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Insolvency and Bankruptcy - Case Laws
Showing 61 to 80 of 1699 Records
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2021 (12) TMI 965 - 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 of debt is evidenced by the copy of the agreement of term loan, General Power of Attorney, letter of undertaking cum declaration, common deed of hypothecation and sanction letter dated 06.01.2015. The corporate debtor has defaulted in making the regular payments of the credit facilities sanctioned by the petitioner and a demand notice under Section 13(2) of the Sarfeasi Act, 2002 recalling debt.
Whether the present application is filed within limitation? - HELD THAT:- The corporate debtor has acknowledged the debt for the cash credit as well as for the term loan on 05.12.2017 and the present petition has been filed for 15.01.2019. Therefore, the petition has been filed within the period of limitation.
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 the threshold limit, the petition is admitted in terms of Section 7(5) of the IBC.
Petition admitted - moratorium declared.
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2021 (12) TMI 964 - NATIONAL COMPANY LAW TRIBUNAL , CHANDIGARH 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 - whether the demand notice in Form No.3 was properly served? - HELD THAT:- The demand notice was sent by the post at the registered address of the Corporate Debtor. The original postal receipts are attached as Annexure A-14 of the petition. The tracking report which is attached as Annexure A-15 of the petition shows that the demand notice was duly served to the corporate debtor.
Whether the operational debt was disputed by the corporate debtor? - HELD THAT:- There is no such evidence placed on record by the corporate debtor that there is some pre-existing dispute regarding the revised rent with respect to the lease deed in his reply. Also the corporate debtor has not approached any legal forum for redressal of his grievance with respect to unpaid operational debt - there is a total unpaid operational debt (in default) of ₹ 3,28,01,724/- (including ₹ 74,52,807/- as interest @ 18% per annum). Based on documents on record, it is held that the demand notice in Form No.3 was properly delivered by the petitioner and no pre-existing dispute is proved.
It is noted that the corporate debtor has failed to make payment of the aforesaid amount due as mentioned in the statutory notice till date. Thus, the conditions under Section 9 of the Code stand satisfied. The petitioner states that from the facts, that it is clear that the liability of the corporate debtor is undisputed. Accordingly, the petitioner proved the debt and the default, which is more than ₹ 1 Crore by the respondent-corporate debtor.
In the present petition all the requirements have been satisfied. It is seen that the petition preferred by petitioner is complete in all respect. The material on record clearly goes to show that the respondent committed default in payment of the claimed operational debt even after demand made by the petitioner - petition admitted - moratorium declared.
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2021 (12) TMI 963 - 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 Agreement to Sell dated 17.01.2018 executed between the corporate debtor and the petitioner no.1 along with copy of receipts and Agreement to Sell dated 10.12.2014, executed with the petitioner No.2 and the same are attached as Annexure-I/4 and Annexure-I/7 respectively of the petition - The respondent-corporate debtor has also filed a reply wherein it has been stated that the default mentioned in the petition is due towards the petitioner for not providing of the possession of the plots/flat.
Whether present application is filed within limitation? - HELD THAT:- It can be seen from the records that corporate debtor had to deliver possession of the plots to petitioner no.1 on or before 16.04.2018. The petitioner no.1 has also got his presence marked before Sub- Registrar for the execution of sale deed - The petitioner no.2 has also issued various letters dated 09.12.2016, 16.05.2018 and 06.01.2020 for the construction of flat and assurance has been given to the petitioner no.2 that the possession of the completed flat will be given but Corporate Debtor failed to fulfil its commitment. Therefore, the present petition is filed within limitation.
Whether the present petition is maintainable? - HELD THAT:- The petitioner has filed a compliance affidavit vide a diary no. 00462/2 dated 16.11.2021 wherein it has been stated that total number of plots in the project of corporate debtor is 12 plots which is further divided into 36 flats. The petitioner no.1 is having two whole plots bearing no. HPE-PEA106 & HPEPEA105 and the petitioner no.2 is having a flat in the plot no. HPE-PEA103. Therefore, the requirement of having 10% of the allotment in the project is satisfied. 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 - moratorium declared.
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2021 (12) TMI 962 - NATIONAL COMPANY LAW TRIBUNAL , MUMBAI 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:- This Bench notes that on 18.07.2018 a Letter of Intent was entered into by Ebix Inc with Miles expressing its intention to acquire 100% shareholding of Miles. Around the same time, Ebix Inc entered into a discussion with Indus Software Technology Pvt Ltd (Indus) with the intention of Ebix Inc acquiring Indus to expand their operations in India. The Ebix Inc acquired Indus on 20.07.2018 and thereafter changed its name on 23.10.2018 from Indus to Ebix Technologies Pvt Ltd after appropriate filing and approval from the RoC. It is, therefore, clear to the Bench that for acquisition of Miles by Ebix Inc on 18.07.2018 was prior to and around the same time the acquisition of Ebix Inc of Indus on 20.07.2018. Therefore, this Bench is of the view that in the acquisition of Miles by Ebix Technologies Pvt Ltd, there was no contribution of Indus and, therefore, no role for Atlanta Global Advisors Private Ltd in the acquisition of Miles.
The Letter of Intent undertaken by Ebix Inc and shareholders of Mile was signed before acquisition of Indus by Ebix Inc. The Bench in this regard also notes that all negotiations with respect to acquisition of Miles were undertaken by Ebix Inc by its office in USA and not in any manner through Indus. Therefore, this Bench is of the view that the acquisition of Miles were undertaken not by Indus but independently by Ebix Inc. - The entire case of Atlanta is based on the Agreement dated 17.11.2016 with Indus to which Ebix Inc is not a party. Therefore, under no circumstance Atlanta has any cause of action or locus to seek any relief against Ebix Inc and its subsidiaries or its acquired Companies
This Bench also notes that demand notice was issued by the Petitioner in Form 3 on 03.04.2019. The Respondent, on 16.04.2019 had sent a detailed reply rejecting the claims after giving due reasons for the same - the Bench is of the view that there are very pertinent and real disputes regarding the claims etc, therefore, the Petition, in addition to other things, deserves dismissal under Section 9 of the IBC, 2016.
Petition dismissed.
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2021 (12) TMI 961 - 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 - HELD THAT:- The Respondent has given a lot of stress on not providing minimum cargo belly space to the Respondent for loading cargo and as a result of which the Appellant was supposed to accept the debit notes termination of the agreement by the Appellant was nothing but a coercion to the Respondent being a petty business unit and thereby wriggle out of the liability which the Appellant was supposed to bear in respect of various elements of expenditure. Repeated internal circular dated 13.02.2017 and 15.02.2017 by the Appellant on the issue of cargo load to its employees itself reflect that they were violating the terms of the agreement for minimum belly space to the Respondent. Different emails and meetings between the parties cited by the Respondent to prove that the Appellant’s claim is false or frivolous.
The financial condition of the Corporate Debtor is not healthy. CIRP was already initiated against it and the same has been closed by the Adjudicating Authority on 23rd September, 2021 after settlement with the ‘Union Bank of India’ who has entered into ‘OTS Agreement’ for release of payments in different instalments till 31.03.2023 and the Corporate Debtor has already paid two instalments in terms of the Settlement Agreement. The Resolution Professional (RP) associated with the CIRP also confirmed that the Original Applicant- Operational Creditor under the Code also recommended for withdrawal of Application - The Adjudicating Authority has drawn the inference of ‘pre-existence of dispute’ which cannot be ruled out. It is also very much clear that the Appellant is chasing for payments which is also not the purpose of the Code.
There are no infirmity in the impugned order - appeal dismissed.
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2021 (12) TMI 914 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Initiation of CIRP - Operational Creditors or not - listing fee and its arrears levied by the BSE - The learned Adjudicating Authority after considering the submissions of the parties and after referring to Report of the Insolvency Law Committee, rejected the Application under Section 9 holding that dues of ‘regulatory fee’ cannot be termed as an ‘operational debt’ - HELD THAT:- The Insolvency and Bankruptcy Code, 2016 was published in the Gazette of India on 28th May, 2016. After working the Insolvency and Bankruptcy Code, 2016, the law which consolidate and amend the laws related to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets and working of the Code was keenly watched by all stakeholders, the Government setup a Insolvency Law Committee, to make recommendations to the Government on issues arising from the implementation of the Insolvency and Bankruptcy Code, 2016 as well as on the recommendations received from various stakeholders. A Committee under the Chairmanship of Shri Injeti Srinivas examined the working of the Code and made recommendations proposing amendment to the Code.
With regard to Section 5 (8), i.e. ‘financial debt’, there was lot of debate and several stakeholders recommended to the Committee to make suitable amendment to protect the rights of home buyers - When the Insolvency Law Committee has categorically in the Report, as extracted above, held that ‘regulatory dues’ need not be included in the definition of ‘operational debt’, the said opinion of experts, cannot be brushed aside. The recommendations given by Insolvency Law Committee Report is in line with the object of the Code. In event, it is held that all kind of dues including ‘regulatory dues’, the insolvency resolution process can be triggered, then the entire purpose of the object of the IB Code will be lost and insolvency proceedings will turn into recovery proceedings for the dues of creditors, which is not the object of the IB Code.
The submission of the learned Counsel for the Appellant that there is no method for recovery of dues provided by the SEBI, cannot be accepted as SEBI is empowered to punish the defaulters for the recovery of regulatory dues. There are ample provisions for recovering under the SEBI Act and the circulars issued by the SEBI from time to time.
Adjudicating Authority did not commit any error in rejecting the Application under Section 9 filed by the Appellant - appeal dismissed.
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2021 (12) TMI 913 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking condonation of delay of 102 days in filing the instant Appeal - HELD THAT:- The Appellants had the knowledge of the impugned order passed by Ld. Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata in I.A. (IB) No. 601/KB/2020 in C.P. (IB) No. 1635/KB/2018 from the email dated 17.08.2020 sent by the Resolution Professional of Suraj Fabrics Industries Limited (Respondent) way back of 17.08.2020 (Annexure R/2 at page 10 of the Reply Affidavit filed by Respondent) and the instant Appeal has been filed on 03.08.2021 and no sufficient explanation for condonation of delay have been made out in the instant Appeal.
Application dismissed.
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2021 (12) TMI 912 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Approval of Resolution Plan - opportunity to revise the plan not provided - declination of possibility of any upward revision in Appellant’s offer - HELD THAT:- A perusal of the minutes clearly indicate that both the Resolution Applicants were given multiple opportunities to submit their revised Plans. The submission of the Appellant that he was not given opportunity to revise the Plan after receipt of 2nd Plan of Respondent No.3, is without any substance and against the record. The Plans of both the Resolution Applicants were deliberated by the CoC in several meetings and both the Resolution Applicants were requested to enhance the value of their Plans. Final Plans were received by the Resolution Professional from both the Resolution Applicants before 19.09.2020 and thereafter, it was put to vote. By 100% vote of CoC, the Plan of Respondent No.3 was accepted and Plan of Appellant was rejected.
The Adjudicating Authority in the impugned judgment has returned a finding that Resolution Plan approved by the Committee of Creditors is as per provisions of Section 30(2)(a) to 30(2) sub-section (e) and also complies the provisions of Regulation 38 and 39. The Resolution Plan dated 09.09.2020 along with all addendums dated 19.09.2020 as approved by the CoC, was rightly approved by the Adjudicating Authority by the impugned judgment.
Appeal dismissed.
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2021 (12) TMI 911 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Approval of Resolution Plan - voting share was not sufficient enough to get any plan approved - HELD THAT:- The object of CIRP is Resolution of the Corporate Debtor. 330 days including the extensions granted by the Adjudicating Authority was coming to an end on 09.03.2021. The Adjudicating Authority noticing that object of CIRP is Resolution of the Corporate Debtor had directed for consideration of all the four plans who have permitted to give revised plan - The matter has been pending before Adjudicating Authority after the last round of voting due to Applications filed by ‘Standard Chartered Bank’ and ‘Experion’ to exclude ‘Alchemist Asset Reconstruction Company Ltd.’ from voting. Liquidator also filed an Application No. 1367 of 2021 praying for liquidation in view of the fact that no Resolution Plan having received requisite number of votes which Application was deferred by the Adjudicating Authority by its order dated 01.10.2021.
The Adjudicating Authority on 01.10.2021 has directed for consideration of two plans which were pending. In subsequent order dated 25.11.2021, direction was passed for voting on two plans which received 64.64% votes. The above order was passed by the Adjudicating Authority since it was not posted with the fact that two Prospective Resolution Applicants namely- ‘Sattva’ and ‘M3M’ has withdrawn their Bid Bond Guarantee on 07.05.2021 and 09.07.2021, respectively - although there were four plans which came for consideration before the CoC but no one could achieve requisite number of votes i.e. 66% vote. In the CIRP of the Corporate Debtor, serious efforts were made for Resolution of Insolvency. 54 meetings of the CoC have been conducted so far but unfortunately no plan could receive requisite number of votes to get approval.
In the present case, although 330 days have elapsed but present is a case where as per direction of the Adjudicating Authority only re-voting has to be conducted to find out as to whether any Resolution Plan could get requisite number of votes failing which liquidation order is to be passed for which Application has already been submitted by the Resolution Professional which is pending consideration before the Adjudicating Authority and the Adjudicating Authority has deferred the consideration of liquidation Application only due to the fact that it had directed for fresh voting.
There are only two option available as on date, first to direct the Adjudicating Authority to take up the Application filed by the Resolution Professional for passing an order for liquidation and second to make a last effort to see as to whether any of the four plans could get the requisite number of votes i.e. 66% vote. The Resolution Process having gone such a long way, it should be brought to its logical end. We record out approval to the CoC decision dated 07.10.2021 to approach all the four Resolution Applicants. Much time having lapsed, we are of the view that before the Application filed by the Resolution Professional praying for liquidation is taken by the Adjudicating Authority, we may give one more opportunity to all the four Resolution Applicants to submit their revised plan and thereafter the CoC may deliberate and vote on all the four plans.
All four Resolution Applicants may submit their revised plan within 15 days from date of this order - The Resolution Applicants i.e. ‘Sattva’ and ‘M3M’ and any other who have withdrawn their BBG may submit their BBG along with revised plan, if they so intend, within a period of 15 days - Appeal disposed off.
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2021 (12) TMI 910 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Jurisdiction - rights of Adjudicating Authority to hear Objectors/ Interveners, before admission of the Application, while considering Application of pre-packaged insolvency under Section 54C of the ‘I&B Code’ - HELD THAT:- Section 54C (1) provides that where a Corporate Debtor meets the requirements of Section 54A, a corporate applicant may file an application with the Adjudicating Authority for initiating pre-packaged insolvency resolution process. The requirements having been provided under Section 54A, a Corporate Debtor has to meet them to enable to initiate the process. One of the relevant provisions in this regard is Section 54C (3) which mandates that the Corporate Debtor shall obtain an approval from its Financial Creditors, not being its related parties, representing not less than sixty-six percent. in value of the financial debt due to such creditors, for the filing of an Application. Regulation 14 under the heading “Initiation of Process” deals with the manner in which approvals by Financial Creditors have to be obtained.
The Scheme under Chapter III-A and the Regulations 2021 do not contain any express provision either prohibiting the Adjudicating Authority from hearing any of the objectors or interveners prior to the admission of pre-packaged insolvency resolution process application or providing for giving notice or hearing to the interveners or objectors. The objectors who had filed applications were all Homebuyers who have purchased one or more units in the Real Estate Projects of the Appellant - The legislative intent which is clear by Section 424 (1) is that the Tribunal while disposing of any proceeding before it shall not be bound by procedure laid down by Code of Civil Procedure but shall be guided by the principle of natural justice and subject to the other provisions of this Act or Code 2016 and any of the Rules made thereunder. Further, the Tribunal and the Appellate Tribunal shall have power to regulate their own procedure. The statutory scheme delineated by Chapter III-A of ‘I&B Code’ as well as the Regulations, 2021 as observed above does not indicate any prohibition on the Adjudicating Authority to hear any objector or intervener before admitting an Application of pre-packaged insolvency resolution process.
No error has been committed by the Adjudicating Authority in giving opportunity to the objectors to file their objections. The Appellant has also been given opportunity to file his rejoinder and reply to the objections, hence he cannot claim that any prejudice is cause to him only because objectors have been given time to file objection. The objectors who have appeared before the Adjudicating Authority have huge stakes since they are all homebuyers/ allottees and have paid substantial amount to the Appellant running in lakhs and crores.
No error has been committed by the Adjudicating Authority in granting time to objectors to file their objections within a week - Appeal dismissed.
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2021 (12) TMI 909 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH , NEW DELHI
Condonation of delay in filing appeal - there was 89 days delay in filing the Instant Appeal - Section 14 of the Limitation Act, 1963 - HELD THAT:- The Appellant had knowledge that the Appeal lies under Section 61 of the I& BC and further the Impugned Order was passed on 13.12.2019 and the Appellate Tribunal was open as per Calendar year 2019. So, they were having sufficient time to file this Appeal before this Tribunal and there is no merit in the I.A. No. 1590 of 2020.
The Appeal is dismissed without costs.
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2021 (12) TMI 908 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Tripartite agreement - financial creditors or not - whether the Appellant/M/s. Axis Bank can be considered as a ‘Financial Creditor’ on account of its having sanctioned and released housing loans to some of the allottees who have purchased Flats/units in the Project floated by the ‘Corporate Debtor’? - HELD THAT:- It is clear from the principle laid down by the Hon’ble Supreme Court in ‘Pioneer Urban Land & Infrastructure Ltd. & Anr.’ [2019 (8) TMI 532 - SUPREME COURT] that it is the Home Buyer who should be considered as ‘Financial Creditors’ of the ‘Corporate Debtor’ whether he has self financed his flat or has exercised his choice of taking a loan from the Bank - admittedly, as per Section 77 of the Companies Act, 2013 every security interest has to be registered with the Registrar within 30 days of its creation and admittedly no ‘charge’ has been created against any of the property of the ‘Corporate Debtor’ in favour of the Appellant.
A perusal of the documents shows that none of the Home Buyers appeared in any of the proceedings before the DRT whereby the recovery certificates were obtained - a mere ‘Permission to Mortgage’ is of no relevance in the absence of not having ‘registered a charge’ under Section 77 of the Companies Act, 2013.
It can be seen from the material on record that Axis Bank had rendered financial assistance for the purpose of booking units in the Project floated by the ‘Corporate Debtor’ and had a tie-up with the ‘Corporate Debtor’ for procuring business from the Home Allottees. The Home Loan Agreements in these cases were made individually by the Borrowers. As per standing instructions, the money in the account of the Home Allottees was disbursed automatically to the ‘Corporate Debtor’ - The Home Loan Agreement read with the Demand Letters and the Allotment Letter clearly specify that when there is a ‘default’ on behalf of the Home Allottee a penalty interest would have to be paid by the allottee to the Bank. Therefore, the ‘default’ aspect is to be seen vis-a-vis the Home Allottee and the Appellant Bank only. It is contended by the Respondent that though the Allotment Letter shows that the payments were construction linked, the Bank released the entire amount prior to completion of construction.
It is definitely not the scope and objective of the Code to include Banks/Financial Institutions which have advanced loans to Home Buyers to be considered as ‘Financial Creditors’ and included in the CoC, specifically in the light of the fact the liability to repay the Home Loan is on the individual Home Buyers. This would defeat the very spirit and objective of the Code aiming at Resolution and maximisation of the assets of the ‘Corporate Debtor’. Presence of a mere tri-partite Agreement does not change the character of the amount borrowed by the Home Buyer vis-a-vis the Bank and vis-a-vis the ‘Corporate Debtor’. Viewed from any angle, the Appellant cannot be included as a ‘Secured Financial Creditor’ in this case and hence, there are no reasons to interfere with the well-reasoned Order of the Adjudicating Authority.
This Appeal fails and is accordingly dismissed.
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2021 (12) TMI 907 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Right to apply under Section 9 of IBC - Regulatory Dues versus Operational Debt’ - failure to pay requisite Annual Listing fees (“ALF”) on or before the 30th day of April, every year. - Period of limitation - it is apparent that the Respondent’s continuous default is not merely restricted to the initial date of default but on every subsequent occasion when the Respondent was obliged to make payments but failed to pat ALF - HELD THAT:- Ld. Adjudicating Authority has rightly come to the conclusion that the agreement so filed cannot be relied upon, as the same is not a valid agreement in the eye of law, so Learned Counsel for the Appellant relied on an order passed by this Appellate Tribunal in B.S.E. LTD. VERSUS NEO CORP INTERNATIONAL LTD. [2019 (4) TMI 2032 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI] is not applicable in this matter.
Listing Fees comes under the ambit of ‘Regulatory dues’ which SEBI is entitled to recover. The Respondent being an entitly registered under SEBI, is under an obligation to follow the Regulations prescribed by SEBI for recovery of its dues. The dues so said are not ‘Operational Dues’ but ‘Regulatory Dues’. The Insolvency Law Committee suggests that Regulatory Dues are not to be recovered under ‘Operational Debt’.
Appeal dismissed.
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2021 (12) TMI 906 - 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 Operational Creditor has enclosed the copy of the Bank Statement indicating that the advance money had been paid in part, of which was adjusted against the goods received from the Corporate Debtor and for the remaining amount, the Corporate Debtor has failed to refund - This is a clear cut case, in which the Corporate Debtor should have either supplied goods or refunded the amount or at least replied to the notice under section 8 of the Act raising any pre-existing dispute if they had any but they have missed the golden opportunity by not replying to the notice under section 8 of the IBC.
The Operational Creditor has a good case. In this petition also the Corporate Debtor has not either appeared or opted to file any reply through its authorised representative. So on both these counts, the Corporate Debtor has failed to defend itself - there is no hesitation in accepting and admitting the petition and order initiation of CIRP against the Corporate Debtor in this matter.
Application admitted - moratorium declared.
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2021 (12) TMI 851 - ORISSA HIGH COURT
Renewal of trading licence in terms of the Orissa Minerals (Prevention of theft, Smuggling & Illegal Mining and Regulation of Possession, Storage, Trading and Transportation) Rules, 2007 - rejection of FACOR’s representation for waiving the demand raised against it by virtue of the Resolution Plan approved by the National Company Law Tribunal (NCLT), Cuttack Bench - HELD THAT:- The central issue being the alleged outstanding dues owed by FACOR to the Opposite Parties. It is not disputed by the State that the aforementioned demand pertains to the period prior to the ‘plan effective date’ of the ARP. As pointed out in the rejoinder affidavit, the ARP also talks about "government dues" which fall within the definition of 'operational debt’ as indicated in Section 5 (21) of the IBC - Section 31(1) of the IBC further makes it clear that once the ARP is in place, approved by the CoC, it shall be binding on the corporate debtor and its employees, members, creditors including the Central Government, any State Government “to whom a debt in respect of the payment of dues arising under any law for the time being in force, such as authorities to whom statutory dues are owed, guarantors and other stakeholders involved in the resolution plan.
The plea of the Opposite Parties that the State Authorities were unable to file their respective claims before the NCLT in the sum of ₹ 204,63,06,573/- since it has not finalized and in any event NCLT is not competent to decide the legality of the demands is untenable. Under Section 3(6) of the IBC a ‘claim’ inter alia includes “a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, weaken, equitable secured or unsecured”.
In terms of Section 31 of the IBC, the ARP is binding on all creditors including Central Government and the State Government. Since all of the impugned demands raised against FACOR pertain to the period prior to the Plan Effective date i.e. 31st January, 2020, all such demands stand automatically extinguished in terms of the ARP - the impugned demand raised against the Petitioner by the Opposite Parties are unsustainable in law.
Petition disposed off.
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2021 (12) TMI 849 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Refund of money paid for the allotment of a house - whether the IRP or the RP, as the case may be, is entitled to refund the money to any of the allottees during the CIRP period? - HELD THAT:- The CIRP of Jaypee Infratech Ltd. (Corporate Debtor) was going on when the Appellant submitted his request for refund. According to the provisions of IBC, the claim of the Appellant shall be settled in accordance with relevant provision in the approved Resolution Plan of the Corporate Debtor.
A perusal of the Impugned Order makes it clear that it was passed by the Adjudicating Authority during the currency of the CIRP and the prayer of Appellant for full refund, while the CIRP was going on, was declined - in view of the fact that now the Resolution Plan of the Jaypee Infratech Limited approved by the Committee of Creditors is pending approval of the Learned Adjudicating Authority, it is clear that the Impugned Order has lost relevance. The Appellant will be entitled to receive his rightful dues as contained in the Resolution Plan once it is approved by the Adjudicating Authority.
Appeal disposed off.
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2021 (12) TMI 793 - SUPREME COURT
Fresh consideration of resolution plan after a resolution approved by the CoC - Direction given by the NCLAT that Corporate Insolvency Resolution Process (CIRP) to be resumed from the stage of consideration of the Resolution Plans - HELD THAT:- The procedure adopted by the RP as well as the CoC was fair, transparent and equitable. The CoC was facing the timeline, which was to end on 24th February, 2020, before which it had to finalise its decision. In these circumstances, it cannot be said that the decision of the CoC, to not grant any further time to PPIPL for submission of its revised bid and to finalise the Resolution Plan on 12th February, 2020 itself, can be said to be falling in the category of the term ‘material irregularity’.
It could be seen that the CoC, after due deliberations, evaluated all the proposed Resolution Plans submitted by all the prospective Resolution Applicants and after giving sufficient opportunity to all the prospective Resolution Applicants, arrived at a considerate decision of accepting the Resolution Plan of the appellant-Ngaitlang Dhar in its meeting held on 1112th February, 2020.
It is trite law that ‘commercial wisdom’ of the CoC has been given paramount status without any judicial intervention, for ensuring completion of the processes within the timelines prescribed by the IBC. It has been consistently held that it is not open to the Adjudicating Authority (the NCLT) or the Appellate Authority (the NCLAT) to take into consideration any other factor other than the one specified in Section 30(2) or Section 61(3) of the IBC. It has been held that the opinion expressed by the CoC after due deliberations in the meetings through voting, as per voting shares, is the collective business decision and that the decision of the CoC’s ‘commercial wisdom’ is non-justiciable, except on limited grounds as are available for challenge under Section 30(2) or Section 61(3) of the IBC.
In the present case, leave apart, there being any ‘material irregularity’, there has been no ‘irregularity’ at all in the process adopted by the RP as well as the CoC. On the contrary, if the CoC would have permitted the PPIPL to participate in the process, despite it assuring the other three prospective Resolution Applicants in its meeting held on 1112th February, 2020, that the absentee prospective Resolution Applicant (PPIPL) would be excluded from participation, it could have been said to be an irregularity in the procedure followed.
The NCLAT has grossly erred in interfering with the decision of the CoC, which was duly approved by the NCLT - appeal allowed - decided in favor of appellant.
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2021 (12) TMI 742 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking initiation of Contempt proceedings against the Members of Committee of Creditor (CoC) and Resolution Professional (RP) - wilful and deliberate disobedience of the order - invocation of inherent powers under Rule 11 of NCLAT Rules, 2016 - HELD THAT:- As per Regulation 31 Insolvency Resolution Process costs under Section 5(13) (e) mean defined in clause (a) to (e). for the present case, Regulation 31 (b) is relevant which provides that amounts due to a person whose rightsare prejudicially affected on account of the moratorium imposed under Section 14(1) (d). Due to moratorium period the lessor could not recover the possession of the property from the Corporate Debtor. Thus, the right of lessor to recover rent are affected on account of moratorium. Therefore, the lessor is entitled to recover the rent and which shall include in CIRP costs - there are no substance in the argument that the rent cannot be included in the CIRP costs.
Whether the Respondents have wilfully disobeyed the order passed by this Appellate Tribunal on 31.01.2019? - HELD THAT:- In the present case, the CIRP commenced on 25.07.2019 when the Application under Section 9 was admitted and moratorium under Section 13(1) has declared. Subsequently, the RP has filed the Application for liquidation. The Ld. Adjudicating Authority vide order dated 14.06.2019 allowed the Application and liquidation of the Corporate Debtor was initiated and the assets of the Corporate Debtor were put for liquidation. Thus, as per the order dated 31.01.2019 the CoC is required to pay rent since 01.12.2018 till 13.06.2019 i.e. just before initiation of liquidation of the Corporate Debtor - It is true that the Adjudicating Authority vide order dated 14.06.2019 allowed the Application of RP and passed an order of liquidation of Corporate Debtor as no resolution plan has been received and 270 days are over. The Liquidation order is passed on 14.06.2019 this fact is again reiterated by the Adjudicating Authority in its order dated 11.06.2021.
As per the Applicant the current rate of two warehouses is ₹ 35,73,270/- including GST. As per the order of this Appellate Tribunal the Applicant is entitled rent 01.12.2018 up to moratorium period i.e. 13.06.2019 just before initiation of liquidation. It comes to ₹ 2,29,88,037 for 6 months 13 days. The Applicant has already received the amount of ₹ 3,02,11,464/- as shown in the Affidavit of the Respondent No. 2. Thus, the Applicant has already received the rent as per the order of this Appellate Tribunal.
The moratorium is ceased on 13.06.2019 and the Respondents have paid the rent as per the order of this Appellate Tribunal till order of moratorium - the Contempt Application is disposed of.
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2021 (12) TMI 741 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Initiation of CIRP - NCLT rejected the application of appellant u/s 9 - Period of limitation - 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 Ld. Adjudicating Authority has taken note of the fact that the Demand Notice issued under Section 8 of the IBC on 15.03.2019 which was sent through Registered post on 19.03.2019. However, the same was returned with a postal remark “addressee moved”. The Appellant has also issued Demand Notice through email on the same date demanding the arrears of the Annual Listing Fee. However, no dispute is raised by the Respondent.
The Ld. Adjudicating Authority have giving finding that debt failed due on 01.04.2015 as admitted by the Petitioner, hence the Application filed under Section 9 of the IBC barred by limitation.
The Ld. Adjudicating Authority has rightly come to the conclusion that the agreement so filed cannot be relied upon, as the same is not a valid agreement in the eye of law, so Learned Counsel for the Appellant relied on an order passed by this Appellate Tribunal in ‘B.S.E. Ltd. Vs. Neo Corp International Ltd. dated 05.04.2019’ (supra) is not applicable in this matter - Moreover, Listing Fees comes under the ambit of ‘Regulatory dues’ which SEBI is entitled to recover. The Respondent being an entitly registered under SEBI, is under an obligation to follow the Regulations prescribed by SEBI for recovery of its dues. The dues so said are not ‘Operational Dues’ but ‘Regulatory Dues’. The Insolvency Law Committee suggests that Regulatory Dues are not to be recovered under ‘Operational Debt’.
The appeal is dismissed.
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2021 (12) TMI 740 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Liability of transfer fee (as demanded by the West Bengal Industrial Development Corporation Limited.) - it is claimed that sale by Liquidator is involuntary on which no transfer fee is payable - HELD THAT:- The transfer fee in respect of transfer made by Liquidator of the lessee assets is liable to be paid and transferee cannot absolve himself from payment of liability to pay transfer fee.
An Application was filed by the Appellant to modify the order, praying that direction for payment of transfer fee by the Appellant should be modified. The said Application was specifically rejected by the Adjudicating Authority vide order dated 29th July, 2020. There being specific direction by the Adjudicating Authority for payment of transfer fee by the Appellant and the Appellant having not challenged those orders, cannot be heard in contending that he is not liable to pay transfer fee.
Auction of the Sale Assets was already completed on 11th June 2019 and thereafter the Applicant made a request and submitted the higher bid. In the letter quoted, there was specific submission “We promise to follow all the conditions of your Auction and we are also ready to pay the transfer charges to WBIDC”. The Appellant cannot be now allowed to go back from his statement that he will pay the transfer charges also.
Appeal dismissed - decided against appellant.
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