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Insolvency and Bankruptcy - Case Laws
Showing 21 to 40 of 120 Records
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2021 (7) TMI 1300 - NATIONAL COMPANY LAW TRIBUNAL ALLAHABAD BENCH
Maintainability of application - initiation of CIRP - Threshold limit for initiation of CIRP - HELD THAT:- Admittedly, the amount due to be paid by the Corporate Debtor to the Operational is 13,46,278/- which is less than the threshold amount specified for triggering of the proceedings for Insolvency as per the Notification vide S.O 1205(E) dated 24.03.2020, by which, the threshold amount for initiation of Insolvency has increased from 1 lakh to 1 crore.
The present petition is dismissed as non maintainable.
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2021 (7) TMI 1292 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Acting as per Resolution plan or not - Resolution Plan provided that NCDs would be issued - whether instead of paying cash, NCDs could be issued? - HELD THAT:- Considering the exceptional facts of present matter the Impugned Order is stayed till the next date and status quo ante as before passing of the Impugned Order is directed to be maintained. Resolution Professional will continue to manage the Corporate Debtors as per provisions of IBC till the next date.
Respondents in both these Appeals to file Reply-Affidavits within two weeks. Rejoinder, if any, may be filed within a week, thereafter. Parties to file brief 'Written-Submissions' not more than three pages and 'Copies of Judgments' which they want to refer or rely on, within three weeks - List both these Appeals 'For Admission (After Notice)' hearing on 07th September, 2021.
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2021 (7) TMI 1283 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI
Exclusion of time period lapsed due to non-availability of records, assets, books of accounts and Covid-19 from the ongoing CIRP - section 19(2) of the I&B code, 2016 - HELD THAT:- The Applicant states that by way of present Application it seeks an exclusion of the intervening period from the commencement of CIRP i.e., from 05.11.2019 till the disposal of application filed under section 19(2) of I & B Code, 2016 filed on 07.12.2019.
This bench, after taking into consideration the facts and circumstances of the present case and following the law as laid down by the Hon'ble Apex court in COMMITTEE OF CREDITORS OF ESSAR STEEL INDIA LIMITED THROUGH AUTHORISED SIGNATORY VERSUS SATISH KUMAR GUPTA & OTHERS [2019 (11) TMI 731 - SUPREME COURT], grants a period of 90 days so as to complete a total of 270 days, w.e.f 03.05.2020 i.e., date of completion of 180 days, to the Applicant for completing the CIRP of the corporate debtor in a time bound manner as per the provisions of the I & B Code, 2016.
Application disposed off.
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2021 (7) TMI 1263 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Appellant seeks clearance of lease rent and maintenance bill for the year 2019-2020, alongwith Interest - seeking clearance of water bill dated 07.02.2020 as well - Resolution Plan approved by Adjudicating Authority - HELD THAT:- In this case, there is apparent mistake that the lease rent and the electricity and water bill all are essential supply and should form part of Insolvency Resolution Process cost vide Chapter –IX IBBI (Insolvency Resolution Process for Corporate Persons) Regulation 2016, Regulation 31& 32 and R/w Section 5(13) (e) and 14(2) of the Code - The Adjudicating Authority has approved the ‘Resolution Plan’ which is at Annexure-E page - 70 of the Appeal paper book vide Clause 6.2 has clearly stated that in case the actual CIRP is higher than the estimated CIRP cost the Resolution Applicant will pay the higher amount.
The Resolution Applicant is liable to pay the principal amount due for the specified period of the bill i.e for the CIRP Period, without considering the interest components as part of Insolvency Resolution Process Cost which he is liable to pay - It is settled law that the Insolvency and Bankruptcy Code, 2016 is a complete Code. Hence, all concerned are required to comply with the express provisions of the Code without any deviation.
Appeal allowed in part.
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2021 (7) TMI 1234 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Lease agreement - lease entered into in accordance with law for renewing the existing lease hold rights, subsequent to notice under SARFAESI - It was contended by the Applicant that the execution and registration of the Lease Deed dated for a period of 20 years, being subsequent to issuance of the SARFAESI Notice was unlawful as being violative of Section 13(13) and the spirit of SARFAESI Act, 2002 - right of the mortgagor to put the property on lease conditional upon Section 65A(2) of Transfer of Property Act, 1882 - Clarification sought of the judgement in the case of Delhi Administration V/s Gurdip Singh Uban and Others [2000 (8) TMI 1106 - SUPREME COURT] - HELD THAT:- There are no provisions in the IBC which permits us to review the judgment passed by this Tribunal.
The provisions of Rule 31 of NCLAT Rules, 2016 is also not applicable in the facts of the instant Application because the judgment has already been delivered and the matter has been disposed off.
The clarification Application which has been filed is just not for clarification/modification/recall of the Judgment passed by us but for review of the Judgment resulting reopening/rehearing the issue and such practice may not be done for want of provisions to review in IBC - the averments made in the clarification application do not have any merit - application dismissed.
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2021 (7) TMI 1220 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD 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 - reply to the demand notice made or not - HELD THAT:- This Adjudicating Authority is satisfied that the Operational Creditor has proved its case by placing evidence that default has occurred for which the Corporate Debtor was liable to pay.
Reply to demand notice - HELD THAT:- It is seen that no reply to the demand notice served u/s. 8 of the Code was ever made by the Respondent to indicate either existence of dispute or proof of payment of the impugned debt. In fact, during the initial phase of the instant proceedings upto 13.02.2020, the Respondents sought time for settling the matter and for filing Joint Memo of Settlement, but there was no representation thereafter.
The Operational Creditor has fulfilled all the stipulations as required under the provisions of the IB Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process. In these circumstances, having satisfied with the submissions made by the Petitioner/Operational Creditor, this Adjudicating Authority is inclined to admit the instant Application.
The instant application is hereby admitted - Moratorium declared.
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2021 (7) TMI 1179 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Liquidation of the Corporate Debtor - appointment of Liquidator - cessation of the moratorium declared under Section 14 of IBC - HELD THAT:- The Applicant has filed Form - H from which it is evident that the Fair value and Liquidation value in respect of the assets of the Corporate Debtor is arrived at ₹ 6.35 Crore and ₹ 5.50 Crore. Since the CoC in its 8th meeting held on 31.03.2021 after discussing and deliberating about the current affairs of the Corporate Debtor by taking into consideration that there was no Eol being received from any prospective Resolution Applicant, even after the same was issued twice and also keeping in view of the fact that the Corporate Debtor is not running its business and based on its commercial wisdom has decided to liquidate the Corporate Debtor.
The liquidation of corporate Debtor is ordered - the liquidator is appointed - application allowed.
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2021 (7) TMI 1178 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Dissolution of the Company - voluntary liquidation - Section 59(7) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- On examining the submissions made by the Learned Liquidator and after perusing the documents annexed to the Application it appears that the affairs of the Company have been completely wound up and the assets of the Applicant Company have been completely liquidated and as such the Applicant Company deserves to be dissolved. Accordingly, in exercise of the powers conferred under Section 59(8) of IBC, 2016, the dissolution of M/s. Angalaparameswari Finance Private Limited is ordered and the Applicant Company shall stand dissolved from the date of this order.
Application allowed.
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2021 (7) TMI 1175 - NATIONAL COMPANY LAW TRIBUNAL , JAIPUR BENCH
Acceptance or rejection of Resolution plan by CoC - Interference allowed with the commercial wisdom of CoC or not - Seeking to set-aside the decision of the Committee of Creditors (COC) of the corporate debtor in approving the resolution plan of the third respondent - HELD THAT:- A bare perusal of the decision in K. Sashidhar [2019 (2) TMI 1043 - SUPREME COURT], made it clear that while rejecting or approving a resolution plan, the commercial wisdom of the COC cannot be interfered or modified by the Adjudicating Authority, as long as the resolution plan approved by the COC satisfies the requirements under Section 30(2) of the Code. The Hon'ble Apex Court in K. Sashidhar and in various subsequent decisions and also the Hon'ble NCLAT have categorically held that the COC while exercising its commercial wisdom can reject the resolution plan of an H1 bidder and can accept the resolution plan of other bidders, keeping in view the various aspects such as feasibility, viability, credit worthiness of the concerned applicant and the source of funds thereto, etc.
There are no irregularity, in the decision of the COC in rejecting the resolution plan of the applicant and approving the resolution plan of the third respondent. It is further to be seen that the applicant was very much invited to all the COC meetings upto 18th COC whereunder his plan was discussed, deliberated and the applicant was asked to improve the same.
There are no merits in the application - application dismissed.
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2021 (7) TMI 1173 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Rejection of the claim in relation to the Operational Creditor - non admission of the claim in relation to the Financial Creditor - Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is seen from the records that these operational creditors were supplying dairy products and sea foods and other food products to the Corporate Debtor for a long time and as such they are Operational Creditors in relation to the Corporate Debtor. However, it is seen from the written submissions made by the Resolution Professional that after the initiation of the CIRP, the RP has taken steps to keep the Corporate Debtor as a going concern and many of the Trade Creditors who are the Applicants herein have supplied materials during the CIRP period and have also received payments for supply of such materials during the CIRP period. Further, it should be noted that the timelines as envisaged under the Code mandates CIRP to be completed within a period of 330 days and also timelines have been fixed for submissions of the claim by the creditors. Also it must be noted that the RP cannot perpetually accept the claims from the Creditors till the end of the CIRP period as it would defeat the very purpose of the Code.
The claim of the Applicants in their capacity as a Trade Creditors/Operational Creditor in respect of the Corporate Debtor cannot be condoned at this belated stage especially when the Resolution Plan is approved by the CoC and is pending before this Tribunal - Application dismissed.
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2021 (7) TMI 1172 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Dissolution of Corporate Debtor - 54(1)(a) and Regulation 14 of IBBI (Liquidation Process Regulations 2016 or any other provisions of Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is a fact on record that there are no realizable assets held by the Corporate Debtor so as to form a Liquidation Estate and to distribute the proceeds thereof. Accordingly, this Adjudicating Authority in exercise of the powers conferred under Section 54(2) of the I & B Code, 2016, deems it proper to pass an order of the dissolution of the Corporate Debtor. Thus Corporate Debtor herein i.e., M/s. Sristek Clinical Research Solutions Limited stands dissolved from the date of this order. Liquidator also stands relieved.
In the instant case, however, neither any compromise or arrangement could be arrived at u/s. 230 of the Companies Act, nor any amount was realized or distributed by the Liquidator. Moreover, the only Claimant is the original applicant/Operational Creditor - The original applicant/Operational Creditor shall reimburse the liquidation cost of ₹ 1,09,450/- to the Liquidator - A lump sum fee of ₹ 1,00,000/- will be paid by the original applicant/Operational Creditor to the Liquidator for performing his duties.
Application disposed off.
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2021 (7) TMI 1130 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Validity of approved Resolution Plan - submission of Resolution Plan beyond the date prescribed in Form-G - decision of CoC to approve the plan - no objection shown before RP and CoC to dispute the claims placed - Whether there has been material irregularity in exercise of powers by the Resolution Professional during the Corporate Insolvency Resolution Period? - HELD THAT:- The RP has published the list of creditors on 24.08.2018, 29.11.2018, 10.12.2018 and finally on 24.01.2019 and in these lists the claims of the Appellant were shown as disputed claims. These lists were displayed on website, however, the Appellant has not raised any objection before the RP and CoC that the estimate of the amount of claims has not been shown in the lists - In this Application in Paras 16, 17, 21 to 30 there are specific allegations that the Appellant’s claims fall within the scope of fraudulent trading and wrongful trading transactions under Section 66 of the IBC. However, the Appellant has not contested these applications before the Adjudicating Authority.
The Appellant in rejoinder did not dispute the aforesaid facts, however, stated that the Application has no relevance to the determination of the issues involved in the present Appeal. The Appellant has not challenged the findings of the A & M report dated 15.01.2019 and SEBI interim order dated 16.08.2018 - the Appellant has failed to convince that the RP has committed any material irregularity in exercise of powers during the CIRP.
Whether the debts owed to the Operational Creditor (Appellant) of the Corporate Debtor have not been provided for in the Resolution Plan in the manner specified by the Board? - HELD THAT:- Appellant heavily placed reliance on the Judgment of Hon’ble Supreme Court in the case of NTPC Ltd (Simhadri Project) [2020 (11) TMI 973 - SUPREME COURT] - According to the Appellant, the claims of the Appellant was pending adjudication before the Arbitrator, therefore, according to the Appellant, the claim amount should have been reflected under the heading ‘Claims of Operational Creditors’. The Hon’ble Supreme Court do not agree with this submission and held that the Appellant’s claims has rightly been described in the memorandum as other creditors’ claims (Claims under Adjudication). The Appellant has raised this objection before the approval of Resolution Plan.
In the present Appeal, the facts are quite different the Appellant’s claims are not only disputed claims but are the fraudulent extortionate credit transactions. Thus, this Judgment is not helpful to the Appellant.
The Appellant has failed to make out a case for interference in the impugned order - Appeal dismissed.
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2021 (7) TMI 1128 - 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 - service of demand notice - HELD THAT:- The date of default is 22.01.2018 and the present application is filed on 24.01.2019. Hence the application is not time barred and filed within the period of limitation - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is filed on the Performa prescribed under Rule 6 of the Insolvency and Bankruptcy Code, 2016 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 r/w Section 9 of the code and is complete.
There is a pre-existing dispute among the parties and the same is validated as per emails dated 23.04.2018, wherein the corporate debtor had raised dispute with regards the incomplete and delayed service, further as per email dated 07.06.2018, wherein the corporate debtor had also requested the applicant to complete the work at site - corporate debtor had also raised dispute in its reply to the demand notice of the applicant.
Thus, a conclusion can be drawn that there is ‘Preexistence dispute’ which was raised by the corporate debtor time and again much prior to the notice served under section 8 of I & B Code. It is a fit case to reject the application under section 9 of the I & B Code - the application is rejected.
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2021 (7) TMI 1125 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Homebuyers/flatowners - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The petitioner is representing the members of 300 flat owners, out of total 644 flats and as per the requirement of Section 7 of IBC, 2016 proviso, an application needs to be filed jointly by not less than one hundred of such creditors in the same class or not less than ten per cent of the total number of such creditors in the same class whichever is less. Since, the petitioner is representing 300 flat buyers, the petitioner is a registered Association duly elected by the 300 flat buyers and there is a resolution of the Association, which authorizes the petitioner to pursue the matter, the petitioner has fulfilled the minimum requirement for filing an application under the amended Section 7 of IBC, 2016.
On plain reading of the definitions, it is found that the 'debt' means a liability or obligation in respect of a claim, which is due from any person and includes a financial debt and operational debt. And the 'financial debt is a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes the amount paid under either of the clauses from (a) to (i) of Section 5 of the IBC, and the person who paid the money and to whom such debt has been legally assigned or transferred to is known as 'Financial Creditor'.
It is an admitted fact that as per the clause (D) of the agreement at page 176 of the paper book, on the balance of 75% of the deposit, the developer shall pay annually interest at the rate of State Bank of India's rate for three years' term deposit and interest shall be paid from the date of providing maintenance services i.e., 01.05.2007 or from the date deposits are made by owner(s), whichever is later - In view of this clause of the agreement, when we consider the definition of 'financial debt', it is seen that money was borrowed against the payment of interest and that amount was raised from the allottees under a real estate project - the amount raised by the corporate debtor comes under the definition of financial debt' and the petitioner, who is representing the 300 flat buyers of that project, is the 'financial creditor' in terms of Section 5 (7) of IBC 2016.
It is admitted by the Corporate Debtor in its reply that the maintenance is being carried out by the petitioner Association, w.e.f. 01.04.2018. Therefore, as per the agreement clause, the Corporate Debtor was bound to refund the amount, the day when the Association was formed. Since it is admitted by the Corporate Debtor that the Association has been carrying out the maintenance work w.e.f. 01.04.2018, therefore, the date of default is 01.04.2018 - It is seen in the part-TV of the application that the date of default is shown as 01.04.2018 and the total amount of default including interest is indicated of ₹ 10,80,77,619/-. The present application is filed on 26.02.2019, hence it is within the limitation period.
Thus, there is a financial debt paid by the flat buyers, who are represented through the Registered Association and that amount has not been refunded by the Corporate Debtor as yet, therefore, there is a default in making the payments of debt amount - the applicant has succeeded in establishing that there Is a financial debt and Corporate Debtor is in default in making the payment of that financial debt, the application is complete - application admitted - moratorium declared.
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2021 (7) TMI 1118 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI 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 Adjudicating Authority is of the view that the Corporate Debtor in its reply to the demand Notice dated 19.12.2019 does not dispute the fact that the salary to the Operational Creditor has to be paid however, a condition has been laid that the Operational Creditor has to first recover the outstanding dues of ₹ 10,00,000/- from the customers therefore, it is a clear admission of default and this Adjudicating Authority does not have to indulge in the details or the terms of the Contract/Appointment letter.
Pre-existence of dispute - HELD THAT:- The Corporate Debtor has rendered two different dates i.e. 10.12.2019 and 19.12.2019 for the alleged legal notice. The alleged dispute raised in the said legal notice is an afterthought and contrary to the stand taken by the Corporate Debtor. The Corporate Debtor has failed to produce any tracking report which could depict that the said Legal Notice dated 19.12.2019 was ever delivered to the Operational Creditor - thus, the defense of pre-existence of dispute can be categorized as a moonshine dispute.
The application is admitted - moratorium declared.
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2021 (7) TMI 1093 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Compromise and Arrangement - taking back the immovable and movable property or actionable claims of the ‘Corporate Debtor’ - affected person or not - compromise failure or not - promoters can act as resolution applicant or not - HELD THAT:- In the present case, the ‘Liquidator’ is playing the role of a ‘Resolution Professional’, since the ‘compromise proposal’ is placed before him, which is equivalent to a ‘Resolution Plan’. Further the ‘Resolution Applicants’ are entitled to be present when the ‘Resolution Plans’ are opened and placed before the ‘Committee of Creditors’ as per Scton 30(5) of the Code. At this juncture, they may point out whether one or other ‘Resolution Applicant’ is ineligible in terms of Section 29(A) of the Code or not.
As per the preamended definition Section 29A of the I & B Code, the ‘Promoters’ could be the ‘Resolution Applicant(s)’ per contra, under the new definition ‘Promoters’ are not included in the definition of ‘Resolution Applicant’ as they are not mentioned in Clause (H) of Section 25(2) of the Code. The restriction under Section 29A of the Code shall apply when an ineligible person or any other person acting jointly with such person submits a ‘Resolution Plan’. The restriction shall also apply if such person is a connected person to a ‘Resolution Applicant’ as defined in explanation to Section 29A of the Code - The ‘term’ ‘connected persons’ as defined in explanation means, any person who is the ‘promoter’ or in the management or control of the Resolution Applicant or any person who shall be the ‘Promoter’ or in management or control of the business of the ‘Corporate Debtor’ during the implementation of ‘Resolution Plan’ or the holding Company, subsidiary Company, Associate Company or related party of a person referred to in clauses (i) & (ii) of Section 29A of the Code.
Any person who is either promoter or in the management or control of the business of the ‘Corporate Debtor’ is ineligible by default under the I&B Code. The Provisions of Section 29A of the Code came into force from 23.11.2017 and further that the requirements of Section 29A of the Code applies to ‘CIRPs’ initiated after 23.11.2017.
Assessment - HELD THAT:- Since the ‘Liquidation’ order was passed on 20.12.2018 in MA/646/2018 by the ‘Adjudicating Authority’ and that the ‘Resolution Professional’ Mr. G.V. Ravikumar was appointed as ‘Liquidator’ (‘Respondent’ in the ‘instant Appeal’). Added further the ‘Compromise Proposal’ was given on 24.09.2019 by the ‘Promoter’ and in reality, the Section 29A of the Code was amended with a retrospective effect from 23.11.2017 and in view of the fact that the retrospective amendment to Section 29A of the Code applies to the ‘Promoter(s)’, they are ineligible to project a ‘compromise proposal’/ ‘arrangement’ for taking back the immovable and movable properties or actionable claims of the Corporate Debtor in the considered opinion of this ‘Tribunal’.
Liquidator - HELD THAT:- It is to be remembered that Section 34 of the I & B Code, 2016 deals with ‘Appointment of Liquidator’ and ‘fee to be paid’. Section 34(2) of the Code enjoins that on the ‘appointment of a Liquidator’, under this Section all powers of the ‘Board of Directors’, Key Managerial Personal and the partners of ‘Corporate Debtor’ as the case may be, shall cease to have effect and shall be vested in the ‘Liquidator’.
Liquidator’s Position - HELD THAT:- Without the ‘Respondent’/‘Liquidator’ taking necessary steps, no such application to secure a ‘MSME Certificate’ was to be filed and suffice it for this ‘Tribunal’ to point out that in the ‘instant Case’, the proponents of the scheme obtaining a ‘MSME Registration Certificate’ on 03.10.2020 without the knowledge of the ‘Liquidator’ and either ignoring or brushing aside him are clearly unsustainable in the eye of Law - the ‘Liquidator’ is required to adhere to the procedure prescribed under the Code and before taking steps to sell the ‘Corporate Debtor’s Assets’ (Company) he will take necessary steps as per Section 230 of the Companies Act and that the ‘Adjudicating Authority’ if situation so warrants is to pass appropriate orders. Before approval of an arrangement or scheme, the ‘Adjudicating Authority’ by following the principles can allow the ‘Liquidator’ to form the ‘Committee of Creditors’ for its opinion to find out whether the arrangement of scheme is viable/feasible one and having correct financial matrix.
On a careful consideration of respective contentions and on overall assessment of the whole gamut of the entire facts and circumstances of the present case, this ‘Tribunal’ comes to an inescapable conclusion that the Adjudicating Authority in the Impugned Order came to the right conclusion that the scheme was proposed by the Ex-directors and promoters of ‘Corporate Debtor’ and further that a ‘Creditor’/‘Member’ who is ineligible under Section 29A of the I & B Code, 2016 was disqualified to be a proponent of the scheme as per Section 230 of the Companies Act, 2013, which requires no interference in the hands of this ‘Tribunal’ sitting in ‘Appeal’.
The Appeal is devoid of merits - Appeal dismissed.
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2021 (7) TMI 1091 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , 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 - quantum of outstanding amount - HELD THAT:- In this case it is observed that there is no confirmation of counter claim of corporate debtor from operational creditor, even in the reply to the demand notice, it was unsupported by the invoices, delivery challans and GST payments. Truck Number - one of the consignment number is not correct and all the invoices and deliveries are of one day. Simply making GST payment cannot prove that they have supplied the material to the other side. The Corporate Debtor has never raised that they have due recoverable from the operational creditor prior to the issue of the reply to the demand notice.
Rule 46 of CGST Rules, R/w Rule 48 of CGST Rules permits manual GSTIN Number. For the issues is that the Corporate Debtor invoiced is not supported by the purchase order nor a confirmation of account at a later date from the operational creditor.
The Corporate Debtor is a healthy company, not substantiated by the corresponding balance sheet of the company as they have not filed the same nor alone this cannot be a sole basis to substantiate that it does not require to go to CIRP. High turnover with positive net worth may reflect good fund flow but it does not substantiate a good cash flow - thus, if the corporate debtor is unable to pay its debt, while debt is legally due and default has occurred, dispute not raised or substantiated prior to the issue of demand notice then the Code can be enforced for timely resolution of Insolvency and Bankruptcy.
Thus, prima facie the Corporate Debtor needs CIRP and accordingly, the impugned order of the Adjudicating Authority invoking the provisions of the Code is in right spirit. Hence it needs to be uphold - the appeal is dismissed
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2021 (7) TMI 1086 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - although the contingent liability was existing, the same was not shown in the Annual Return - documents concerned were public document - whether Appellant is justified to carry the appeal only because the Adjudicating Authority had given directions to produce the Balance Sheets? - HELD THAT:- The Application under Section 9 of IBC has been pending before the Adjudicating Authority since December, 2019. Keeping in view Section 9 of the IBC, it was required to be ordered upon in 14 days with Limited Notice to the Corporate Debtor. When above interim order was passed, the matter has been carried to this Tribunal and on 10th August, 2020 relying on the judgment of V. Padmakumar Vs. Stressed Assets Stabilisation Fund & Anr. [2020 (3) TMI 1244 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI], the appeal was sought to be entertained. This Tribunal had then granted stay to the hearing before the Adjudicating Authority.
The Adjudicating Authority which is basically dealing with the matter in summary manner, is not bound by the procedure laid down by the Code of Civil Procedure but shall be guided by the principles of natural justice and can regulate its own procedure. Even if Order XI Rule 12 of CPC may be prescribing that any party may without filing affidavit apply to the Court for Discovery of Documents, the same does not stop the Adjudicating Authority from regulating own procedure reading sub-section (2) with sub-section (1) if the Adjudicating Authority in the course of arguments finds that it needs to peruse particular documents.
In the present matter the Adjudicating Authority was not dealing with any application filed or sought by the Operational Creditor but while hearing the arguments in the matter which was on pre-admission stage and not yet admitted, the Adjudicating Authority found it necessary to go through the Profit and Loss account and Balance Sheets of the Company. As such it passed the impugned order.
The Application under Section 9 of IBC has been pending for long and against the spirit of provisions of IBC. The delay must be affecting the maximization of value of assets. The merits of the application under Section 9 have yet not been adjudicated and decided and so we are not entering in the issue whether there was a pre-existing dispute - It is apparent that for hearing the matter, the Adjudicating Authority needed a particular document which is even otherwise admittedly a public document. If that was so, there was no good reason to file the present appeal and to raise a dispute as has been raised.
Appeal is dismissed.
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2021 (7) TMI 1085 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Validity of approved Resolution Plan - challenge on the ground that in the Resolution Plan towards statutory dues and claims the approval was settled at Nil Value and the claims stood extinguished - HELD THAT:- The Reply of Respondent No. 2 refers to the approved Resolution Plan at Annexure R-1 page 63 and reference is made to Paragraph 3.5 which deals with proposal for Operational Creditors where the Resolution Applicant stated that Liquidation Value payable towards full and final extinguishment of statutory dues and claims is expected to be Nil and the Liquidation Value is insufficient to meet the dues of even secured Financial Creditors and thus the minimum statutory discharge payable is Nil and so Nil payment has been proposed towards statutory dues and claims.
Adjudicating Authority has considered the Revised Position of claims received as on 28th October, 2020 (Paragraph 4 of the Impugned Order) which showed that the amounts claimed by the Financial Creditors admitted were ₹ 20,904,644,307/- and that the dues of Operational Creditors (Workman and Employees) admitted were of ₹ 82,253,253/-. It is recorded that amounts claimed by Operational Creditors (Statutory Dues, Liabilities including outstanding government authority dues, taxes, etc.) were ₹ 4,827,297,551/- (which includes amounts admitted on provisional as well as contingent basis). Then there are dues which were admitted by Operational Creditors (Other than Workmen and Employees and statutory dues) which were of R. 213,192,038/- (including amount admitted on/contingent basis). Considering these amounts and the Liquidation Value, it is difficult to find fault with the Resolution Plan as has been approved. There is substance in the submissions made by the Resolution Professional that if the Corporate Debtor was to go in Liquidation, the Appellant would get Nil amount.
The claims made by the Appellant need not be accepted to find fault in the Resolution Plan - appeal dismissed.
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2021 (7) TMI 1081 - NATIONAL COMPANY LAW TRIBUNAL , JAIPUR BENCH
Seeking setting aside of the rejection of claim of the Applicant by the Liquidator - Section 42 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The Applicant charging 12% interest on the outstanding amount is not wrong. Moreover, the contention of the Respondent that the assignment of debt (if it can be so called) in the form of letters of ultimate suppliers, require stamp duty to be paid as mandated under law. However, the Respondent has admitted to the fact that ₹ 3,61,595/- was reflecting in the books of accounts of the Corporate Debtor, on the basis of which the Respondent admitted the said principal amount. Therefore, there are no reason in delving into the approval of the principal amount and the claim of the Applicant including interest is due and payable by the Corporate Debtor.
The claim of the Applicant in respect of M/s. Shyam Enterprises cannot be denied, to the extent of the principal amount. And the claim of the Applicant with respect to the interest charged is still unclear, as no proof/documents/evidence have been provided by the Applicant. In the circumstances, the Liquidator shall verify the veracity of the claims of the Applicant with respect to the interest amount and take a decision accordingly.
It is seen that the Corporate Debtor was maintaining a running account on ledger basis of both the Applicant as well as the ultimate suppliers. The Liquidator while accepted the claim of ₹ 3,61,595/- of the Applicant in respect of M/s. Sohan Lal & Sons, there is no reason why a different and a rather inconsistent logic/approach shall be adopted by the Liquidator in terms of the claim of the Applicant in respect of M/s. Shyam Enterprises, in particular when the Corporate Debtor remained under the shadows of BIFR and hence, isolated itself from any claims/recovery.
It is seen that the claim of the Applicant excluding interest amount of ₹ 7,86,276/- (M/s. Shyam Enterprises) is admissible - Liquidator is directed to act in accordance with the observations of this Adjudicating Authority.
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