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Insolvency and Bankruptcy - Case Laws
Showing 81 to 100 of 149 Records
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2021 (1) TMI 759 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor under section 9 of I&B Code - whether the pre-existence of dispute shall be seen from the date of the first demand notice dated 2nd December 2017 or the second demand notice dated 23rd August, 2018? - HELD THAT:- From the decision of MOBILOX INNOVATIONS PRIVATE LIMITED VERSUS KIRUSA SOFTWARE PRIVATE LIMITED [2017 (9) TMI 1270 - SUPREME COURT] it is clear that the existence of the dispute must be pre-existing i.e., it must exist before the receipt of the demand notice or invoice. Section 9 of the IBC makes it very clear for the Adjudicating Authority to admit the application “if no notice of dispute is received by the Operational Creditor and there is no record of the dispute in the information utility.” In the absence of any existence of a dispute between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid ‘Operational Debt’. Consequently, the application cannot be rejected under section 9 and is required to be admitted.
It is apparent from the records that the Corporate Debtor had not raised any objection pertaining to the work performed by the Operational Creditor prior to the first demand notice dated 2nd December, 2017. It was on 13th December, 2017 when the Corporate Debtor responded for the first time in its reply to the notice issued by the Operational Creditor under Section 8(1) of I&B Code - It is noted that a large number of email communications has been made by the Operational Creditor and not even a single response was made by the Corporate Debtor raising such disputes.
It is apparent from the records placed before this tribunal that Corporate Debtor have sent a legal notice on 13th March, 2018 setting out several preexisting disputes as to quality of work and delay in completion of work and also raised a counter claim against the Operational Creditor. The Corporate Debtor also sent a notice invoking arbitration on 10th April, 2018. These issues were raised after the issuance of the first demand notice. Thus there were no disputes existing prior to the issuance of first demand notice - The arbitration notice was sent after the issuance of the first demand notice but prior to the issuance of second demand notice when the Operational Creditor was busy in removing the defects in its first petition. This exhibits that the intention of the Appellant behind this was to misuse the provisions under the Code and to intentionally delaying the process of law. There were no objections raised in relation to quality of work prior to the issuance of first demand notice and the work done by the Operational Creditor was in fact certified by the architect appointed by the Corporate Debtor. Moreover, the Municipal Corporation in September, 2016 issued Occupation Certificate to the Appellant. If there were any discrepancies, the appellant could not have obtained Occupation Certificate from municipality. This also shows that all the defects pointed out by the architect have been timely rectified within the appropriate time, so that the Municipal Corporation found it appropriate to issue the Occupation Certificate.
There was no dispute existing prior to the first demand notice and only disputes raised prior to the first demand notice are relevant to determine its pre-existence and disputes raised thereafter are totally irrelevant for the same - Also the arbitration was invoked after the first demand notice. Thus the Adjudicating Authority have rightly concluded that there was no dispute existing prior to the demand notice issued under section 8 of I&B Code.
Thus, there is no reason for interference with the impugned order passed by the Adjudicating Authority - appeal dismissed.
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2021 (1) TMI 758 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH BENCH
Dissolution of the Corporate Debtor - section 54 of the IBC, 2016 and under Regulation 38(1) of IBBI (Liquidation Process) Regulations, 2016 - HELD THAT:- The liquidator filed compliance affidavit confirming that after depositing the entire available amount in the liquidation account, the net balance of ₹ 35,987.67/- is left in the company's liquidation account towards remaining/provisional liquidation expenses of the liquidator till dissolution of the corporate debtor and after payment of the said amount, NIL balance will be available with the liquidator who undertakes to submit the details of all the expenses after dissolution to IBBI and to the Hon'ble Adjudicating Authority and close the account after depositing the balance, if any remaining with the liquidator in the liquidation bank account - Further in pursuance of Regulation 46 (5), the liquidator, has again submitted the details of undistributed amount along with the details of deposits made into the Corporate Liquidation Account in Form -I with IBBI, a copy of which is enclosed as Annexure V (Diary No. 982 dated 5-2-2020) and also as Annexure A-3 (Dy. No. 00659 dated 31-7-2020).
Thus, it is established that due process of Liquidation, as per extant provisions, was followed by the Liquidator to liquidate the assets of Company and the realized amounts were also distributed to the respective claimants. Therefore, the liquidation process was deemed to have been completed under Chapter III of Part II of Code, and thus it would be just and appropriate for the Adjudicating Authority to dissolve the Company, by directing the Liquidator to close the Liquidation Account and other accounts of the Company, on receipt of this order. No party is going to be affected by dissolving the company.
M/s. Tirupati Ceremics Limted, the Corporate Debtor, is hereby dissolved with immediate effect - application disposed off.
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2021 (1) TMI 757 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA BENCH
Allegation of disobedience of order filed against officials/employees of the Corporate Debtor - section 19(2) read with Section 34(3) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It appears that the matter requires a detailed hearing for an overall view of the situation. Therefore, we are giving them further time for a detailed hearing, before taking any coercive steps in this matter. Hence, list the matter on 14/10/2020. In the meantime, the parties are directed to complete their pleadings by exchanging affidavit-in-reply and rejoinder without fail.
The Registry is directed to send e-mail copies of the order forthwith to all the parties inclusive of the Counsel.
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2021 (1) TMI 756 - INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
Undertaking of assignment by IP without holding a valid Authorisation for Assignment (AFA) - contraventions of sections 208(2)(a) and 208(2)(e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulations 7(2)(a), 7(2)(h) and 7A of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) read with clauses 1, 2, 11, 12 and 14 of the Code of Conduct contained in the First Schedule of the IP Regulations - HELD THAT:- It is clear from Regulation 7A of IP regulations that one of the essential conditions for undertaking any assignment by an IP is that he should have a valid AFA which is issued by the IPA with which he is enrolled. In other words, without AFA, an IP is not eligible to undertake assignments or conduct various processes thereof. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July 2019, much before 31st December, 2019. Adequate time was given to the professionals to obtain AFA from respective IPAs - The bye laws of ICSI Institute of Insolvency Professionals defines in para 4(1)(aa) the expression "authorisation for assignment" as an authorisation to undertake an assignment, issued by an insolvency professional agency to an insolvency professional, who is its professional member, in accordance with IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016. An application for grant of AFA can be made to the IPA under para 12A of said bye-laws.
The credibility of the processes under the Code depends upon the observance of the Code of conduct by the IRP/RP/Liquidator during the process. Section 208(2) of the Code provides that every IP shall take reasonable care and diligence while performing his duties and to perform his functions in such manner and subject to such conditions as may be specified. Further, the Code of Conduct specified in the First Schedule of the IP regulations enumerates a list of code of conduct for insolvency professionals including maintaining of integrity and professional competence for rendering professional service, representation of correct facts and correcting misapprehension, not to conceal material information and not to act with mala fide or with negligence.
In the present matter it is observed that, Mr. Rajagopal had provided his consent to accept the assignment in Form-2 to Indian Overseas Bank on 1-3-2019 prior to the amendment made to IP regulation for CIRP of Coastal Energy Private Limited, before 31st December, 2019. However, it is observed that the date of commencement of the CIRP is 6-1-2020 and the Regulation 7A of IP regulations clearly and unambiguously states that an insolvency professional shall not accept or undertake an assignment after 31st December, 2019 unless he holds a valid AFA. In consequence, he has contravened code of conduct under section 208(2)(a) and(e) of the Code and regulations 7(2)(a) and (h), 7A of the IP Regulations read with clauses 1, 2, 11, 12 and 14 of the Code of Conduct contained in the First Schedule of the IP Regulations - DC finds that an SCN dated 24-7-2020 was issued by IPA also and order has been passed against Mr. Rajagopal on 7-9-2020 by the Disciplinary Committee of IPA for accepting assignment as IRP after 31st December, 2019 without holding a valid AFA in the matter of Coastal Energy Private Limited, and warned him to be extremely careful, diligent, strictly act as per law and similar action should not be repeated.
In view of the fact that ICSI Institute of Insolvency Professionals has already taken disciplinary action against Mr. S Rajagopal, for accepting assignment as IRP after 31st December, 2019 without holding a valid AFA in the matter of Coastal Energy Private Limited and had issued a warning, the DC, in exercise of the powers conferred under Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016, disposes of the SCN without any direction against Mr. S Rajagopal - SCN disposed off.
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2021 (1) TMI 755 - INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
Accepting the assignment in the capacity of Insolvency Resolution Professional (IRP) without holding a valid Authorisation for Assignment (AFA) from his IPA - contraventions of sections 208(2)(a) & (e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulations 7(2)(a) & (h) and 7A of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) read with clauses 1, 2, 11, 12 and 14 of the Code of Conduct contained in the First Schedule of the IP Regulations - HELD THAT:- It is clear from Regulation 7A of IP regulations that one of the essential conditions for undertaking any assignment by an IP is that he should have a valid AFA which is issued by the IPA with which he is enrolled. In other words, without AFA, an IP is not eligible to undertake assignments or conduct various processes thereof after 31st December, 2019. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July, 2019, much before 31st December, 2019. The same was widely publicized in various programmes. Adequate time was given to the professionals to obtain AFA from respective IPAs. This information was made available on the websites of the IBBI as well as the IPAs.
The bye-laws of ICSI Institute of Insolvency Professionals defines in para 4(1)(aa) the expression "authorisation for assignment" as an authorisation to undertake an assignment, issued by an insolvency professional agency to an insolvency professional, who is its professional member, in accordance with its bye-laws regulation. An application for grant of AFA can be made to the IPA under para 12A of said bye-laws. Every professional member of the IPA with which he is enrolled should keep himself abreast with new professional developments - The credibility of the processes under the Code depends upon the observance of the Code of conduct by the IRP/RP during the process. Section 208(2) of the Code casts an obligation to abide by the code of conduct, take reasonable care and diligence while performing his duties and comply with all requirements and terms and conditions specified in the byelaws of the insolvency professional agency of which he is a member.
The Code of Conduct specified in the First Schedule of the IP regulations enumerates a list of code of conduct for insolvency professionals including maintaining of integrity and professional competence for rendering professional service, representation of correct facts and correcting misapprehension, not to conceal material information and not to act with mala fide or with negligence.
In the present matter, the DC notes that Mr. Joshi accepted the assignment of CIRPs in matter of Indian M/s Govindam Metals and Alloys Private Limited on 30th September, 2019 and M/s Rajit Rolling Mills Private Limited on 8th November, 2019, which is evident from the consent form (Form 2) submitted along with the application for initiating CIRPs. However, due to administrative issues, the CIRPs commenced after 31st December, 2019, viz., 17th January, 2020 and 25th February, 2020. It is also noted that he is more than 70 years of age, is ineligible to apply for AFA and does not intend to take further assignments under the Code - DC finds that an order has been passed against Mr. Joshi on 7th September, 2020 by the Disciplinary Committee of IPA with respect to the issue raised in this SCN, i.e., accepting assignment as an Interim Resolution Professional after 31st December, 2019. The Disciplinary Committee of IPA has issued warning to Mr. Joshi in view of the fact that the date of commencement of the CIRPs is after 31st December, 2019 but the acceptance for the assignments has been given by Mr. Joshi prior to 31st December, 2019.
In view of the fact that Mr. Arun Rajabhau Joshi being more than 70 years of age is ineligible to apply for AFA under the Code and that Disciplinary Committee of ICSI Institute of Insolvency Professionals has already taken disciplinary action against Mr Joshi with regard to the issue of undertaking assignments without holding valid AFA, the DC, in exercise of the powers conferred under Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016, disposes of the SCN without any direction against Mr. Arun Rajabhau Joshi - SCN disposed off.
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2021 (1) TMI 718 - DELHI HIGH COURT
Seeking listing of its petition, under Section 9 of the Insolvency and Bankruptcy Code, 2016, before the appropriate bench of the National Company Law Tribunal (NCLT) - case of the Petitioner is that the Registrar of the NCLT has failed to even list the Petitioner’s matter before the appropriate bench of NCLT, on the ground that the threshold of the pecuniary jurisdiction of the NCLT has now been amended by a notification dated 24th November, 2020, from ₹ 1 lakh, to ₹ 1 crore - HELD THAT:- This court is of the opinion that the question as to whether the NCLT has jurisdiction to entertain a particular case or not cannot be determined by the Registrar in the administrative capacity. The Registrar would have to place the matter before the appropriate bench of the NCLT, for the said question to be judicially determined. The appropriate bench of the NCLT would have to then, take a considered view as to whether notice is liable to be issued in the matter or not.
The question as to whether the notification dated 24th March, 2020 applies to a particular petition that has been filed prior to the said notification or not is also a question to be determined by the Bench of the NCLT and not by the Registrar of the Tribunal - it is directed that the petition under section 9 of the IBC, moved by the Petitioner before the NCLT, shall be placed by the
Petition disposed off.
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2021 (1) TMI 717 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - iitiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - Financial Debt or not - HELD THAT:- It appears that it is registered as a Non-Banking Financial Institution but is not authorised to accept public deposits. The alleged inter-corporate loan for a short period of 90 days repayable with a 15% per annum cannot be treated as a public deposit. Therefore, the objection of the Corporate Debtor in this regard is without any basis - the Corporate Debtor admits that up to 26th November 2018 he has paid only ₹ 2,69,075/ against the loan of ₹ 25 lacs, which was to be repaid with 15% interest per annum, within 90 days from the date of disbursal of loan. But the Corporate Debtor defaulted in repaying the amount. Therefore, it remains undisputed that the Corporate Debtor owes more than ₹ 1 lacs and committed default in repaying the same.
Thus, it is clear that when a default takes place, and debt becomes due and is not paid, the Insolvency Resolution Process begins. Non-payment of debt, once it becomes due and payable, is considered a default under Section 3(12) of the Code.
It is further held that the Adjudicating Authority is satisfied that default occurs, the Application must be admitted unless it is incomplete. In the instant case, the amount of ₹ 25 lacs was given as inter-corporate loan to the Corporate Debtor for 90 days which was repayable with interest @ 15% per annum. It is also clear that the Corporate Debtor has not paid the amount due and more than ₹ 1 lac. The Application is complete. Therefore, the Adjudicating Authority was justified in admitting the petition.
Appeal dismissed.
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2021 (1) TMI 716 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Replacement of Appellant which was based on 4th Committee of Creditors meeting - Section 22 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Power Department of Government of Sikkim being the major stakeholder had serious reservations about the conduct of the Appellant and disapproved of his behavior and action.
The decision was taken to remove the Resolution Professional as the Committee of Creditors was not satisfied with the conduct of Corporate Insolvency Resolution Process by him. It cannot be termed to be a case of casting any stigma on the conduct of the Appellant. If the conduct of Corporate Insolvency Resolution Process was disapproved by the Committee of Creditors and he lost their confidence, the Appellant has no vested right of foisting himself on the Committee of Creditors for his continuance. The removal having the requisite majority vote shares cannot be held to be flawed in any manner. Since there are no adverse observations against the Appellant alleging or attributing any misconduct to him, there is no occasion for expunging of any such remarks.
Appeal dismissed.
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2021 (1) TMI 715 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Condonation of delay of 1111 days in submitting proof of claim against against Corporate Debtor - recall of order on the ground that the Resolution Professional failed to check/consider Book of Accounts vis a vis Appellant while making the Resolution Plan and the Adjudicating Authority failed to appreciate the important issue - Resolution Plan approved by the Committee of Creditors - HELD THAT:- The Resolution Plan in the Corporate Insolvency Resolution Process against the Corporate Debtor has been approved by the Committee of Creditors as also by the Adjudicating Authority. That being the admitted position, Section 31 (1) of the I&B Code would come into play which provides that the Resolution Plan approved by the Committee of Creditors shall be binding on all stakeholders. After approval of the Resolution Plan by the Adjudicating Authority, the Successful Resolution Applicant could not be allowed to be faced with claims filed or admitted after the Resolution Plan was submitted by such Successful Resolution Applicant. The Successful Resolution Applicant, before submission of the Prospective Resolution Plan is entitled to know the liability of the Corporate Debtor so that he can tailor his Prospective Resolution Plan accordingly and make provision for satisfaction of the claims and making payments in terms of the approved Resolution Plan.
In the instant case it is not disputed that the claim has been filed by the Appellant not only at a highly belated stage but also after approval of the Resolution Plan. In these circumstances, the Adjudicating Authority was right in rejecting the application as being non maintainable.
Appeal dismissed.
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2021 (1) TMI 714 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
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 no dispute as regards to the sanction and disbursement of loan by the Financial Creditor to the Corporate Debtor. It is also not in dispute that such outstanding debt is due and payable, both in law and in-fact. There is a default in repayment of the same. Thus, the application under Section 7 of the Insolvency & Bankruptcy Code, 2016 is liable to be admitted, as it meets the basic ingredients thereof. The Application is complete in all respects and meets requirements of Regulations made under Insolvency & Bankruptcy Code, 2016.
The Application filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 is defect free and is admitted.
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2021 (1) TMI 713 - NATIONAL COMPANY LAW TRIBUNAL , CHANDIGARH BENCH
Seeking extension of period of 60 days beyond 270 days for the Corporate Insolvency Resolution process - 2nd Proviso to Section 12(3) of the I & B Code, 2016 - HELD THAT:- The Hon'ble National Company Law Appellate Tribunal in IN RE : SUO MOTO [2020 (6) TMI 495 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] that the period of lockdown ordered by the Central Government and the State Governments including the period as may be extended either in whole or part of the country, where the registered office of the Corporate Debtor may be located, shall be excluded for the purpose of counting of the period for 'Resolution Process under Section 12 of the Insolvency and Bankruptcy Code, 2016, in all cases where 'Corporate Insolvency Resolution Process' has been initiated and pending before any Bench of the National Company Law Tribunal or in Appeal before this Appellate Tribunal.
Thereafter, the Insolvency and Bankruptcy Board of India, inserted Regulation 40C to the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, vide notification dated 29.03.2020 which states that Notwithstanding the time-lines contained in these regulations, but subject to the provisions in the Code, the period of lockdown imposed by the Central Government in the wake of COVID-19 outbreak shall not be counted for the purposes of the time-line for any activity that could not be completed due to such lockdown, in relation to a corporate insolvency resolution process - Similarly, the Insolvency and Bankruptcy Board of India, vide notification dated 20.04.2020, inserted Regulation 47 A to the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 and the said regulation states that Subject to the provisions of the Code, the period of lockdown imposed by the Central Government in the wake of Covid-19 outbreak shall not be counted for the purpose of computation of the timeline for any task that could not be completed due to such lockdown, in relation to any liquidation process.
In the circumstances and in view of the orders referred and the IBBI Regulations and also in view of the receipt of resolution plans, the instant IA is disposed of by extending the period of CIR Proceedings by 60 days beyond 270 days, after deducting the period from 25.03.2020 to 31.07.2020 - Application allowed.
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2021 (1) TMI 658 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Forfeiture of part of the earnest money deposited by the Appellant - Sale of assets by the Liquidator of the company in liquidation - It is the case of the Appellant that in compliance of Clause 13 of this Corrigendum, the Appellant was ready to deposit the amount with 12% interest but the Respondent was not willing to consider their request - HELD THAT:- In the present case, the material on record evidences that reminder e-mails dated 01.04.2020, 02.04.2020, 23.04.2020, 15.05.2020 and 18.05.2020 were issued by the Liquidator to the Appellant herein requesting for payment of the balance amount of the 25% of the consideration but the Appellant neither replied to the e-mails nor made any payment adhering to the terms and conditions. It can be safely construed that the Appellant, by his own conduct, precluded the coming into existence of the concluded ‘Sale’ and cannot now be given an advantage or benefit of his own wrong doing by not allowing forfeiture.
The contention of the Learned Counsel for the Appellant that Clause 13 of the Corrigendum is applicable to this case and that the same has not been considered by the Ld. Adjudicating Authority, is unsustainable on the ground that Clause 13 of the Corrigendum is with respect to payments regarding the balance 75% of the sale consideration. The timelines with respect to the initial payment of the 25% is clearly given as 25.03.2020 and the payment of balance consideration by the successful bidder was given as 24.04.2020.
Thus, it cannot be construed that Clause 13 is applicable to the initial 25% payment of the EMD amount. Be that as it may, the documentary evidence, the e-mails dated 02.04.2020, 03.04.2020, 15.05.2020 and 18.05.2020 clearly establish that sufficient opportunity was given to the Appellant to make the balance payments, which the Appellant had failed to respond or comply with the requests made and therefore Clause 3 of the “Forfeiture of Earnest Money Deposit” from the E-Auction terms and conditions, squarely applies to the facts of this case.
Appeal dismissed.
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2021 (1) TMI 655 - NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues to Operational Creditor - existence of dent and dispute or not between the parties or the record of the pendency of a suit or arbitration proceeding filed before the receipt of the demand notice of the unpaid operational debt in relation to such dispute - HELD THAT:- The petitioner/ Operational Creditor though claimed to have entered into Purchase Order dated 25.02.2016 (ANNEXURE 'A') with the respondent/ Corporate Debtor, the petitioner/ Operational Creditor could not produce any documentary evidence to the effect that it had provided AMC services as agreed upon, or any evidence to show that the Corporate Debtor has acknowledged debt or any acknowledgement that the Corporate Debtor has received invoices issued by the Operational Creditor or that the Corporate Debtor has confirmed any debt, in part or full - It is further observed that the petitioner/ Operational Creditor had claimed to have issued Demand Notice dated 11.09.2017 (ANNEXURE 'E'). However, there is no proof of service/ acknowledgement of the said Demand Notice. so is the case with Demand Notice dated 17.08.2019 (ANNEXURE 'F'). Besides, affidavit under section 9(3)(b) of the I&B Code, 2016, is not filed by the petitioner/ Operational Creditor.
We are not able to trace any shred of acknowledgement/ confirmation from the Corporate Debtor that the Operational Creditor had provided AMC services either in part or full or that the Corporate Debtor had acknowledged/ confirmed that the Corporate Debtor owed any dues to the Operational Creditor towards such services or that the Corporate Debtor had paid any part of amount towards any services provided by the Operational Creditor. Nowhere we find any acknowledgement of the Corporate Debtor, except Purchase Order dated 25.02.2016 (ANNEXURE 'A', page 17). Mere signing of Purchase Order, ipso facto, does not lead to its execution - In absence of such acknowledgement/ confirmation by the Corporate Debtor, operational debt is not proved. Further there is no documentary evidence to show that debt has become due and payable by the Corporate Debtor.
It can be concluded that (i) no ingredients of any debt having become 'due and payable' are available in the present case, (ii) there is no acknowledgement/ confirmation by the Corporate Debtor that the Corporate Debtor had received any services, in part or full, pursuant to Purchase Order dated 25.02.2016 (ANNEXURE 'A'), and (iii) no evidence that the Corporate Debtor had ever paid any amount towards any services provided by the Operational Creditor.
The proceedings initiated by the Operational Creditor is solely based on Purchase Agreement dated 25.02.2016 (ANNEXURE 'A') sans any evidence to show that such an agreement has ever been executed and sans evidence that any debt has become due and payable by the respondent/ Corporate Debtor - petition dismissed.
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2021 (1) TMI 652 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Extension of CIRP period - exclusion of period of lockdown from CIRP - HELD THAT:- The Hon'ble Apex Court in IN RE : COGNIZANCE FOR EXTENSION OF LIMITATION [2020 (5) TMI 418 - SC ORDER] extended the limitation due to the Covid-19 Pandemic with effect from 15th March, 2020. In the instant case however, the CIRP period got over on 16th January, 2020. No reason whatsoever is assigned by the Applicant as to why either the EOI or the Resolution Plan was not submitted by that date. The reason that due to the intervening Pandemic it could not submit any EOI or Resolution Plan is not tenable in view of the fact that the lockdown commenced more than 2 (two) months after the period of CIRP had expired. It is settled law that the timeline provided under Section 12 for completion of the CIRP needs to be adhered to unless extended by the Adjudicating Authority - In this case there has been no such extension beyond 16th January, 2020. In the absence of any reason whatsoever, much less satisfactory, this Authority is not inclined to accord any indulgence to the Applicant for condoning the unexplained delay in submitting the Resolution Plan. It is settled law that a person/party who sleeps over his/its rights does not deserve any equitable relief. Delay, as is settled, defeats equity.
The Application does not merit any consideration and is liable to be rejected - Application dismissed.
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2021 (1) TMI 618 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Non-appointment of persons selected by the COC (Committee of Creditors) as Resolution Professional and Authorized Representative - Section 22 of IBC - HELD THAT:- Under Sub-Section (5) of Section 22 if the Board does not confirm the name of the proposed Resolution Professional within 10 days of the receipt of the name of the proposed Resolution Professional, then the Adjudicating Authority shall direct the IRP to continue to function as Resolution Professional until such time as the Board confirms the appointment of the Resolution Professional - Section 21(6-A) has provision with regard to Authorized Representative. This Section is required to be read with Regulation 16A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. Regulation 16A of these Regulations records procedure with regard to selection of Resolution Professional to act as Authorized Representative.
When Section 21(6-A) is read with these Regulations, and Resolutions passed by COC are kept in view, it is apparent that the Adjudicating Authority was required to treat Mr. Hari T. Devadiga as Authorized Representative whose name was even recognised by the Respondent No.1 when he filed CA No.669 of 2019. We find Adjudicating Authority had no power to impose Resolution Professional of its choice. Even for Authorised Representative decision of the majority is to be respected.
The Impugned Order to the extent it appointed Respondent No.1 as Resolution Professional and Respondent No.2 as Authorised Representative - Matter remitted to the Adjudicating Authority directing that Mr. Hari T. Devadiga will be treated as the Authorized Representative of class of Financial Creditors (home or shop buyers) of Dreamz Infra India Ltd. under Section 21(6-A)(b) of IBC. Charge, if any, required to be handed over by Respondent No.2 shall be handed over to Mr. Hari T. Devadiga. The Adjudicating Authority shall in compliance of Section 22(4) forward the name of Mr. Konduru Prasanth Raju to the IBBI and follow the procedure as laid down in Section 22(4) and (5) of IBC.
Appeal allowed by way of remand.
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2021 (1) TMI 617 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Seeking direction to Committee of Creditors (CoC) and Resolution Professional (RP) to consider the Resolution Plan submitted by one M/s. Alkon Projects - HELD THAT:- If we pass order of liquidation of the Corporate Debtor, it may prejudicially affect the rights of such Horne-buyers. Some of them may render to be home-less despite paying some amount to the Corporate Debtor. Hence, we have taken for consideration these two applications, so that we can set right the CIRP of the Corporate Debtor. Moreover, the application for liquidation of the Corporate Debtor filed by RP has not been supported [confirmed final account and even 'by the resolution of the CoC.
In this case, we are faced with the difficulty that CIRP period of 330 days has been over on 05.03.2020. Accordingly, RP has filed application for liquidation of the Corporate Debtor, but due to the declaration of 'Lock Down,' that application remained pending. In our considered view, since, the RP and CoC have received the resolution plans of one M/s. Alkon Projects, it would be appropriate if we direct the RP and CoC to consider the resolution plans first - in view of facts that the grievances of Some of the Home-Buyers/Plot-Holders can be addressed to. It is seen from the record that a period of 172 days was wasted due to pendency of application of RP for appointing an authorized representative of the Financial Creditors. It is seen from the record that RP could not hold CoC meeting during that period for want of corum and hence, that period has to be excluded from the CIRP period. Thereafter, when the matter was listed before this Adjudicating Authority, for the first time on 17.06.2020, the 'Lock-Down' was declared. Therefore, we stayed the proceedings.
RP and CoC are directed to consider the Resolution Plan - application disposed off - The main matter to appear on 12.02.2021.
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2021 (1) TMI 615 - NATIONAL COMPANY LAW TRIBUNAL KOCHI BENCH
Maintainability of application - initiation of CIRP - default on the part of Corporate Debtor in repayment of an amount together with the agreed rate of interest, to Financial Creditor - existence of Operational Debt or not - presence of document evidence to show that the aforesaid debt is payable and has not yet been paid - existence of a dispute between the parties or not - HELD THAT:- It is noticed that the foremost objection of the applicant/Corporate Debtor regarding ‘maintainability’ of the IB application is based on the arbitration clause mentioned in Memorandum of Understanding dated 27.12.2010, Joint Development Agreement dated 09.02.2012 and Agreement dated 28.06.2013, which was already been dismissed on 17.02.2020 under separate Interlocutory Application (IA/09/KOB/2020 in IBA/46/KOB/2019), to which an appeal was filed before the Hon’ble NCLAT (Company Appeal (AT) (Insolvency) No. 429 of 2020) and the same was also dismissed as being premature stating that it is open to the learned Adjudicating Authority to decide the application on merits and in the event of the Appellant being aggrieved of the order of admission passed under Section 7, it shall be open to the Appellant to raise all issues in appeal.
As regards the allegation that no demand notice has been issued by the Applicant as mandated under Section 8 of the Code, it does not hold ground for the reason that the Application has been filed by the Financial Creditor for recovery of money borrowed as ‘Inter Corporate Deposit’ by the Corporate Debtor against payment of interest. In terms of clause (a) Sub-Section (8) of Section 5 of the I & B Code, the same tantamount to a debt disbursed against consideration of time value of money, which falls within the ambit of ‘Financial Debt’.
This Bench is of the view that the provisions of Limitation Act do apply while implementing the provisions of Insolvency Code. Since it is clear that there is an acknowledgement in the records of the Financial Creditor, the Limitation Act are to be examined in the light of the facts and circumstances of this particular case. In the present case, the true extract of statement of accounts maintained by the Financial Creditor clearly depicts that the period of non-payment is from April 2017 and the last date of payment received by the Financial Creditor as 24.11.2017.
Indisputably, in the present case, the Financial Creditor itself came out with a pleading with the documents stating the date of default of outstanding principal and interest is from 01st April 2017 till 31st March 2019, as stated in Part IV of the application. Hence, this Bench is of the view that the application filed by the Financial Creditor (TATA Global Beverages Limited) is well within the limitation period and the contention of the applicant that the debt is time barred is to be rejected.
Application disposed off.
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2021 (1) TMI 611 - NATIONAL COMPANY LAW TRIBUNAL MUMBAI BENCH
Classification of Debt - Financial Debt of Operational Debt - payment of advanced money for receivable of gold stock and jewellery in future was arrangement between the Applicant and Corporate Debtor - Novation of contract between parties - Preferential Transactions or not - HELD THAT:- In terms of Section 43 (2) (a) the Corporate Debtor by virtue of executing a loan agreement dated 15.04.2019 has converted operational debt into a financial debt, with an intention to prefer the creditor and to put him in a beneficial position that he could have been in the event of distribution of asset in according with section 53 of IBC - this sort of arrangement could not have been done in its ordinary course of business, an Operational Creditor who advanced money with an intention of buying gold was treated as a lender under the Loan Agreement dated 15.04.2019.
Looking at the facts of the present case that the CIRP against the Corporate Debtor commenced on 13.11.2019, the Loan Agreement dated 15.04.2019 executed by the Corporate Debtor, substituting the earlier MOU dated 07.03.2017 between the same parties, was created, seven months prior to CIRP, it is concluded that this arrangement is a preferential transaction in terms of Sec 43 (2)(a) of Code and is well within the two years look back period as prescribed by the code. Therefore, this bench declares that Resolution Professional has rightly rejected the claim of Financial Creditor, but has not filed any application under sec.43 for avoidance of transaction, this bench has Suo Moto considered the facts and gravity of the transaction to the extent of conversion of Operational Debt to financial debt for the benefit of the operational creditor and thus treated the transaction dated 15.04.2019 to be a preferential transaction.
Application dismissed.
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2021 (1) TMI 610 - NATIONAL COMPANY LAW TRIBUNAL HYDERABAD BENCH
Approval of Resolution Plan - Section 31(1) of the Code - seeking appointment of RP to monitor the implementation of the scheme - HELD THAT:- Section 30(6) of the Code enjoins the resolution professional to submit the resolution plan as approved by the committee of creditors to the Adjudicating Authority. Section 31 of the Code deals with the approval of the resolution plan by the Adjudicating Authority, if it is satisfied that the resolution plan as approved by the committee of creditors under section 30(4) meets the requirements as referred to in section 30(2) - Thus, before approving the Resolution plan, it is the duty of the Adjudicating Authority that it should satisfy itself that the Resolution plan as approved by the CoC meets the requirements as referred to in sub-section (2) of Section 30.
In terms of Regulation 27 of CIRP Regulations, Fair value and Liquidation value was ascertained through two registered valuers, and the same stands at ₹ 109.18 Crores and ₹ 96.92 Crores respectively. The total Resolution Plan value of ₹ 98.15 Crores is higher than the liquidation value - RP has complied with the code in terms of Section 30(2)(a) to 30 (2) (f) and Regulations 38(1), 38(1)(a), 38(2)(a), 38(2)(b), 38(2)(c) & 38(3) of CIRP regulations.
The 'Resolution Plan' filed with the Application meets the requirements of Section 30(2) of the code, 2016 and Regulations 37, 38, 38(1A) and 39 (4) of IBBI (CIRP) Regulations, 2016. The 'Resolution Plan' is also not in contravention of any of the provisions of Section 29A. Hence, this Adjudicating Authority is satisfied that the Resolution Plan is in accordance with Law - While approving the 'Resolution Plan', it is clarified that the Resolution Applicant shall pursuant to the Resolution Plan approved under Sub-Section (1) of Section 31 of the I&B Code, 2016, obtain all the necessary approvals as may be required under any law for the time being in force within the period as provided for in such law.
This Adjudicating Authority orders for the Constitution of Monitoring Committee consisting of Mr TSN Raja, RP, representatives nominated by the Financial Creditors and the Resolution Applicant to supervise the implementation of the Resolution Plan and further Resolution Professional is directed to file status of implementation of Resolution Plan before this Adjudicating Authority from time to time - approved 'Resolution Plan' shall become effective from the date of passing of this Order.
Application allowed.
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2021 (1) TMI 609 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , NEW DELHI
Contempt petition - Oppression and Mismanagement - matter is still pending for final disposal before the learned National Company Law Tribunal (NCLT) - Sections 241 – 242 of the Companies Act, 2013 - seeking direction to Respondent No.2 to 5 to give access to the Petitioner Company/GETL immediate access to all of the Company’s data including electronics data and emails of employees of the Company which are saved on/available on the servers of Respondent No.5 and/or its group Companies - HELD THAT:- The Interim Orders passed by NCLT were substituted by the Interim Orders of this Tribunal which were passed on 27th August, 2019 by Judgement dated 17th February, 2020, [2020 (2) TMI 820 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] the Order concerned of NCLT has been substituted by the Interim Orders as were passed by this Tribunal. The matter is now squarely before the learned NCLT. If the Applicant has any grievance, the Applicant can move the learned NCLT for any relief (including seeking action of contempt), as may be admissible in law.
The present Contempt Case is disposed with liberty to the Applicant to move the learned NCLT for relief as may be admissible in law.
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