 5 (8) (f) of the Code.
The Corporate Debtor is liable to repay the amount granted by the ICICI Bank Limited to Era Infrastructure (India) Limited and Dehradun Highways Project Limited, as a Financial Debt as per the provisions of the Code - Application allowed.
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2018 (12) TMI 1914 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Seeking removal of Resolution Professional - order of liquidation has been passed u/s 33(1)(a)/34(1) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- No ‘resolution plan’ was approved by the ‘committee of creditors’ and in the meantime 270 days having lapsed on 5th of September, 2018, the ‘Resolution Professional’ filed a miscellaneous application for liquidation, which is accepted and order of liquidation has been passed. On such order, as the ‘committee of creditors’ ceased to exist and become functus officio even if we set aside the impugned order dated 31st October, 2018 and remove Mr. V. Nagarajan, the order of liquidation cannot be declare illegal as more than 270 days having passed. Thus, no relief can be granted.
The appeal is dismissed.
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2018 (12) TMI 1902 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Liquidation of the Corporate Debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 (in short, 1&B Code, 2016) read with Rule 11 of the National Company Law Tribunal Rules, 2016 - HELD THAT:- It is stated by the Resolution Professional that in the final Meeting of the CoCs held on 02.05.2018, the CoC has made discussion and deliberation regarding the viability of a revival of the Corporate Debtor and found the same to be negative since the Corporate Debtor which is an Aviation Company, neither had an Aircraft nor a License from DGCA and under such circumstance, pumping of investment towards hiring an Aircraft was commercially unviable. Therefore, the CoCs unanimously has passed a Resolution inter-alia for Liquidation of the Corporate Debtor.
The CoC has agreed to the request of one of the suspended Directors of the Corporate Debtor and conveyed its decision to liquidate the Corporate Debtor by duly including and treating the land owned by the personal guarantors and mortgaged to the Financial Creditor as an asset vested with the Corporate Debtor.
This authority orders for liquidation of the Corporate Debtor viz., M/s. Air Carnival Private Limited. - Application allowed.
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2018 (12) TMI 1896 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Seeking withdrawal of CIRP initiation application - HELD THAT:- The application filed by the applicant – Federal Bank Ltd. (1st Respondent herein) for withdrawal of the application under Section 7 in terms of Section 12A of the I&B Code, 2016 has been allowed and the ‘corporate insolvency resolution process’ against the ‘Corporate Debtor’ has been withdrawn. In view of such development no further order is required to be passed.
The appeal stands disposed of in terms of order dated 29th November, 2018 passed by the Adjudicating Authority.
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2018 (12) TMI 1864 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied - After a conjoint reading of the aforesaid provision along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, it is satisfying that a default has occurred and the application under sub section 2 of Section 7 is complete. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional.
Petition admitted - moratorium declared.
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2018 (12) TMI 1847 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL
Disqualification of Corporate Debtor to file an application under Section 7 or 9 to initiate Corporate Insolvency Resolution Process against its own debtor - HELD THAT:- Taking into consideration the fact that 270 days has already over and further time of 90 days under Section 55 of I&B Code is also over and as the moratorium period has come to an end, we are not inclined to deliver on the claim of S. N. Plumbing Pvt. Ltd. qua IL&FS Engineering and Construction Company Ltd. If S. N. Plumbing Pvt. Ltd. initiates proceeding under Section 7 or Section 9 against IL&FS Engineering and Construction Company Ltd., in such case, the Adjudicating Authority will decide the question uninfluenced by the observations made in the impugned order.
If M/s Mandhana Industries Ltd. through its present proprietor files any application under Section 7 or Section 9 of the I&B Code against M/s Instyle Exports Pvt. Ltd., the Adjudicating Authority will decide the matter uninfluenced by the observations made in the impugned order.
Appeal disposed off.
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2018 (12) TMI 1834 - NATIONAL COMPANY LAW TRIBUNAL, BENGALURU
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - what are ingredients of Section 7 of Code to be considered, while considering an application filed under section 7 of the Code? - HELD THAT:- Whenever Corporate Debtor committed default, a Financial either by itself or jointly may file an application/ Petition in prescribed form by furnishing record of default in question, suggesting name of Resolution professional to act as Interim Resolution Professional. On being satisfied that default has occurred, application filed is complete, there are not disciplinary proceedings against name Resolution Professional, the Adjudicating Authority may by an order admit the case by initiating CIRP against Corporate Debtor, appointing Resolution Professional, imposing moratorium etc, failing which application can be rejected.
It is not in dispute and there cannot be in dispute that the Applicants Banks have disbursed loans in question on various dates as mentioned above. The Banks have tried its level best to regularise the accounts of corporate debtor by various methods like restructuring terms of loans, further finance etc. However, the Corporate Debtor failed to act to the satisfaction of Banks. Therefore, the Banks have resorted various legal remedies available to them under SARFAESI, initiating proceedings before DRT, DRAT by the Banks and the Respondent too has filed criminal cases against the official of Bank and other people. There are serious allegations of fraud and cheating on the part Corporate Debtor in diverting funds of the Company resulting registering a case by the CBI against the personnel of Corporate Debtor.
It is a settled position of law that IBC is a codified law with a particular object behind it, in order to provide speedy remedy to resolve the disputes arise in corporate sector - the account of Corporate Debtor was declared as NPA by all consortium of Banks as early as 2010 and onwards, and the efforts made by the Banks to restructure the loans were failed. So far as the contention with regard to laches and limitation is concerned, as raised on behalf of Corporate, it is to be noted that there are various proceedings issued by the Applicant's Banks as soon as accounts of Corporate Bank became irregular and tried to restructure its accounts. Therefore, admittedly, the Accounts of Corporate with the Banks became NPAs right from 2010.
It is not the case of the corporate debtor that it has repaid the loan in question but it contends that default in question is not wilful and the Banks are responsible for that situation. Initiation of criminal proceedings by the parties would not bar the Adjudicating Authority to take judicial notice of the issue involved in the case. The Corporate Debtor is admittedly placed insolvent position and the remedies initiated by the Applicants under other acts also would not bar the Adjudicating Authority to entertain the application. Since the Adjudicating Authority has already allowed IA No. 150 of 2018 seeking amendment was already allowed by an order dated 11th July, 2018 and filed amended Application, the allegations with regard to defective application etc as raised by the respondent are no longer tenable.
Application admitted - moratorium declared.
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2018 (12) TMI 1833 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Directions against the Resolution Professional to accept the Petitioner/Non-Applicant’s Proof of Claim - HELD THAT:- From the very fact stated in the Petition that the resolution plan has already been approved by the CoC, after approval of the resolution plan, the Resolution professional does not have any power to entertain any claim submitted by any of the creditors. It is to be made clear that after approval of the resolution plan by the CoC, Code provides the approval of the resolution plan by the Adjudicating Authority.
It has been further informed by the applicant that Resolution Professional has applied for the approval of the Adjudication Authority, which is pending before this Bench. At this stage, no such direction can be given to the Resolution professional for accepting the claim of the applicant. There is no provision in the Code, which permits that after approval of the resolution plan by the CoC, Resolution professional is authorised to accept any claim from any of the creditors - Therefore, application filed by the Financial Creditor/Non applicant is not maintainable at this stage, hence rejected.
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2018 (12) TMI 1821 - NATIONAL COMPANY LAW TRIBUNAL — ALLAHABAD BENCH
Maintainability of application - initiation of CIRP - Declaration of insolvency commencement date - whether the insolvency commencement date is August 9, 2017 or August 9, 2018? - HELD THAT:- In the case on hand, the Adjudicating Authority in the admission order itself appointed the IRP, that was made on March 9, 2017 - The hon'ble Supreme Court of India in [2018 (8) TMI 661 - SUPREME COURT ] clearly said that the recommencement of the resolution process is from the stage of appointment of IRP by the order dated August 9, 2017. Therefore, a conjoint reading of section 5, sub-section (12) and section 16 and the order of hon'ble Supreme Court clearly goes to show that the insolvency commencement date in this case, is August 9, 2017.
This Authority is of the considered view that reviving the period prescribed under the statute by another 180 days commencing from August 9, 2018 cannot be equated with insolvency commencement date.
The IRP is not at all prevented from taking claims. But the claim amounts should be calculated taking August 9, 2017 it being the insolvency commencement date as the cut-off date. Once the insolvency process commences from August 9, 2017 the claim amounts have to be verified as on August 9, 2017. Although the claims were received after August 9, 2017 or after August 9, 2018.
This Authority is of the considered view that the insolvency commencement date, i.e., the cut-off date for calculating the quantum of claim amounts for all types and classes of creditors is August 9, 2017.
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2018 (12) TMI 1817 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and debt and dispute or not - HELD THAT:- The Corporate Debtor has taken time for reconciliation and signing the reconciliation statement but not having completed it the demand notice was issued by the Operational Creditor under section 8(1), which was not denied by the Corporate debtor.
In VALLIAMMA CHAMPAKA PILLAI VERSUS. SIVATHANU PILLAI AND ORS. [1979 (8) TMI 210 - SUPREME COURT], the Hon’ble Supreme Court held that under section 18 of Limitation Act, one of the essential requirements for a valid ‘acknowledgement’ under Section 18, is that the writing concerned must contain an admission of a subsisting liability. A mere admission of past liability is not sufficient to constitute such an ‘acknowledgement’.
In the present case, the ‘Fernas Construction India Pvt. Ltd.’ (Corporate Debtor) in its job completion certificate has shown the actual value of work executed by the Operational Creditor. In reply to the demand the Corporate debtor intimated the Operational creditor that all the bills along with supporting documents are in process. It has not disputed the claim - Corporate Debtor also requested the Operational creditor to depute personnel for reconcile purpose and to sign jointly reconcile statement.
Till date the ‘Fernas Construction India Pvt. Ltd.’ (Corporate debtor) has not completed reconciliation of all the bills and not signed reconcile statement and kept matter pending. The matter having kept open by the Corporate Debtor, there is a continuous cause of action in absence of completion of reconcile statement jointly signed by the parties. Substantial liability having been already accepted by the Corporate Debtor in writing and intention of continuing with relationship in the record, it is held that the Corporate Debtor has treated and acknowledged the liability consciously and admitted liability to pay on reconciliation.
The claim of the Operational Creditor is not barred by limitation, there being continuous cause of action and the Corporate Debtor cannot take plea that there is no debt payable to Operational Creditor in law - Appeal dismissed.
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2018 (12) TMI 1815 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of dues - amount due and outstanding or not - HELD THAT:- In the present case the consortium banks had sanctioned and disbursed the loan amount recoverable with applicable interest by entering into loan agreements with the corporate debtor. The corporate debtor had borrowed the credit facility against payment of interest as agreed between the parties. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing. Moreover the debt claimed in the present application includes both the component of outstanding principal and interest. In that view of the matter not only the present claim comes within the purview of 'Financial Debt' but also the applicant can clearly be termed as 'Financial Creditor' so as to prefer the present application under Section 7 of the Code.
An application of financial creditor under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence of existence of default. It is reiterated that the material on record clearly goes to show that respondent had availed the loan facilities and has committed default in repayment of the huge outstanding loan amount - the present application is complete in all respect and the applicant financial creditors are entitled to claim their outstanding financial debts from the corporate debtor and that there has been default in payment of the financial debt.
In terms of Section 7 (5) (a) of the Code, the present application is admitted - Application admitted - moratorium declared.
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