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Insolvency and Bankruptcy - Case Laws
Showing 41 to 60 of 1699 Records
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2021 (12) TMI 1236 - NATIONAL COMPANY LAW TRIBUNAL , INDORE BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The Financial Creditor produced on record the certificate of default of the financial debt by the Corporate Debtor issued by National E-Governance Services Limited. Even otherwise, the Corporate Debtor did not dispute that financial debt more than ₹ 1 Crore is due and payable by it to the Financial Creditor and it has committed default in paying the same. These are only relevant facts for the consideration of this Adjudicating Authority in an inquiry of this application under Section 7 of IBC, 2016 - Financial Creditor has established both facts. This application is defect-free.
Application admitted - moratorium declared.
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2021 (12) TMI 1235 - NATIONAL COMPANY LAW TRIBUNAL — CUTTACK 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 - maintainability of application filed without authorisation - application is barred by limitation or not? - HELD THAT:- When the respondent itself admitted the fact that the amount of ₹ 63,25,464 was shown in the balance-sheets till July 19, 2018 and written-off on July 20, 2018. When the fact is admitted by the respondent there is no need to prove the said fact by the petitioner in view of section 58 of Indian Evidence Act, 1872. For the reasons discussed above it is concluded that the application is not barred by limitation.
Whether genuine pre-existing dispute is there between the parties? - HELD THAT:- It is not known how long the track report available on the public domine, further it is stated that the letters were sent by private courier so the presumption available under section 27 of the General Clauses Act, 1897 cannot be invoked. In this situation petitioner side not proved that the said letters were sent as averred in the petition. Thus, on the respondent side raised the acceptable dispute regarding the entitlement of petitioner for the amount claimed in the petition and the interest - The respondent in its reply notice dated September 6, 2019 denies its liability, the dispute raised by the respondent is substantial in nature it needs further investigation. Thus, this point is answered.
Whether the application filed without authorisation of the applicant-company is maintainable? - HELD THAT:- The operation creditor is a company registered under Companies Act, 1956. In the application there is no averments how the person who filed this application is competent to file the application on behalf of company. Even though he is designated as managing director would have no authority to file the application on behalf of company. There is no board resolution passed authorising the person who filed this application on behalf of the company. In form 5, Chapter II serial No. 6 specifically requires to enclose authorisation. The non-filing of board resolution goes to the root of the case. In this situation it is answered that the application filed on behalf of operational creditor without the authorisation is not maintainable.
As per section 9(5)(ii)(a) if the petition is incomplete same shall be rejected, provided seven days' time shall be granted to rectify the defect - Petition dismissed.
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2021 (12) TMI 1186 - SC ORDER
Approval of Resolution Plan - powers and jurisdiction of the Adjudicating Authority while dealing with the resolution plan approved by the Committee of Creditors - HELD THAT:- In light of the decision of JAYPEE KENSINGTON BOULEVARD APARTMENTS WELFARE ASSOCIATION & ORS. VERSUS NBCC (INDIA) LTD. & ORS. [2021 (3) TMI 1143 - SUPREME COURT], nothing more is required is to be in this petition and the same is disposed of.
Application disposed off.
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2021 (12) TMI 1155 - 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 - respondent's case is that the cheque was issued as a security, which clearly indicates that the respondent/corporate debtor had agreed to pay GST additionally over the amount of consideration - HELD THAT:- There is nothing on record to show that the corporate debtor raised dispute over use of said Trademark sold by the applicant. The corporate debtor has failed to demonstrate that the GST was not payable by it, when a cheque for the same purpose was issued. The defense of corporate debtor regarding pre-existing dispute regarding payment of remaining amount is not supported by any documentary proof.
Since the corporate debtor already-issued a cheque in order to clear its liability towards payment of GST, the claim of applicant deserves to be allowed.
Application admitted - moratorium declared.
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2021 (12) TMI 1154 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Approval of Resolution Plan - Section 30(6) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- It is noted that CoC in its 18th meeting held on 13.01.2021 with 100% voting right approved the Resolution Plan submitted by the Resolution Applicant. It is also noted that Resolution Applicant is not a related party of the Corporate Debtor. Resolution Applicant has filed an affidavit dated 25.09.2020 regarding its eligibility to submit a Resolution Plan under Section 29A of IBC, 2016. Resolution Applicant has also provided the performance security amounting to ₹ 1,00,00,000 crore as a Bank Guarantee.
All contents of the Resolution Plan and all documents/compliance certificates as required under Section 30(2) of IBC, 2016 read with Regulations 36 to 39 of CIRP Regulations, 2016 which have been placed on record is perused. The Resolution Plan complies with all these provisions. The total outstanding debt claims by all stakeholders stand at ₹ 11, 209.74 Lakhs and Resolution Applicant has admitted claims totalling ₹ 10,927.29 Lakhs and amount provided under the plan is 1,019.40 which amounts to 9.09%of total outstanding debt.
The Resolution Plan so approved can be successfully implemented - Resolution Plan approved - application allowed.
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2021 (12) TMI 1153 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD 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 - Sub-standard goods or not - HELD THAT:- The Corporate Debtor categorically stated that "the actual amount payable by the Respondent will be ₹ 3,28,800/-. According to the Corporate Debtor, the Oven supplied by the Operational Creditor was defective. It had burst in April, 2019. The fact that the goods were of sub-standard quality was already informed to the Operational Creditor. However, it is difficult for us to accept this defence. It is not in dispute that as per invoice dated 10.08.2018 (page No. 40-45), the goods were supplied. According to the Corporate Debtor, it got burst in April, 2019 i.e. almost seven months after its installation at the premises of the Corporate Debtor. There is every possibility that the Oven got burst due to want of proper maintenance by the Corporate Debtor.
It is not in dispute that the Corporate Debtor did not reply demand notice under Section 8 of IBC. In earlier notice reply dated 22.05.2019, the Corporate Debtor admitted the debt. Not only that, as per the Corporate Debtor's own statement in reply, it has made payment of ₹ 9,91,200/- and it is ready to pay balance sum of ₹ 3,28,800/-. In such situation the Corporate Debtor's defence that goods received by it was sub-standard cannot be accepted.
The Corporate Debtor had admitted that operational debt of ₹ 3,28,800/- is yet to be paid by it to the Operational Creditor. It had received demand notice but did not make the payment. This application is defect free - application admitted - moratorium declared.
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2021 (12) TMI 1152 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Dissolution of the corporate debtor - Section 54 of the Insolvency and Bankruptcy Code, 2016, read with Regulation 14 of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- It is noticed that since there is no possibility to continue the liquidation process of the corporate debtor in absence of any assets/documents/records and personnel of the corporate debtor. The present case fits in the provisions of Sec. 54 of IBC read with Rule 14 of Liquidation Regulations and it is just and equitable to allow the prayer of the applicant.
It is hereby declared that not only it is just and equitable but because of the fact that no asset is available for the purpose of 'Liquidation', this is a fit case for order of dissolution. The corporate debtor M/s. Ajaz Nanda Designs Private Limited, stands 'Dissolved' from the date of this Order - Since the Company stands Dissolved vide this order and no proceedings are now pending, therefore the Registry is directed that the case file of proceedings be closed and be consigned to records.
Application allowed.
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2021 (12) TMI 1151 - NATIONAL COMPANY LAW TRIBUNAL , ALLAHABAD BENCH
Seeking liquidation of the Corporate Debtor - section 33(1) of the Insolvency & Bankruptcy Code, 2016 - HELD THAT:- RP has filed an application under section 33(1) of the Code, before the Adjudicating Authority for liquidation of the Corporate Debtor and appointment of RP as liquidator who has given his consent to act as liquidator which is placed in the present application. He is stated to have a valid authorization for assignment.
The Corporate Debtor is ordered to be liquidated in terms of section 33(2) of the Code read with sub-section (1) thereof - Application allowed.
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2021 (12) TMI 1150 - NATIONAL COMPANY LAW TRIBUNAL , KOCHI BENCH
Liquidation of the Corporate Debtor - Financial debt or not - Resolution Professional rejected the claim stating that the applicant is not a Financial Creditor and that Term Loan Agreement dated 22.03.2017 executed between the applicant and the corporate debtor was novated by the Settlement Deed dated 04.09.2019 - Section 33 (2) of I&B Code - HELD THAT:- The pre-requisite for a debt to qualify as a ‘financial debt’ is that there must be a “disbursal” of money against the consideration for time value of money. The Hon’ble Supreme Court in Anuj Jain IRP for Jaypee Infratech Limited V. Axis Bank Limited [2020 (2) TMI 1259 - SUPREME COURT] has affirmed the above contention by holding that transactions under Section 5(8) would be falling within the ambit of ‘Financial Debt’ only if they carry the essential element of “disbursal”, and that too against the consideration for time value of money.
The Hon’ble Supreme Court in Pioneer Urban Land and Infrastructure Limited v. Union of India [2019 (8) TMI 532 - SUPREME COURT] has held that for a debt to correspond to the definition of a ‘Financial Debt’ under the Code, there must be “disbursal” which must be a disbursal of money and which must be against consideration for the time value of money. The Hon’ble Supreme Court has conclusively affirmed that there must be actual disbursal of money for a debt to be a financial debt.
It is clear that the applicant’s claim falls under the preview of Financial Debt as defined under Section 5(8) of I&B Code, 2016, which is disbursed against the consideration for the time value of money - Resolution Professional cannot reject a claim stating that financial debt of the applicant originating from the term loan agreement dated 22.03.2017 is merged with the amount settled under the Settlement Deed dated 04.09.2019 without classifying identity of financial debt. The merger of the financial debt and other multi claims emanating under different business transactions into a single settled amount between the parties are so complex making it impossible to cull out or identify the interfused financial debt from other claims or settled claims. The Resolution Professional cannot deny the claim of the applicant stating that a debt lost its character as a financial debt on the basis of amount settled under the Settlement Deed dated 04.09.2019.
In the present case, the Interim Resolution Professional acted as an adjudicating authority and gone into the factual scenario between parties and determined their rights and liabilities. The task of the Interim Resolution Professional was to limit itself to confirm that the claims received by him are true and correct. Here, he failed to clear the contingency existed in the amount and to the best estimate of the amount of the claim based on the information available with him. Instead, the Interim Resolution Professional out-rightly rejected the claim of the applicant without verifying the claim.
The application filed by the Interim Resolution Professional for Liquidation of the Corporate Debtor under Section 33 (2) of I&B Code has been rejected - Application dismissed.
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2021 (12) TMI 1111 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD 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:- It appears that goods have been supplied to Corporate Debtor and invoice has been raised dated 16/07/2019 No. GST/1920/0148 for amount ₹ 4,24,145.00 and due to non-payment of remaining due amount by the Corporate Debtor, the Operational Creditor had issued Demand Notice and the same was duly delivered to the Corporate Debtor. The Corporate Debtor did not reply to the demand notice of the Operational Creditor, however paid the amount of ₹ 2,00,000/- out of total due amount. It is further noted that even after sufficient opportunity. The Corporate Debtor chose not to appear and contest this application.
Hence, the debt amount is admitted and remains to be paid fully as per invoice dated 16/07/2019. There is no pre-existing dispute for the due amount. The present application is filed well within the limitation period and meets the threshold limit as prescribed under section 41 of IBC.
Application admitted - moratorium declared.
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2021 (12) TMI 1110 - NATIONAL COMPANY LAW TRIBUNAL , KOCHI BENCH
Rejection of claim of wages - Section 40(2) of I&B Code - HELD THAT:- On verification of records it is found that the submission of the Respondent that he has not been provided with any order from the appropriate authority in connection with payment of gratuity etc. Since the Appellants have not produced any order of the Labour Court or such authorities the Liquidator on his own cannot decide on disputed liability of them. He can only act on the strength of crystalized claims.
It is the settled position of law that the provident fund, the pension fund and the gratuity fund, do not come within the purview of ‘liquidation estate’ for the purpose of distribution of assets under Section 53 of the Code. Based on this, the only inference which can be drawn is that Pension Fund, Gratuity Fund and Provident Fund can’t be utilised, attached or distributed by the liquidator, to satisfy the claims. Section 36(2) of the I&B Code 2016 provides that the Liquidator shall hold the Liquidation Estate in fiduciary for the benefit of all the Creditors. The Liquidator has no domain to deal with any property of the Corporate Debtor, which is not the part of the Liquidation Estate. It is clear that in terms of sub-Section (4)(a)(iii) of Section 36 all sums due to any workman or employees from the Provident Fund, Pension Fund and the Gratuity Fund, do not form part of the liquidation estate/liquidation assets of the ‘Corporate Debtor.
Some of the Appellants failed to provide any proof of having been appointed in service of employment of the Corporate Debtor and that the benefit accruing to the Appellants shall be subject to documents available on record with the Respondent unless otherwise proven with sufficient evidence that the Appellants were in employment of Corporate Debtor and that the Appellants without properly responding to the communication addressed to them, have now come with the above appeals. This cannot be accepted.
The claim of wages cannot be sanctioned unless the statutorily constituted forums either under the Industrial Dispute Act, Payment of Wages Act and Bonus Act have rendered its decision - appeal dismissed.
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2021 (12) TMI 1058 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI BENCH
Seeking modification of discrimination in payment under the Resolution Plan on the basis of the Assenting and Dissenting/Abstaining Financial Creditor - seeking that all Secured Financial Creditors (FCs) inter alia Applicants be treated equally for payment of plan value subject to their individual exposure with the same terms as that of Assenting FCs - HELD THAT:- Section 30(2)(b) of the Code provides for the payment of debts of the Dissenting FCs in such manner as may be specified by the Board, which shall not be less than the amount to be paid to such creditors in accordance with Section 53(1) of the Code in the event of liquidation. Explanation 1 to Section 30(2)(b) of the Code further clarifies that distribution in accordance with the provisions of this clause shall be fair and equitable to such creditors - It is pertinent to note that the invocation of BG is as per the terms of Resolution Plan. Thus, any increase in the claim amount of the Assenting FCs due to the invocation of such BG cannot be a ground for challenge by the Dissenting FCs on grounds of discrimination. Further, the decision to include the invoked amount of the BG to the fund-based debts is a commercial decision of the CoC.
It is noted that the BG invocation and the revision in the amounts of Assenting FCs is as per the terms of the Resolution Plan - Resolution Plan once approved by the AA shall stand frozen and shall be binding on all stakeholders including FCs.
Application dismissed.
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2021 (12) TMI 1057 - NATIONAL COMPANY LAW TRIBUNAL , KOCHI BENCH
Interpretation of statute - section 17 of IBC - Confusion regarding section 17 among Corporate Debtors and practitioners - main allegation was that the Respondent/ Resolution Professional has failed to take over the affairs of the Corporate Debtor and to immediately take over custody and control of the assets without taking necessary steps to ascertain the financial position of the Corporate Debtor - HELD THAT:- A plain reading of the Section 18 of IBC makes it clear that the Code empowers the Resolution Professional to take control and custody of any property which the Corporate Debtor has complete ownership. This power of the Resolution Professional extends to properties that are part of the court proceedings. Section 20 mandates the IRP to preserve and protect the value of the property and to manage the operations of the corporate debtor as a going concern. But in this case, even though the RP is empowered to take possession of the Registered Office and records of the Corporate Debtor, he has taken only symbolic possession of the same and allowed the suspended Directors to enjoy for their benefits. This is against the provisions of the Code.
With the concept of Creditors in Control under IBC, after the initiation of the Corporate Insolvency Resolution Process (CIRP), the CoC assumes decision-making powers for the management of the CD. IRP/ RP is an independent professional to take care of the interests of all the stakeholders. Thus both IRP/RP and CoC have to work in tandem and the overall interest of resolution while balancing the interests of all stakeholders. But here there is a clash of interest among the member of CoC and the Resolution Professional. In its first meeting of the CoC, it appointed the Resolution Professional, who was then convening and conducting the meetings of the committee - On verification of records of this case, it is seen that only one meeting of Committee of Creditors took place with the presence of Resolution Professional, and without making any endeavour for inviting Expression of Interest, the CoC unanimously resolved to liquidate the Corporate Debtor.
In the interest of justice the time spent till now before the Adjudicating Authority from the 2nd CoC Meeting till the date of this order should be excluded from calculating the period under Section 12 (1), (2) &(3) of the IBC - Since, the Committee of Creditors is reconstituted with the Financial Creditor M/s Bajaj Finance Limited and the Operational Creditor is not having any voting right in the CoC, the main prayer to permit them to change the Resolution Professional and refer the case to Insolvency and Bankruptcy Board of India (IBBI) for proposing the name of a new RP cannot be entertained, since they have no locus standi to do so.
Application disposed off.
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2021 (12) TMI 1056 - NATIONAL COMPANY LAW TRIBUNAL , KOCHI 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 - whether the provisions of Section 10A stand attracted to an application under Section 9 which was filed after 5th June 2020 (the date on which the provision came into force) in respect of a default which has occurred after 25 March 2020? - HELD THAT:- Under Section 9(1), the Operational Creditor may file an application before the Adjudicating Authority for initiating the Corporate Insolvency Resolution Process (“CIRP”), after the expiry of a period of ten days from the date of delivery of the notice (or invoice demanding payment) under Sub-Section (1) of Section 8, if the operational creditor does not receive payment from the Corporate Debtor or a notice of the dispute under Sub-Section (2) of Section 8 - The proviso to Section 10A stipulates that "no application shall ever be filed" for the initiation of the CIRP of a corporate debtor "for the said default occurring during the said period". The explanation which has been inserted for the removal of doubts clarifies that Section 10A shall not apply to any default which has been committed under Sections 7, 9 and 10 before 25 March 2020.
It is clear that the Executive in the Promulgation of the Ordinance to meet an extraordinary situation and to avoid causing further stress to the already beleaguered businesses due to COVID pandemic throughout the world and also in addition affected by the lock down enforced by the State of the Union, all beyond their control have chosen to suspend the filing of any application in relation to defaults arising on or after 25.03.2020 - the Corporate Debtor received the products in various lots on 21.03.2020 and 23.03.2020 and also on 30.05.2020, where the part payments were made on 28.05.2020 and 28.07.2020 into the bank account of the Operational Creditor against the total amount due. Therefore, the date of default cannot be considered as 21.03.2020, as it is only the date of order but from the date 28.07.2020, the Corporate Debtor failed to pay the balance amount.
The records produced as evidence to prove the outstanding dues categorically show the default date as 28.07.2020 and not 21.03.2020 - the applicant purposefully sought amendment of the date of default in this application to fall outside the preview of Section 10A of the Code, by hood winking this Tribunal in order to substantiate the efforts of the Operational Creditor and to recover their legitimate dues.
It is clearly established that an attempt is being made to deliberately misuse the provisions of Insolvency & Bankruptcy Code defeating the very intent for which it was enacted - the application filed by the Operational Creditor stands rejected under Section 60 (5) of Insolvency & Bankruptcy Code, 2016 - Application dismissed.
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2021 (12) TMI 1055 - NATIONAL COMPANY LAW TRIBUNAL , KOCHI BENCH
Scope of Liquidation estate - appellant were workmen/ employees of Excel Glasses Limited under Section 42 of Insolvency & Bankruptcy Code, 2016 - HELD THAT:- On verification of records it is found that the submission of the Respondent that he has not been provided with any order from the appropriate authority in connection with payment of gratuity etc. Since the Appellants have not produced any order of the Labour Court or such authorities the Liquidator on his own cannot decide on disputed liability of them. He can only act on the strength of crystalized claims.
It is the settled position of law that the provident fund, the pension fund and the gratuity fund, do not come within the purview of ‘liquidation estate’ for the purpose of distribution of assets under Section 53 of the Code. Based on this, the only inference which can be drawn is that Pension Fund, Gratuity Fund and Provident Fund can’t be utilised, attached or distributed by the liquidator, to satisfy the claims. Section 36(2) of the I&B Code 2016 provides that the Liquidator shall hold the Liquidation Estate in fiduciary for the benefit of all the Creditors. The Liquidator has no domain to deal with any property of the Corporate Debtor, which is not the part of the Liquidation Estate.
The claim of wages cannot be sanctioned unless the statutorily constituted forums either under the Industrial Dispute Act, Payment of Wages Act and Bonus Act have rendered its decision. However, no such decision or award is available in favour of the workmen entitling them to claim these amounts - Appeal dismissed.
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2021 (12) TMI 1054 - NATIONAL COMPANY LAW TRIBUNAL — CHENNAI BENCH—I
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - minimum threshold limit for filing an application under sections 7, 9 and 10 of the IBC, 2016 - HELD THAT:- In proceedings before the Tribunal, when a liberty is being granted to a person, it goes without saying that the said liberty can be availed only if it is in consonance within the procedure established under the law for the time being in force. It is to be noted that as on the date when the liberty was granted to the operational creditor, the minimum threshold limit for filing an application under sections 7, 9 and 10 of the IBC, 2016 was ₹ 1 lakh. However, the Central Government through the Ministry of Corporate Affairs vide Notification No. S. O. 1205(E), dated March 24, 2020 has increased the minimum threshold limited from ₹ 1 lakh to ₹ 1 crore. Hence, on and from March 24, 2020 all the applications filed under sections 7, 9 and 10 of the IBC, 2016 before this Tribunal are required to satisfy the said condition and the debt amount due as claimed in Part-IV of the application is required to cross the threshold limit of ₹ 1 crore.
A liberty granted by this Tribunal, cannot act in derogation or in violation of the law which is prevailing time being in force - a liberty being granted to the operational creditor to file a fresh application in case a default occurs cannot be stretched to such an extent that would circumvent the law which is prevailing as on date.
It is now trite, that the Notification issued by the Central Government vide S. O. No. 1205(E), dated March 24, 2020 by increasing the pecuniary jurisdiction of this Tribunal from ₹ 1 lakh to ₹ 1 crore would operate prospectively, that is to say the said notification would be applicable to the matters which are filed before this Tribunal on and from March 24, 2020 - the application filed by the operational creditor before this Tribunal falls well short of the pecuniary limit of ₹ 1 crore and as a consequence thereof, the application is liable to be dismissed.
Application dismissed.
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2021 (12) TMI 1018 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Time Limitation - Adjudicating Authority rejected the submission of acknowledgment observing that Appellant has not placed any law before it that amount mentioned in the Balance Sheet comes under the definition of acknowledgment of debt under Section 18 of the Limitation Act, 1963 - HELD THAT:- The Balance Sheet for the Financial Year 2016-17 having been signed on 01.09.2017 and the above Application having been filed on 20.03.2020, it is well within three years’ period from acknowledgment of debt as claimed by the Appellant. It is now well settled that acknowledgment in the Balance Sheet is sufficient acknowledgment under Section 18 of the Limitation Act, 1963.
In recent judgment of the Hon’ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [2021 (8) TMI 315 - SUPREME COURT], after referring to the judgment of ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED VERSUS BISHAL JAISWAL & ANR. [2021 (4) TMI 753 - SUPREME COURT], the Hon’ble Supreme Court again reiterated that Section 18 of the Limitation Act, 1963 is fully applicable to proceedings under ‘I&B Code’ and entries in books of accounts and/ or balance sheets of a Corporate Debtor would amount to an acknowledgment under Section 18 of the Limitation Act.
The Adjudicating Authority having not examined the balance sheet for Financial Year 2016-17 ending on 31.03.2017. In the interest of justice, the Adjudicating Authority has to examine the balance sheet to find out as to whether it contain acknowledgment within the meaning of Section 18 of the Limitation Act or not.
Second ground given by the Adjudicating Authority for rejecting the Application i.e. that there is no document to show that any interest has ever been paid to the Petitioner by the Corporate Debtor in lieu of the amount, hence, Appellant is not covered in the definition of ‘Financial Creditor’ - HELD THAT:- The definition begins with the expression ‘financial debt’ means a debt alongwith interest, if any. Thus a financial debt may be with interest, if any. The definition, thus, clearly contemplates that debt along with interest is not mandatory to be there it to be a financial debt. Interest will be a part of the debt only if there is interest in the transaction. Words ‘if any’ after the word interest clearly indicates that it is not mandatory that debt should be alongwith interest in all cases - the consideration of the balance sheet for Financial Year 2016-17 may also be relevant for determining as to whether there was a financial debt or not. Thus, by taking into consideration the Balance Sheet, the Adjudicating Authority can re-consider the question of Applicant being Financial Creditor or not.
Matter remanded to the Adjudicating Authority for fresh consideration of the Application under Section 7 after issuing fresh notice to the Corporate Debtor and after giving opportunity to the Corporate Debtor also - appeal allowed by way of remand.
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2021 (12) TMI 1017 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - dishonor of cheque which was issued in discharge of the liability - existence of debt and dispute or not - HELD THAT:- It is seen from the petition that the Corporate Debtor has admitted its liability towards Financial Creditor as it has issued the cheques in discharge of its liability and those cheques were dishonoured which clearly shows that there is default in payment. The evidence placed by the financial creditor is sufficient to establish the existence of debt as well as default in payment on the part of the Corporate Debtor.
The Hon'ble Apex Court has clearly stated in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] that the moment it is established that there is a default in payment of financial debt by the corporate debtor, which is due and payable and the application is complete and no disciplinary proceedings is pending against the proposed RP then the adjudicating authority has no option but to admit the application.
The Financial Creditor has fulfilled all the requirements of law - this Adjudicating Authority is inclined to admit this application and initiate the process of CIRP of the Corporate Debtor - application admitted - moratorium declared.
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2021 (12) TMI 1016 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH
Seeking dissolution of the Corporate Debtor - Section 54 of the Insolvency and Bankruptcy Code, 2016 (for brevity 'Code') read with Regulation 14 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 - HELD THAT:- It is seen from the record that no assets are left with the Corporate Debtor and no other business operation is being carried. Hence, it is of no use to keep alive the Corporate Debtor as legal entity in existence.
For the purpose of pronouncement of Dissolution of the Corporate Debtor it is necessary to peruse Section 54 of the Code along with Regulation 14 of the Regulations.
The present Application is allowed as the dissolution is the last step to wind up the proceedings of the Corporate Debtor as per the provisions of law - decided in favor of applicant.
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2021 (12) TMI 966 - NATIONAL COMPANY LAW TRIBUNAL , CHANDIGARH BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- In the present case, the occurrence of default is evidenced by the copy of sanction letter dated 05.08.2009 and 25.08.2015 wherein the credit facilities were sanctioned to the corporate debtor on certain terms and conditions as imposed by the petitioner. The account of the corporate debtor was classified as NPA on 30.06.2017 and the Petitioner has issued a demand notice dated 24.09.2018 under Section 13(2) of SARFAESI Act, 2002 which is attached as Annexure A/11 of the petition. The copy of CIBIL and CICS report is attached as Annexure A/10 of the petition. The Petitioner has also approached Debt Recovery Tribunal for the recovery of ₹ 16,68,88,936.38 along with pendente lite and future interest and the same is pending for adjudication. The copy of the application filed in DRT-II is attached as Annexure A/9 of the petition.
Whether present application is filed within limitation? - HELD THAT:- In the present case, it is mentioned by the Petitioner that the corporate debtor has defaulted for the instalment of term loan on 01.04.2017. Further, it is settled proposition of law that as per Article 137 of the Limitation Act, the right to initiate action is three years from the date of default. Thus, its period of limitation of three years expired on 01.04.2020. However, the present application is filed on 26.07.2021 - Even if the date of default is taken as 01.04.2017, the present petition falls within limitation. Moreover, the application filed in the prescribed Form No.1 is found to be complete.
The present petition being complete and having established the default in payment of the Financial Debt for the default amount being above threshold limit, the petition is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code - Petition admitted.
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