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Insolvency and Bankruptcy - Case Laws
Showing 61 to 80 of 133 Records
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2021 (9) TMI 930 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - NPA - debt was within time limitation or not - appellant claims that the said debt is time-barred and that State Bank of India could not have initiated proceedings under Section 7 of IBC - HELD THAT:- Section 7 of IBC provides that Financial Creditor either by itself or jointly with other Financial Creditors or any other person on behalf of Financial Creditor as may be notified by the Central Bank may file an Application for initiating Corporate Insolvency Resolution Process against a Corporate Debtor before the Adjudicating Authority when a default has occurred. Considering this, even if the State Bank of India was part of the consortium or there are documents executed between the parties, or there are circulars of RBI as to how Banks should try to help the defaulting debtors with CDR Packages and how date of NPA should be calculated, still in IBC for Section 7 of IBC, the material factor is that the State Bank of India is a Financial Creditor whose debt is outstanding and it was in default on the part of the Corporate Debtor and thus the State Bank of India has a right to move Application under Section 7 of IBC. The personal documents between the parties cannot take away such statutory right of the Bank to initiate proceedings. If the Lead Bank for any reason does not take steps or fails to take steps, the other Banks in the consortium cannot be left high and dry without any remedy, as Limitation Act does not differentiate on such count.
It is clear that if that account of the Corporate Debtor with the State Bank of India became NPA on 15.01.2013 there is firstly acknowledgement in Letter dated 21st May, 2015 and then there is another acknowledgment vide letter dated 15.06.2016 as referred above. As such, Section 7 of IBC Application filed on 05th March, 2018 must be said to be within limitation - It is clear from Clause (a) of the Explanation of Section 18 of the Limitation Act that even if an acknowledgment is made to person other than a person entitled to the property or right, still it shall fall in the definition of Explanation below the Section 18 of the Limitation Act.
The Adjudicating Authority rightly found the Application to be within limitation and has rightly admitted the Application filed by the State Bank of India - Appeal dismissed.
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2021 (9) TMI 929 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Ex-parte order filed by the Corporate Debtor filed for initiation of CIRP - power of Adjudicating Authority to use power under Rule 49 of National Company Law Tribunal Rules, 2016 at belated stage - Section 424 (1) of the Companies Act, 2013 r/w Rule 11 of the National Company Law Tribunal, Rules, 2016 - HELD THAT:- Admittedly, the Ld. Adjudicating Authority has vide order dated 27.05.2020 admitted the application under Section 9 of the IBC filed by the Operational Creditor Respondent No. 1 and the Appellant has filed the Application for setting aside the ex-parte order on 06.11.2020 under Section 424 (1) of the Act r/w Rule 11 of NCLT Rules, 2016 stating that the Corporate Debtor has not received the notice. It is also an admitted fact that CoC has been constituted on 20.11.2020 i.e. after filing of the aforesaid Application for setting aside ex-parte order of admission.
It is settled that once the Application under Section 7 or 9 is admitted and CIRP initiated, such proceeding is in rem. Being a proceeding in rem, it is necessary that the body which is to oversee the resolution process must be consulted before any individual corporate debtor is allowed to settle its claim. Before a CoC is constituted, a party can approach the Adjudicating Authority directly and the Adjudicating Authority may in exercise of its powers under Section 12A of the IBC r/w Regulation 30A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 allow or disallow an application for withdrawal or settlement - after constitution of CoC the Adjudicating Authority cannot set aside even ex-parte admission order and in such a situation the Corporate Debtor has to file the Appeal under Section 61 of the IBC.
In the present case, the Application under Section 9 was admitted on 27.05.2020 and the Appellant (Corporate Debtor) has filed the Application for setting aside the ex-parte admission order on 06.11.2020 whereas the CoC has been constituted thereafter on 20.11.2020. In such a situation before constitution of CoC the Ld. Adjudicating Authority can consider the Application for setting aside ex-parte admission order but after constitution of the CoC the Ld. Adjudicating Authority cannot in exercise of power under Rule 49(2) of the NCLT Rules, 2016 set aside the ex-parte admission order. Ld. Adjudicating Authority has passed the impugned order after constitution of CoC i.e. on 23.03.2021, therefore, there are no illegality in the impugned order.
Appeal dismissed.
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2021 (9) TMI 928 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Squaring off was preferential transaction under Section 43 - undervalue without permission of the Resolution Professional - Violation of Principles of Natural Justice - Squaring off Receivables against Debt - Sale of Car in Moratorium - HELD THAT:- The Impugned Order shows that for the Appellant Mr. Navin Arora I/B AA Associates had appeared. There is nothing on record to show that this Advocate apprised the Adjudicating Authority that he is not instructed in I.A. 1108 of 2020 or that he apprised the Adjudicating Authority that for I.A. 1108 of 2020 for same Appellant (Respondent before Adjudicating Authority) there were different advocates appearing. We reject such approach, which are means of creating grounds to protract matter. There is no material also to show that on 07th January, 2021 or soon thereafter any grievance was raised with the Adjudicating Authority in writing that name of wrong advocate is shown for Respondent with regard to the M.A. concerned - the ground that Principles of Natural Justice were violated is rejected.
Squaring off Receivables against Debt - HELD THAT:- The entries were made by the Appellant who was functioning as Chief Executive Officer which was admittedly done on 31st March, 2018 which was after filing of the Application under Section 7 of IBC on 6th March, 2018. He has squared off what he had to receive against what was to be received by the Corporate Debtor from the three entities referred. What is the deal/understanding between him and the three entities is within the knowledge of the Appellant - On record fact remains that there is transfer of interest of the Corporate Debtor (which was to receive the amounts from the three entities) for the benefit of the Appellant Chief Executive Officer of Corporate Debtor who had to receive back unsecured loan given to Corporate Debtor, and this would put to detriment the other creditors of the Corporate Debtor - the Appellant was hit by Section 43 of IBC.
Sale of Car in Moratorium - HELD THAT:- The Appellant is guilty not only with regard to the contravening moratorium and liable for action under Section 74 of IBC but is also liable for misconduct in course of CIRP under section 70 of IBC. It appears that the Resolution Professional and the Adjudicating Authority need to ask the Appellant to explain the amount actually received under the sale of the car and to consider if it is also a case of criminal misappropriation - No doubt this is an appeal filed by the Appellant to clear himself of the liability to pay but Resolution Process, not being an adversarial litigation, when we notice violation of the provisions of IBC, under Rule 11 of NCLAT Rules we can make such orders as are necessary for meeting the ends of justice and to prevent abuse of the process of the Tribunal.
The directions given by the Adjudicating Authority directing the Appellant to deposit ₹ 91,56,687/- toward amount which was squared off by the Appellant
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2021 (9) TMI 927 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Benefit of provision of 90 days to pay balance sale consideration - amended clause 12 of Schedule I of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- Considering the material placed by them, it does appear to us that the laudable object with which Clause 12 was substituted is defeated by issuing such Circular dated 26.08.2019. When in an auction somebody has given a higher bid, if instead of 15 days, the person gets a breathing time of 90 days to make a payment, no other person gets affected - Para 3.2 of the Discussion Paper referred to Regulation 32 and the option to explore sale of Corporate Debtor as a going concern along with the other available sale options and the need to provide complete framework to enable the Liquidator to exercise the option. The Discussion Paper tries to balance need to be within timeframe for maximisation of the value and the need to have sufficient time for steps to be taken. In such backdrop, Para 5.2.2 was included in the Discussion Paper with regard to difficulties found by Liquidators when time is of mere 15 days.
Power of Board under Section 196(1) (p) or (t) to issue guidelines cannot be expanded to interpreting provisions made. That is job of Courts to interpret and apply law. Reading the Regulation as amended we find it must be held to be applicable to liquidation process which are pending, and the provision can be applied considering stage of the process, irrespective of the date whether the liquidation process started before 25.07.2019 or on or after 25.07.2019 when Clause 12 Schedule I of the Regulations was substituted. This is not to say that sales already cancelled before 25.07.2019 for default of payment under earlier existing clause 12 can be reopened. Liquidators can rely on the amendment at the time of issue of Auction Notice being issued, irrespective of date of liquidation order of Adjudicating Authority. The Circular dated 26.08.2019, we hold is not legally enforceable to interpret applicability. Such Circular cannot be in the nature of substituting existing Regulation in the name of guidelines.
The order passed by the Adjudicating Authority is modified and it is held that the Appellant- Liquidator would be at liberty to apply and enforce amended Clause 12 of Schedule I of the Liquidation Regulations to the liquidation process even though initiated before 25.07.2019 - appeal disposed off.
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2021 (9) TMI 926 - 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 - dispute with regard to demand notice - HELD THAT:- It is not that anybody has come on behalf of Operational Creditor to object to the manner in which the resolution was passed. On the basis of technicalities raised by the Corporate Debtor, it is not found that much weight can be given to the argument raised on this count.
Dispute raised with regard to the notice under Section 8 of IBC or not - HELD THAT:- The Notice is dated 11.12.2017 at Appeal page 87 to 89. The dispute raised is that this notice is not in format and as required under Section 8 read with Rule 5(a) of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 (‘Rules’ in short). There is Form 3 below the Rules with regard to the format - For mere technicality that the notice should purport to be in the format (although sufficiently meeting the requirements of the format) we do not want to ascribe undue weight to such argument which is mere technicality.
The Adjudicating Authority has rightly found that there are dues outstanding which attract Section 9 of IBC. The Appellant is trying to confuse by referring to portal of ‘Icegate’ but when there are documents in favour of the Operational Creditor, it is not found that Appellant is able to show that the goods were not received and that the Corporate Debtor did not have any liability to pay. We do not find any fault with the impugned order admitting the Application under Section 9.
Appeal dismissed.
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2021 (9) TMI 891 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Non-filing of claim by appellant despite public announcement as well as the intimation through email to Insolvency Professional - It is the case of the Appellant that they were neither intimated nor were they aware about the fact that the last date of submission of claim has expired - HELD THAT:- In the instant case the Resolution Plan was approved by 91.02% of the Members of CoC and is pending approval before the Adjudicating Authority and was last listed for hearing on 16.06.2021. The literal language of Section 12 mandates strict adherence to the time frame it lays down. Time and again, the Hon’ble Supreme Court in [2017 (9) TMI 58 - SUPREME COURT] has noted that the model timelines provided in Regulation 40A of the CIRP Regulations should be followed as closely as possible - In this case, on account of lockdown and pandemic the last date was extended from 31.03.2020 to 16.08.2020 to facilitate all creditors to file their claims. In the background of this factual matrix, we hold that the delay/latches are on behalf of the Appellant and there is no dereliction of duty on behalf of the IRP/PR.
The Resolution Professional was not duty bound to collate claims which are belatedly received after the last date thereby delaying the entire CIRP which is a time bound process and further having regard to the fact that the claim of the Appellant was incorporated in the Information Memorandum which was circulated to the Prospective Resolution Applicant and the Members of the Committee of Creditors for their consideration, there is no dereliction of duty on behalf of the IRP/RP as provided for under Sections 18 and 21(1) of the Code.
Appeal dismissed.
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2021 (9) TMI 861 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Sanction of scheme of amalgamation and arrangement - rejection of Scheme of Amalgamation and Arrangement which had been approved by NCLT - inherent powers under Rule 11 of NCLAT Rules, 2016 - HELD THAT:- The concerned order of this Tribunal sought to be modified/ clarified has dealt with the scheme as a whole which was proposed and which was challenged and after going into the various details and the objections raised by the Regional Director, the Appeal was allowed. The Appellant challenging the Scheme of Arrangement and Amalgamation claimed that the scheme was impermissibly promoter oriented, anti-minority, anti-public shareholders, illegal, unlawful, unjust and against the public policy. The Appellant claimed that the Scheme of Arrangement and Amalgamation inter se the Respondent Companies is illegal and bad in law. This Tribunal considered the grievances of the Appellant as well as Intervenors and inter alia this Tribunal referred to the Valuation Report - It is clear that even the Regional Director looked at the scheme as a composite scheme of arrangement/ merger/ amalgamation filed with the applications and thus we do not find that the argument that the scheme should be segregated in the context of Private Limited vis-à-vis Public Limited Companies.
It is quite clear that the Section applies if order has been made under Section 230 sanctioning compromise or arrangement, modification can be done if it is necessary for proper working of the scheme. In the present matter even if NCLT had passed order under Section 230, said order was reversed by this Tribunal. When the scheme has been rejected, Section 231 cannot be relied upon to seek a modification.
The Application is rejected.
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2021 (9) TMI 831 - SUPREME COURT
Maintainability of application - initiation of CIRP - Financial Creditors or home buyers - possession of flats were offered by the Corporate Debtor - NCLT rejected the application - existence of debt and default or not - HELD THAT:- The NCLT found that on 1st October 2016 the Financial Creditor had entered into an agreement with the Corporate Debtor, for purchase of a flat in a complex which the Corporate Debtor was developing. In terms of the said agreement the outstanding dues of the Corporate Debtor were to be appropriated towards consideration for the flat - The NCLT held that the Financial Creditor had chosen to enter into an Agreement with the Corporate Debtor for purchase of a flat in the “Kumar Golf Vista”. The Financial Creditor could, in case of default on the part of the Corporate Debtor, to maintain a petition as home buyer.
The NCLAT found that the admitted document executed between the parties which was the latest in point of time, was the agreement dated 1st October 2016. Considering the contents of the said agreement, the NCLAT found no reason to disagree with the adjudicating authority - The records showed that the Corporate Debtor had in terms of the said agreement dated 1st October 2016, which was the latest arrangement between the parties, offered possession of the flat to the Financial Creditor on 7th March, 2018. As such, there was no default in compliance of the terms and conditions of the said agreement.
Appeal dismissed.
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2021 (9) TMI 795 - NATIONAL COMPANY LAW TRIBUNAL — CHENNAI BENCH—I
Remission of share of the CIRP costs and expenditure in proportion to their voting rights - whether the first respondent is required to pay the CIRP in relation to the corporate debtor and if not so, what will be consequences? - HELD THAT:- In the claim form filed by the first respondent along with DBS Bank Ltd., Singapore, the proceeds of the amount pursuant to the resolution plan, if any, approved by this Tribunal would go into the account of the DBS Bank India Ltd. - As per regulations 33 and 34 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 it is the duty of the members of the committee of creditors to pay the fees and the cost incurred by the resolution professional, once the same has been ratified by the CoC by passing a resolution to that effect.
The first respondent in the present case is not willing to pay the CIRP costs citing the reason that they have to get approval of the RBI in order to the pay the CIRP costs in relation to the corporate debtor, which reason we find it quite bizarre and we are unable to comprehend. The first respondent is ready to receive the proceeds of the resolution plan, into its bank account, however for the purpose of the paying the CIRP costs they are raising a feeble defence that they have to get the approval of the RBI - The Regulations framed by the IBBI and the provisions of IBC, 2016 have no specific provisions in relation to the same. However, it would be a futile exercise, if we direct a member of the CoC who has already expressed its inability to make the payment towards the CIRP costs.
The IBC, 2016 being a time bound process ; the RP cannot run from pillar to post to collect the CIRP cost. Hence, on equity, since the first respondent cannot contribute towards the CIRP costs, the first respondent is debarred from participating in the meetings of the CoC. Also, the first respondent has categorically stated in the counter that they are not the financial creditor in respect of the corporate debtor and they are acting only as an arranger for DBS Bank Ltd., Singapore. Since both of them are not ready to bear the CIRP costs, both the first respondent as well as DBS Bank Ltd., Singapore cannot participate in the meetings of the CoC.
The first respondent has expressed its inability to pay the CIRP costs, the applicant is directed to remove the first respondent from the member of committee of creditors and to reconstitute the CoC afresh, without the first respondent - application disposed off.
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2021 (9) TMI 794 - 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 financial debt in terms of Debenture Trust Deed (DTD) and default committed by the Corporate Debtor as envisaged in the events of default - HELD THAT:- The execution of DTD dated 08.03.2019 and Supplementary Trust Deed dated 22.03.2019 demonstrate existence of Financial Debt in pursuance of Section 5(c) of the Code and the essential ingredients of debt which is disbursed against consideration of time value and money is thus satisfied. It is undisputed fact that an amount of ₹ 72 crores was disbursed by the Petitioner No. 3 to the Corporate Debtor as on 11.03.2019. The Petitioner No. 3 further was not able to disburse the second tranche and sought amendment of the DTD vide email dated 26.07.2019. The first coupon was payable by the Corporate Debtor as on 11.09.2019, however, despite extension of grace period till 15.10.2019, the Corporate Debtor failed to make the payment of ₹ 2,18,95,890.41/- as on 15.10.2019 - The events of default as contemplated under the DTD stipulate that on occurrence of default and nonpayment of coupon, the entire amount of outstanding loan became due and payable. Thus, the rights of the Debenture Holder/Debenture Trustee crystallized immediately upon default and the rights of the Petitioners are well defined under the DTD.
The essential ingredients of Section 7 Application, i.e., financial debt under Section 5(8) of the Code and the default under Section 3(2) of the Code are met. The Petition was filed on 28.11.2019. Thereafter, the Corporate Debtor has invoked the Arbitration Clause under Section 9 of the Code and the Arbitrator was appointed by the Bombay High Court. The Interim Award was passed by the Arbitrator wherein he has directed the Corporate Debtor to pay an amount of ₹ 72,06,99,224/- with further interest - this petition is not maintainable under section 7 and has to be treated as an application of section 9 of the code, the petition was filed prior in time before the commencement of arbitration proceedings and the Petitioners have exercised their rights of initiation of CIRP against the Corporate Debtor under the Code.
There has been a debt and non-payment of coupon interest as on 15.10.2019 which triggered the event of default and the rights of claiming redemption of entire amount is guaranteed under DTD. Therefore, this Bench notes that the passing of Interim Award only confirms the debt by the Arbitrator and thus, all the allegations regarding wrong invocation of pledge etc. are misconceived and the Petitioners has the right to affect the sale of pledge share in any manner it deems fit.
This Bench is of the opinion that there is a clear debt and default on the part of the Corporate Debtor and the Petition deserves admission - Petition admitted - moratorium declared.
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2021 (9) TMI 793 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH
Seeking approval of the period of exclusion - Section 47A of the Insolvency and Bankruptcy Code, 2016 - period between 23rd March 2020 and 31st August 2020 and 10.05.2021 to 21.06.2021 - seeking to Approve an extension of 1 Year from 23rd November 2021 to continue the liquidation period - Regulations 44(2) of the Insolvency and bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- It is seen that the Liquidator is yet to complete the Liquidation process in relation to the Corporate Debtor and all the e-auctions conducted by the Liquidator have failed. Further, due to the prevailing Covid - 19 pandemic and subsequent lock-down imposed by the Government of India and the State Governments, the Liquidator was unable to complete the Liquidation process of the Corporate Debtor within the time limit prescribed under the Code and in terms of Regulation 44 of the IBBI (Liquidation Process) Regulations, 2016.
Regulation 44(2) of IBBI (Liquidation Process) Regulations, 2016, which was amended upto 15.12.2016, is taken into consideration for the facts of the present case and it contemplates that if the liquidator has failed to liquidate the Corporate Debtor within two years then he has to make an application to the Adjudicating Authority to continue such liquidation, along with a report explaining why the liquidation has not been completed specifying the additional time that shall be required for completion of the liquidation.
This Authority feels that it is just and proper to extend the Liquidation period for a further period of one year and as such the Liquidation period of the Corporate Debtor is extended for a period of one year from the date of this Order and the Liquidation process in relation to the Corporate Debtor is required to be completed on or before 02.08.2022 - Application allowed.
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2021 (9) TMI 790 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Jurisdiction - Power of Tribunal to order registration of transfer of shares held by Corporate Debtor - e-auction - HELD THAT:- It is trite law, that the claims/dues of R1 society pertaining to the preadmission of CIRP, had to be filed before the Applicant and if these claims were not filed with the Applicant and these are not realizable unless the claims are filed with the Applicant. Be that as it may, the R1 society cannot exercise any lien/create encumbrance on the said property as the said property has been sold by way of e-auction and the rights of title/ownership/possession has been passed on to the R3 vide a Registered Sale Deed executed on 10.03.2021.
This Bench is of the considered opinion that the property has been validly transferred to the R3 vide Registered Sale Deed dated 10.03.2021 and that the R1 cannot link granting of NOC to its past dues. The transfer of property act contemplates transfer of title/ownership/possession, there can be no fetters attached to such transfers which have been conducted by a process of e-auction and it is held in catena of judgments that the claim of dues of the society amounts to be an Operational Debt and cannot be linked or claimed from the third party bonafide purchaser.
Respondent No. 1 is directed to transfer shares of Corporate Debtor in favour of Respondent No. 3 and grant NOC in favour of Respondent No. 3 - Respondent No. 1 is directed to file its claims/dues of Respondent No. 1 society to the Applicant forthwith - application allowed.
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2021 (9) TMI 788 - NATIONAL COMPANY LAW TRIBUNAL — MUMBAI BENCH—COURT NO. 1
Seeking approval of the resolution plan - section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In view of the ruling of the 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], the resolution applicant takes over the corporate debtor with all its assets and liabilities as specified in the resolution plan subject to orders passed herein. As already indicated the resolution plan has been approved by the CoC with 67.01 per cent. votes in its meeting held on December 31, 2020 - In the said case, the hon'ble apex court clearly laid down that the Adjudicating Authority would not have power to modify the resolution plan which the CoC in their commercial wisdom have approved.
The instant resolution plan meets the requirements of section 30(2) of the Code and regulations 37, 38, 38(1A) and 39(4) of the Regulations. The resolution plan is not in contravention of any of the provisions of section 29A of the Code and is in accordance with law - Application allowed.
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2021 (9) TMI 787 - NATIONAL COMPANY LAW TRIBUNAL , HYDERABAD BENCH
Direction to respondents to make contributions to the assets of the Corporate Debtor - ex-management of the Corporate Debtor and related parties carried on the affairs of the Corporate Debtor in a fraudulent manner with intent to defraud its creditors - related parties are the beneficiaries of such fraudulent transactions or not - section 66 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- After rejection of the Resolution Professional's first application under section 66 of the Code, the Resolution Professional collected and produced on record some additional evidence in the form of Forensic Audit Report dated 24.12.2018 prepared by M/s. Haribhakti & Co.
It was found from the loan amount, the Corporate Debtor had created Fixed Deposits and sought loan to its subsidiary companies pledging those Fixed Deposits. It was done in the year 2016, viz. almost five years after the Consortium of Lenders granted and disbursed the Corporate Debtor some amounts of loan. The Resolution Professional has averred that under section 25(1) of the I&B Code the Corporate Debtor has issued notice dated 19.02.2014 for withdrawal of an amount of ₹ 1452 crores in order to invest the said amount in plant and machinery, for carrying some civil work, to invest some amount in fixed assets for laying transmission lines, etc. In view of this it was for the Resolution Professional to put on record the material indicating that though the Corporate Debtor has shown the above expenses, in fact, those amounts were not spent at all for the purpose for which it is shown to have been spent -
It is not in dispute that the Liquidator (then Resolution Professional) has sold the Corporate Debtor as a going concern. It means that the Corporate Debtor was a going concern throughout the CIRP period and hence it has to be held that the entire loan amount has not been misused as alleged by the RP.
Second transaction called in question by the Resolution Professional is that the Corporate Debtor gave advance to M/s. Sokeo Power Pvt. Ltd. in 2014. It was independent transaction carried out by the Corporate Debtor and the creditors having no relations thereto except the allegation that the Corporate Debtor ought not to have advanced such amount and the amount was given in advance to defraud them - there are no reason to record any finding other than the finding of fact recorded by this Adjudicating Authority while rejecting the earlier application filed by the RP.
There is one more aspect which needs our serious consideration. It is not in dispute that now some members of the Consortium of Lenders have filed an F.I.R. against the respondents and officers of the Axis Bank alleging that the disputed transactions are fraudulent in nature. Central Bureau of Investigation (CBI) has registered a crime and has started investigation into the matter. Now at this stage, can this Adjudicating Authority, in its limited jurisdiction, record finding that the transaction in dispute is per se fraudulent in nature. In our considered opinion it would be against the cannons of justice. Let the prime investigating agency investigate into the allegations. Let the competent court, during the trial, record findings of fact.
The RP/Liquidator could not establish that the transactions in dispute are fraudulent in nature. This finding is recorded for want of sufficient material before us and hence the respondents cannot be called upon to contribute to the assets of the Corporate Debtor as per section 66 of the I&B Code, 2016 - Application dismissed.
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2021 (9) TMI 759 - NATIONAL COMPANY LAW TRIBUNAL , GUWAHATI BENCH
Seeking exclusion of 55 days from the timeline of Resolution Process - section 12 R/W Section 60(5) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- The learned R.P has sought exclusion of 55 days’ time from the timeline of CIRP as approved by the CoC due to the number of litigations including the Writ Petitions filed before Hon’ble High Court by the Suspended Directors, Appeal filed before Hon’ble NCLAT by the CD and lockdown for the second wave of the Covid 2019.
The reasons mentioned in the prayer for exclusion of 55 days from the timeline of the CIRP period are satisfactory. Hence exclusion of 55 (Fifty Five) days are hereby allowed from the timeline of the CIRP - application allowed.
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2021 (9) TMI 758 - NATIONAL COMPANY LAW TRIBUNAL , GUWAHATI BENCH
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute prior to the issue of Demand notice or not - HELD THAT:- There is an existence of dispute from 04.07.2017 i.e. well before the issuance of the demand notice by the OC on 17.05.2019. As per the provision of IBC 2016, an Application filed under Sec 9 0f IBC needs to be rejected if there is an existence of Disputes prior to the issue of Demand notice by the OC upon CD.
This application filed under section 9 of the IBC, 2016 is hereby rejected - Application dismissed.
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2021 (9) TMI 753 - NATIONAL COMPANY LAW TRIBUNAL , GUWAHATI BENCH
Initiation of preliminary enquiry under Section 340 of Code of Criminal Procedure against the Financial Creditor - direction to competent officer or Registry of this Hon’ble Tribunal to make a complaint in writing and send such complaint in writing to the Magistrate of First-Class having jurisdiction - offences under Sections 193, 199, 200, 463 and 471 of the India Penal Code, 1860 - HELD THAT:- There is no need to entertain the prayer made here by the Suspended Management/Director, when the Petition filed by the FC for ₹ 7,43,15,000.00 under Section 7 of IBC has been admitted and CD is under Moratorium. IRP has been appointed by this Bench and he is performing his duties as per the provisions specified under Sections 17, 18, 20 & 21 of IBC, 2016. The IRP/RP is duty bound to examine the documents minutely before admitting any claims submitted by the Creditors including the claim of the Applicant.
Application rejected.
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2021 (9) TMI 747 - 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 - Time limitation - HELD THAT:- The Corporate Debtor has neither filed any reply nor appeared before the bench. The corporate debtor was proceeded ex-parte on 07.07.2021. As per Form V, Part IV, the Corporate Debtor is liable to pay an outstanding sum of Rs. ₹ 6,91,594/- along with interest @ 24% p.a. of ₹ 1,25,161.94/- - The date of default as per part IV, has occurred from the expiry of ten days of receipt of Invoice & the date of receipt of the last invoices was on 08.04.2019. The present application was filed on 04.02.2020, hence the debt is not time barred and the application is 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 complete and the Applicant is entitled to claim its dues, which remain uncontroverted by the Corporate Debtor, establishing the default in payment of the operational debt beyond doubt. The present application is admitted, in terms of section 9(5) of IBC, 2016.
Application admitted - moratorium declared.
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2021 (9) TMI 746 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Liquidation of Corporate Debtor - percentage of distribution of CIRP & liquidation cost, pursuant to sec 53 of IBC, 2016 read with regulation 42 of IBBI (Liquidation Process) Regulations, 2016 between the secured creditors - HELD THAT:- It is evident from the bare perusal of the section 53 of the IBC, 2016 that the proceeds from the sale of the Liquidation assets shall be distributed in such an order that the Insolvency resolution process cost and Liquidation cost to be paid in full in the first and the foremost priority, along with that the Regulation 42 of IBBI (Liquidation Process) Regulations, 2016 clearly specifies that the Liquidation cost shall be deducted before the distribution is made. Whereas, in the present case in hand the applicant submits that the Respondent No. 1 i.e., SIDBI has not paid the contribution towards the CIRP and Liquidation cost except ₹ 60,000/- - in the present case in hand the Applicant/Liquidator's prayer as to whether to charge in the percentage of claim admitted or in the percentage of realization stands answered that the applicant/Liquidator shall calculate the fees proportionately on the basis of realization. The Respondent No. 2 and Respondent No. 3 as stated by applicant in the application do not have any objection to the same. Whereas, the reply filed by the Respondent No. 1 contains no valid contention in respect to calculation of fees Proportionately from the proceeds.
Whether as per regulation 2A of IBBI (Liquidation Process) Regulations, 2016 i.e., amended on 25.07.2019, the financial institution (unsecured creditor) who was the CoC member during the period of CIRP, is liable to pay the CIRP & Liquidation Cost u/s. 53 of IBC, 2016? - HELD THAT:- It is clearly evident that the above said regulation is not applicable on the Liquidation proceedings of the present matter in hand. Further, as submitted by the applicant/Liquidator the realization from assets is enough to cover the Liquidation cost. Hence, the Respondent No. 1 i.e., SIDBI contention that financial creditors to contribute excess of the financial costs over the Liquid assets of the Corporate Debtor as stated in Regulation 2A of IBBI (Liquidation Process) Regulations, 2016 does not stand any merit.
Whether the period of dispute between liquidator & secured creditor should be excluded, to calculate of percentage of fees of liquidator? - HELD THAT:- Since, the Applicant/liquidator successfully listed out the circumstances due to which the delay in completion of Liquidation process has taken place along with the Directions which the Applicant/Liquidator sought from the Adjudicating Authority in respect to the disputes arisen with the Respondent No. 1 i.e., SIDBI hence, the period of dispute between the secured Creditor and the Liquidator is excluded as the applicant successfully shown his bona fide for the delay in completion of Liquidation Process.
Whether the secured creditor, who has realized from the property u/s. 52 of IBC, 2016 is liable to pay the liquidation cost? - HELD THAT:- In the present matter in hand the applicant/Liquidator submitted that the Respondent No. 3 i.e., Corporation Bank raised the objection to bear the Liquidation cost incurred after the date i.e., 16.01.2020 of realization of their property u/s. 52 of IBC, 2016 since, the Respondent No. 3 has already realized from the property thus, it may not be proper to direct the Respondent No. 2 and Respondent No. 3 to bear their part of the Liquidation cost for the delay caused due to dispute between the Applicant/Liquidator and Respondent No. 1. Hence, in this peculiar situation this tribunal directs the Liquidator to meet the Liquidation cost as a priority from the funds realised in liquidation.
Application disposed off.
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2021 (9) TMI 745 - NATIONAL COMPANY LAW TRIBUNAL , KOLKATA 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 Resolution Professional, having not succeeded in getting any Resolution Plan for the revival of the Corporate Debtor, the Adjudicating Authority has no other alternative but to pass an Order, requiring the Corporate Debtor to be liquidated in the manner as laid down in Chapter-III, Section 33 of the Insolvency & Bankruptcy Code, 2016. Further, the Corporate Debtor, Mohan Motors Distributors Private Limited, is also not a going concern, with no employees, and huge accumulated losses - Since there is no other option other than to pass an Order for liquidation of the Corporate Debtor, we are inclined to invoke Section 33 of Chapter-III of the Insolvency & Bankruptcy Code, 2016, ordering liquidation of the Corporate Debtor, namely, Mohan Motors Distributors Private Limited, as laid down in this Chapter.
The Corporate Debtor is ordered to be liquidated - Application allowed.
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