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Insolvency and Bankruptcy - Case Laws
Showing 81 to 100 of 1699 Records
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2021 (12) TMI 739 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Initiation of CIRP - NCLT admitted the application - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Share Application Money in the event of non-allotment of shares - Loan/Debt or not - Statutory accrual of interest under Section 42(6) of the Companies Act, 2013, to be construed as ‘consideration for time value of money’ or not - HELD THAT:- The Key Feature of a Financial Transaction as contemplated under Section 5(8) is ‘consideration for time value of money’. In other words, the legislature has included such financial transactions in the definition of ‘Financial Debt’ which are usually for sum of money received today to be paid over a period of time in a single or series of payments in the future. In Black’s Law Dictionary the expression ‘Time Value’ has been defined ‘as the price associated with the length of time that an investor must wait until an investment matures or the related income is earned’.
In the instant case, allotment of equity shares on preferential basis by Private Placement Offer was done and subsequently revoked. The allotment of shares is evident under Form PAS-5, Form PAS-4, the Board Resolution dated 01.08.2018, the Special Resolution dated 25.08.2018 and the Board Resolution dated 11.09.2018. Subsequently vide a Board Resolution dated 10.05.2019, the allotment made in favour of First Respondent was declared as invalid and void ab initio. Therefore, the money given by the First Respondent indeed falls within the definition of Share Application Money.
It is clear from the reading of Section 42 of the Companies Act, 2013 and the Deposit Rules that if the Shares are not allotted within 60 days of receiving the Share Application Money, and if the refund does not take place within 15 days form the expiry of 60 days time limit, then this amount will be treated as a ‘Deposit’, advanced to the Company, which has to be returned by the Company at the rate of 12 percent per annum from the expiry of the 60th day. Thus the concerned person would get compensation for the time value of money given by him to the Company which changes the nature and character of the money so given. Although the amount was initially paid towards Shares, since the allotment was revoked, the equity did not materialise. Thereafter, by operation of law, Section 42(6) of the Companies Act, 2013, the amount has statutorily been given the character of loan with interest. Same is the case of amounts paid as optionally convertible debentures - when under law, the amount has been treated as a loan, we hold that refund of Share Application Money, in the event of non-allotment of shares attracts interest as provided for under Section 42(6) of the Act and therefore qualifies the essential ingredients of Section 5(8) of the Code in terms of consideration paid for time value of money and therefore falls within definition of the ambit of ‘Financial Debt’ as defined under Section 5(8) of the Code.
Thus, Share Application Money in the event of non-allotment of shares, attracts interest under Section 42(6) of the Companies Act, 2013 and therefore falls within the ambit of definition of ‘Financial Debt’ as defined under Section 5(8) of the Code - appeal dismissed.
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2021 (12) TMI 738 - 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 dues or not - HELD THAT:- There is clear acknowledgement of debt by the corporate debtor in email dated 15.12.2018 annexed as Annexure-P9 (Colly) with the petition. It is also pertinent to take a note that the Notification regarding the enhancement of minimum amount of default to Rs. one crore for the purpose of Section 4 was issued by the Ministry of Corporate Affairs on 24th March, 2020 and the amount defaulted by the Corporate Debtor is much before the coming into effect of notification dated 24th March, 2020. Since any notification issued by the Government is generally prospective in nature unless specifically expressed, hence the said notification is not applicable to the present case.
This Tribunal is inclined to admit this application and accordingly initiate the process of CIRP of the Corporate Debtor - Application admitted - moratorium declared.
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2021 (12) TMI 683 - SUPREME COURT
Initiation of CIRP - pre-admission stage - home buyers and creditors - corporate debtor has initiated the process of settlement with the financial creditors - whether, in terms of the provisions of the IBC, the Adjudicating Authority can without applying its mind to the merits of the petition under Section 7, simply dismiss the petition on the basis that the corporate debtor has initiated the process of settlement with the financial creditors? - HELD THAT:- On a bare reading of the provision, it is clear that both, Clauses (a) and (b) of sub-Section (5) of Section 7, use the expression “it may, by order” while referring to the power of the Adjudicating Authority. In Clause (a) of sub-Section (5), the Adjudicating Authority may, by order, admit the application or in Clause (b) it may, by order, reject such an application. Thus, two courses of action are available to the Adjudicating Authority in a petition under Section 7. The Adjudicating Authority must either admit the application under Clause (a) of sub-Section (5) or it must reject the application under Clause (b) of sub-Section (5). The statute does not provide for the Adjudicating Authority to undertake any other action, but for the two choices available.
In Innoventive Industries [2017 (9) TMI 58 - SUPREME COURT], a two-judge Bench of this Court has explained the ambit of Section 7 of the IBC, and held that the Adjudicating Authority only has to determine whether a “default” has occurred, i.e., whether the “debt” (which may still be disputed) was due and remained unpaid. If the Adjudicating Authority is of the opinion that a “default” has occurred, it has to admit the application unless it is incomplete.
In the present case, the Adjudicating Authority noted that it had listed the petition for admission on diverse dates and had adjourned it, inter alia, to allow the parties to explore the possibility of a settlement. Evidently, no settlement was arrived at by all the original petitioners who had instituted the proceedings. The Adjudicating Authority noticed that joint consent terms dated 12 February 2020 had been filed before it. But it is common ground that these consent terms did not cover all the original petitioners who were before the Adjudicating Authority - the Adjudicating Authority did not entertain the petition on the ground that the procedure under the IBC is summary, and it cannot manage or decide upon each and every claim of the individual home buyers. The Adjudicating Authority also held that since the process of settlement was progressing “in all seriousness”, instead of examining all the individual claims, it would dispose of the petition by directing the respondent to settle all the remaining claims “seriously” within a definite time frame. The petition was accordingly disposed of by directing the respondent to settle the remaining claims no later than within three months, and that if any of the remaining original petitioners were aggrieved by the settlement process, they would be at liberty to approach the Adjudicating Authority again in accordance with law. The Adjudicating Authority’s decision was also upheld by the Appellate Authority, who supported its conclusions.
The order of the Adjudicating Authority, and the directions which eventually came to be issued, suffered from an abdication of jurisdiction. The Appellate Authority sought to make a distinction by observing that the directions of the Adjudicating Authority were at the ‘pre-admission stage’, and that the order was not of such a nature which was prejudicial to the rights and interest of the stakeholders - the Adjudicating Authority failed to exercise the jurisdiction which was entrusted to it. A clear case for the exercise of jurisdiction in appeal was thus made out, which the Appellate Authority then failed to exercise.
Appeal allowed - decided in favor of appellant.
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2021 (12) TMI 681 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH
Initiation of CIRP - NCLT admitted the application - Operational creditors - The pivotal plea taken on behalf of the Appellant is that the obligation of the ‘Corporate Debtor’ was to perform the export of goods and the liability arises when the ‘Contract’ was terminated on 30.04.2020 and when the ‘Corporate Debtor’ was directed to return the money. As such, the 1st Respondent cannot bring a default early to the date of 30.04.2020. - HELD THAT:- As seen from the I&B Code, 2016 an ‘Adjudicating Authority’ does not decide a suit/money claim and the ‘CIRP’ is not determined by the ‘Court’. In the initial stage, an ‘Adjudicating Authority’ is required to take appropriate steps for ‘Resolution’ of the ‘Corporate Debtor’ under ‘Insolvency’. No wonder, ‘Resolution Process’ is not a ‘Litigation’ by any stretch of imagination.
In the instant case, the application under Section 9 of the I&B Code (IBA/35/KOB/2020) was filed on 16.09.2020. The Section 8 Demand Notice to the ‘Corporate Debtor’ was sent by WhatsApp and email on 01.08.2020 and further that the said Notice, by way of caution was sent through speed post on 04.08.2020 which was received by the Corporate Debtor on 10.08.2020, as averred by the 1st Respondent/Operational Creditor in Part IV of its application at Sl.No.8 - ‘Corporate Debtor’ before the Adjudicating Authority had taken a stand that there was no ‘Contract’ or agreement between the parties in regard to the award of Interest at 18%, as claimed by the ‘Operational Creditor’ and that the object of I&B Code, 2016 is not a recovery of money and the frustration of contract, reasons for failure of export, inspection of goods on account of Covid lock down require detail rumination in fixing the liabilities of the Corporate Debtor. In short, according to the ‘‘Corporate Debtor’,’ there exists a ‘Dispute’ and the determination of ‘Default’ require and elaborate examination of facts and letting in of evidence to be adduced by the respective parties.
In regard to the facts of the present case on hand are even though the ‘Date of Default’ was on 03.01.2020, the application under Section 9 of I&B Code was filed by the ‘Operational Creditor/Applicant’ before the ‘Adjudicating Authority’ on 16.09.2020 wherein the ‘Operational Creditor’ had claimed a total amount of debt USD 1,13,500 payable by the ‘Corporate Debtor’ to it including interest at 18% per annum amounting to USD 13,500 as on 31.08.2020, in view of the fact that the contract was terminated on 30.04.2020, there being a dispute in regard to the contract for delivery of goods (in respect of supply of cashew kernels) between the parties, the threshold limit under Section 10A of the Code for initiation of CIRP is ₹ 1 Crore (vide Notification to Section 4 of the Code dated 24.03.2020, in the instant case, the ‘Default’ claimed from ‘‘Corporate Debtor’’ is USD 1,00,000 and ‘interest’ @ 18% per annum amounting to USD 13,500 and the interest being denied by the ‘‘Corporate Debtor’’ there being no contract for paying the interest between the parties) and this ‘Tribunal’ taking note of the fact that under the ‘Contract’ the amount was due and payable on 25.04.2020, comes to a consequent conclusion that as per provision of Section 10A, the application filed by the ‘Operational Creditor’/petitioner under Section 9 of the Code is not maintainable.
The ‘Adjudicating Authority’ will now close the ‘proceedings’ and is required to fix the ‘Fee’ of the ‘Interim Resolution Professional’ and that the ‘Corporate Debtor’ is required to pay the ‘Fees’ for the period the ‘Interim Resolution Professional’ had discharged his duties.
Appeal allowed.
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2021 (12) TMI 680 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Initiation of liquidation process of the corporate debtor - Section 33(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT:- In terms of the Regulation 6(1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the said Interim Resolution Professional made a public announcement in the Form-A, which was published in the newspapers namely, the "Business Standard" (English) in Delhi/NCR edition and "Business Standard" (Hindi) in Delhi/NCR edition on 30.10.2019. The said public announcement was uploaded on the website of the Insolvency and Bankruptcy Board of India (IBBI).
In the circumstances and there being no other alternative, this Bench is inclined to accept the Resolution of the COC and order Liquidation of the Corporate Debtor - Liquidation of the Corporate Debtor, M/s. Victory Infratech Private Limited is allowed in the manner as laid down in the Chapter III of Part II of the Insolvency and Bankruptcy Code, 2016 and in accordance with the relevant Rules and Regulations - application allowed.
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2021 (12) TMI 679 - NATIONAL COMPANY LAW TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Dissolution of the Corporate Debtor - Section 54 of the Insolvency and Bankruptcy Code, 2016, r/w Regulations 44 and 45 of IBBI (Liquidation Process) Regulations, 2016 - HELD THAT:- Since all the assets of the CD have been completely liquidated, this Authority in exercise of the powers conferred under Sub-section (2) of Section 54 of the I & B Code, 2016, hereby orders the dissolution of the Corporate Debtor, viz, M/s. MCCL PETROCHEM PRIVATE LIMITED from the date of this order, and the Corporate Debtor stands dissolved. Consequently, the Liquidator stands relieved.
The Liquidator and the Registry are directed to send the copy of this order within 7 days from the date of pronouncement to the RoC with which the Corporate Debtor is registered - Application disposed off.
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2021 (12) TMI 678 - NATIONAL COMPANY LAW TRIBUNAL , AMARAVATI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Non-performing assets - time limitation - HELD THAT:- For an Application under Section 7 of IBC, it is article 137 of the Limitation Act, which applies and hence the time begins to run from the date on which the Applicant/Corporate Debtor is declared as NPA. In that case 21.07.2011. It was held that since it is beyond three years, the Application under Section 7 of IBC would be time barred - In this case, since there is no denial of the fact that, the Corporate Debtor was declared as NPA on 30.06.2002, the time for the purpose of limitation, starts from the said date which long expires by the date of filing this Application i.e., 05.06.2020.
In order to prove that the debt due to the Financial Creditor is acknowledged by the Corporate Debtor, the Counsel draws the attention of this Tribunal to the Balance Sheet filed by the Corporate Debtor on 31.03.2020 wherein the debt due to the Financial Creditor is shown - contention of the Counsel is that since, the dispute is pending before the DRT, the same is shown as non-current liability and unless the DRT adjudicates the liability of the Petitioner it would not become a debt. This Tribunal finds good amount of force in the said argument. Apart from that, the amount shown is ₹ 62,05,337/- which is well below the pecuniary jurisdiction of the Tribunal, which is ₹ 1 Crore as on the date of fling the Petition.
The Company petition is filed beyond the period of limitation specified under Article 137 and cannot be entertained - petition dismissed.
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2021 (12) TMI 630 - 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 Appellant has filed the I.A. No. 2685 of 2020 seeking leave of this Appellate Tribunal to place on record certain additional documents, in para 3 it has been stated that the form of email correspondences ranging from 03.11.2017 till 11.01.2019 exchanged between the Appellant and the Respondent with respect to the settlement of the outstanding amount due and payable to the Appellant - The order dated 06.10.2020 dismissing the Application under Section 9 of the IBC by the Ld. Adjudicating Authority, the Appellant checked its internal records and it transpired that the aforesaid emails correspondences were available in its data-based. It is quite evident from the said emails correspondences that the Respondent was engaging in settlement discussions with the Appellant towards the outstanding dues owed to it which were otherwise agreed by the Respondent.
It transpires that the Respondent had admitted his liability and ready to make payments and revised settlement offer to the tune of USD 99,786.41/- was offered by the Respondent to the Appellant - the Application under Section 9 of the IBC filed by the Appellant before the Ld. Adjudicating Authority is hereby allowed.
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2021 (12) TMI 629 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Rejection of claim in respect of Corporate Guarantee - Corporate Guarantee was made available to the Respondent No.1 and also before the Adjudicating Authority or not - non-reflection of Corporate Guarantee in Books of Accounts - non-revocation of Corporate Guarantee and not crystalizing into debt in the Books of Corporate Debtor - reason for rejecting the claim of the Appellant by the Adjudicating Authority is that the Appellant has not produced the documents namely the Agreement evidencing the furnishing of the Corporate Guarantee issued by the Corporate Debtor in relation to the debt availed by M/s. Vasan Dental Health Pvt. Ltd.
HELD THAT:- The Appellant has provided all the information with the IRP/RP prior to rejection of claim. Further, after rejection of the claim the Appellant addressed a detailed reply to the objections raised by the IRP. It appears that the IRP has not considered the documents produced before it and without going into detail rejected the claim of the Appellant. Even the Adjudicating Authority merely affirmed the stand taken by the IRP/RP, without verifying the documents placed before it.
Whether the Corporate Guarantee was made available to the Respondent No.1 and before the Adjudicating Authority? - HELD THAT:- It is a fact that the Corporate Guarantee was shared with the 1st Respondent vide E-mail dated 22.01.2020 and the said Corporate Guarantee was also filed before the Adjudicating Authority along with convenience volume. Further it is also evident that before passing the rejection of the claim by the 1st Respondent vide order dated 06.02.2020 the Appellant submitted the Corporate Guarantee to the 1st Respondent therefore the 1st Respondent ought to have meticulously considered the Corporate Guarantee and other documents made available before him - the observation made by the Learned Adjudicating Authority that the Corporate Guarantee was not produced before it is without any basis.
Whether not reflecting Corporate Guarantee in the Books of Accounts invalidates the claim? - HELD THAT:- It is an admitted fact that the Corporate Guarantee having been executed cannot be denied and cannot unanimously decide by the 1st Respondent to the contrary and cannot be adjudicated upon - This Tribunal accepting the submissions as made by the Learned Counsel and this Tribunal is also of the view that the existence of Corporate Guarantee is not in question either by fact or in law. Therefore, the claim cannot be invalidated on the above ground.
Not invoking Corporate Guarantee and not crystalizing into debt, whether it invalidates the claim? - HELD THAT:- The Resolution Professional is required to maintain an updated list of all claims. The maturity of a claim or default of debt, are not the guiding factors to be noticed for collating or updating the claims.
This Tribunal comes to a resultant conclusion that the Corporate Guarantee was made available with IRP and Adjudicating Authority - Application disposed off.
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2021 (12) TMI 628 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Application was filed beyond three years from the date on which the Account was classified as ‘Non Performing Assets’ - demand made under Section 13(2) of SARFAESI Act, 2002 - time limitation - acknowledgment of liability - HELD THAT:- The object of Section 18(2) of the Limitation Act, 1963 is to ascertain the real date written and signed acknowledgment for the purpose of saving limitation and to exclude fraudulent testimony. Apart from that, unconditional acknowledgment is an implied promise to pay the debt, that is the logical inference, if nothing is uttered to the contrary, as opined by this Tribunal.
It is by now well settled that the pendency of the proceeding under SARFAESI Act, 2002 is not a bar in initiating ‘CIRP’ under I&B Code, 2016.
It is to be borne in mind that the Respondent/Financial Creditor/ Applicant had given a ‘Reply’ on 30.03.2016 for the proposed ‘One Time Settlement’ made by ‘Corporate Debtor’. Continuing further, it is to be remembered that the Respondent/Financial Creditor had addressed Reply letter to the ‘Corporate Debtor’ dated 19.02.2018 for ‘One Time Settlement’ of the loan amount which was accepted by the Respondent based on Terms and Conditions specified in the Sanction Letter dated 28.02.2018 - It cannot be gainsaid that the Respondent/Financial Creditor, after considering the proposal of the Appellant for ‘One Time Settlement’ through its letter dated 19.02.2018 granted said settlement in and by which the ‘Corporate Debtor’ was required to pay ₹ 2 Crores as against its liability of ₹ 17.12 Crores as on 01.12.2015. As such it is crystalline clear that the new contract had come into play on 19.02.2018 and further that the Application was filed by the Respondent/Applicant (under Section 7 of IBC) on 25.10.2018 which is within period of limitation.
The ‘OTS’ proposal of the ‘Corporate Debtor’’ dated 28.02.2018 was accepted by the authorised signatory of the ‘Corporate Debtor’ to the Terms and Conditions and it is brought to the fore that through a letter dated 07.06.2018 of the Respondent/Financial Creditor/Applicant addressed to the ‘Corporate Debtor’, the ‘OTS Letter’ was revoked because of the non-payment of settlement sum by the ‘‘Corporate Debtor’’ in spite of there being loss of time. Suffice to it, to the Tribunal to point out that in the present case, as per new contract, the ‘Corporate Debtor’, apart from the fact that it paid ₹ 1 crore, committed a default in regard to the upfront payment of sum of ₹ 9 Crores in response to the settlement of loan amount and in any event, in law, the new promise had given new cause of action enabling the Respondent/’Corporate Debtor’/Applicant to initiate CIRP under IBC resulting in filing of Application under Section 7 of IBC against the ‘Corporate Debtor’, which is well within period of limitation.
Appeal dismissed.
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2021 (12) TMI 528 - 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 - time limitation - Whether the relevant column in Section 7 Application having not been amended by Respondent No.1, other materials can be looked into for the purposes of finding an acknowledgement within the meaning of Section 18 of the Limitation Act? - HELD THAT:- The filing of an Application under Section 7 in Form-1 is procedural requirement. The requirement in procedural rule has not to read in a manner, which may preclude an affected party from bringing other materials on record to bring home his point. The procedure prescribed in the Rules are with an intent to capsule the relevant information in prescribed column. But that is not to shut out any other relevant information, if brought subsequently.
The Hon’ble Supreme Court in DENA BANK (NOW BANK OF BARODA) VERSUS C. SHIVAKUMAR REDDY AND ANR. [2021 (8) TMI 315 - SUPREME COURT] has laid down that IBC Rules and Regulations have to be construed liberally, in a purposive manner to further the objects of enactment.
Without amending the relevant column in Section 7 Application, a Financial Creditor can bring relevant materials on record before the Adjudicating Authority by way of supplementary affidavit, rejoinder affidavit and the additional affidavit, which materials can be looked into and non-amending of relevant column in Form-1 shall not preclude the admissibility of the materials brought subsequently by way of supplementary affidavit or additional affidavit.
Whether the balance sheet as on 31st March, 2017, which was filed along with supplementary affidavit before the NCLT, can only be looked into and balance sheets for the year 2015 and 2016 cannot be looked into? - HELD THAT:- The balance sheets as on 31st March, 2015 and 31st March, 2016, which have been filed along with the reply affidavit of Respondent No.1 before this Appellate Tribunal, can be looked into along with the balance sheet as on 31st March, 2017, which was already on record before the Adjudicating Authority.
Whether balance sheets for the years 2015, 2016, 2017 contain an unequivocal acknowledgement of debt by the Corporate Debtor, which is a sufficient acknowledgement within the meaning of Section 18 of the Limitation Act? - HELD THAT:- Upon a reasonable construction of the language used by the debtor in writing the relation of debtor and creditor must appear to be distinctly admitted, that it must be admitted also to be a subsisting jural relation, and then an intention to continue it until it is lawfully determined must also be evident.
The Application filed by Financial Creditor under Section 7 of the IBC mentions in detail of the Rupee Term Loans taken from the Bank and Financial Institutions. The details as mentioned in the financial statement clearly indicate that Rupee Term Loans were taken with regard to power project of units of 270 MW each aggregating to 540 MW and for security of which loan mortgage, charge of immovable properties of the Company for present and future as well as hypothecation of all movable properties of the Company including movable plant and machinery, spares, tools and accessories was made.
Balance sheets as on 31st March, 2015, 31st March, 2016 and 31st March, 2017 contain the acknowledgement within the meaning of the Section 18 of the Limitation Act and Respondent No.1 is entitled to claim that fresh period of limitation started after the acknowledgement. The date of default being 31st July, 2013 and balance sheet as on 31st March, 2015 having signed on 2nd September, 2015, the acknowledgement was made within expiry of three years’ period of limitation from 31st July, 2013. The acknowledgement continues in balance sheets as on 31st March, 2016 and 31st March, 2017. Hence, the Application under Section 7 of the IBC filed in 26th December 2018 is well within limitation and has rightly been admitted by the Adjudicating Authority.
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2021 (12) TMI 527 - 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:- As per Form V, Part IV, the Corporate Debtor is liable to pay an outstanding sum of ₹ 35,32,674/- for the period from 01.04.2015 to 31.12.2018. The date of default occurred on the last date of payment made by the Corporate Debtor on 21.07.2018 and the present application was filed on 28.01.2019, hence the debt is not time barred and the application is filed within the period of limitation - The Applicant has filed an affidavit under section 9(3)(b) dated 25.01.2019 affirming that no notice of dispute has been given by the corporate debtor relating to dispute of the unpaid operational debt - 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 - Moratorium declared.
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2021 (12) TMI 485 - 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 - pre-existing dispute between the Operational Creditor and the Corporate Debtor or not - HELD THAT:- There are material substances in the appeal and the appeal deserves to be allowed.
Matter remanded to the Adjudicating Authority to initiate CIRP against the Corporate Debtor after allowing a period of 30 days to the parties to settle the matter failing which to initiate CIRP against the corporate debtor - appeal allowed by way of remand.
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2021 (12) TMI 484 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH, NEW DELHI
CIRP proceedings - private sale of assets - failure to e-auction process for the composite assets of the Corporate Debtor was taken up by the liquidator. - HELD THAT:- It comes out from a reading of Section 35 of IBC and Regulation 8 of Liquidation Regulations is that the proviso that any such consultation shall not be binding on the liquidator is ostensibly so to enable the liquidator to perform its duties in a fair, impartial and judicious manner for realising the maximum value from the disposal of assets of the Corporate Debtor. In our opinion the views of the stakeholders regarding the sale of assets are both desirable and valuable, especially as they are the ultimate beneficiaries of the liquidation process and also because substantial period of time (over two years and seven months) has already been spent in the liquidation process without any fruitful results.
The specific context in which an auction is carried out can only elucidate the aspect of arbitrariness and favouritism or otherwise. Thus, in the present appeal where the Impugned Order challenging the stoppage of second Swiss Challenge Process and taking up a fresh private sale process has been challenged, it is seen that the decision of the stakeholders and the liquidator, upon which the Adjudicating Authority has based its order does not grant any particular party any favour. It is driven by the stakeholders’ wish to get the liquidation process concluded early without losing sight of maximization of value of assets. Also, even though this is a private sale as opposed to sale by a government authority, we are of the opinion that the standards and norms of transparency, fairness and responsibility should be adopted without any qualification or reservation and all prospective bidders should get sufficient notice and time to enable them to participate in the bidding in an effective manner. The process should be taken up after proper notice to prospective buyers and not limited to chosen few.
The impugned order directs the Liquidator to complete the entire private sale (relating to the assets contained in the WSRPL offer) within three weeks from the date of Adjudicating Authority’s order - it is directed that in partial modification of the impugned order, that while the second Swiss Challenge Process stands cancelled, the private sale process should be undertaken in accordance with the directions contained in the preceding paragraph of this judgment as per relevant legal provisions.
Appeal disposed off.
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2021 (12) TMI 434 - 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 - time limitation - HELD THAT:- The Ld. Adjudicating Authority has failed to appreciate that there is no promise to pay within the meaning of Section 25 (3) of the Indian Contract Act, 1872, which will be evident from the letter dated 14th December 2017.
On perusal of the impugned order, it is clear that the Adjudicating Authority relying on the judgement of the Hon'ble Bombay High Court in the case of South Eastern Roadways [1992 (11) TMI 293 - BOMBAY HIGH COURT], has considered the letter issued by Corporate Debtor dated 14th December 2017 as an acknowledgement of debt in the form of a promise to pay the debt amount and given a finding that the Application filed by the Operational Creditor is beyond the given period of limitation.
Section 25 of the Indian contract act provides that agreement without consideration is void unless it is in writing and registered or is a promise to compensate for something done or is a promise to pay a debt barred by limitation law - based on the statutory provision of Section 25(3) of the Contract Act, it is clear that there could be a valid contract to pay wholly or in part a time-barred debt. This can be treated as an exceptional general principle of the Contract Act, which provides that agreement without consideration is void. Illustration (e) of Section 25 of the Contract Act provides that "if A owes B ₹ 1,000, but the debt is barred by the Limitation Act. A signs a written promise to pay B ₹ 500 on account of the debt. This is a contract.
The learned Adjudicating Authority has taken an erroneous view of the matter and on evaluating the letter of the Managing Director of the Corporate Debtor as an acknowledgement of the debt - the said letter was not within limits so that the operational Creditor could claim the benefit of Section 18 of the Limitation Act.
Appeal allowed.
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2021 (12) TMI 433 - 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 is a bonafide claim of the Corporate Debtor that the Input Tax Credit paid must be assessed undisputedly. The Corporate Debtor had, in its letter received by the Operational Creditor on 22.07.2019, has admitted the debt and was ready to pay the due amount on providing the Bank guarantee till the assessment. Though the letter in respect to the dispute of ITC was received by the operational creditor after 10 days after the i.e. statutory period of reply to the demand notice as per section 8 of IB Code, the dispute seems to real and genuine. It is the bonafide right of the Corporate Debtor that the amount paid for GST must be assessed without any complication. The objection of the Operational Creditor in respect that no such agreement was made by and between the Operational Creditor and Corporate Debtor for giving the Bank guarantee for GST dispute is not well founded. Such a situation arose after Rathank Retails Private Limited was declared as a fictitious company. Such situation was not in picture since the inception of the business relations with the Operational Creditor.
The apprehension of the Corporate Debtor is genuine, as if the transactions of the Operational Creditor prove to be non-genuine, the Corporate Debtor would have bear to the additional GST along with interest and penalty - pre-existing dispute under section 8 (2) (a) of Ib Code fully established. The petition of the Operational Creditor for initiation of CIRP under section 9 of IB Code is rejected.
Petition dismissed.
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2021 (12) TMI 385 - 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:- From the perusal of the Reply Affidavit filed by the Respondent/ Resolution Professional shows that the Appellant herein have not taken the plea of Section 14(2) of the IBC before the Ld. Adjudicating Authority which he has taken valid service which was rendered by the Appellant fall within the definition of essential services.
There is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order therefore, we do not need to interfere in the impugned order - Appeal dismissed.
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2021 (12) TMI 384 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Prayer to recall of the judgment and order passed by this Appellate Tribunal - section 424(1) of the Companies Act, 2013, as amended, read with Rule 11 of the National Company Law Appellate Tribunal Rules, 2016 - HELD THAT:- Neither Section 242 (1) of the Companies Act, 2013 nor Rule 11 of the NCLAT Rules, 2016 gives power to this Appellate Tribunal to recall the judgment passed by this Appellate Tribunal, after the judgment dated 08.12.2020 was questioned before the Hon’ble supreme Court in Appeal and the Appeal was dismissed by the Hon’ble Supreme Court.
The power to recall the judgment is not permitted in IBC - application dismissed.
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2021 (12) TMI 360 - NATIONAL COMPANY LAW TRIBUNAL , NEW DELHI BENCH
Presumption of Security Interest - Adjudication of cost, pendente lite and future interest and Penal Interest over the documented rate in respect of its Credit Facility together with interest, further interest, Liquidated Damages and other charges at the contractual rates on the footing of the compound interest till payment and/or realization in full - permission to sale of Agricultural Land - hand over physical possession of the Agricultural Land - permission to sell/realize the above-mentioned Mortgaged Property - contention raised by the Applicant is that as there is no claim received from the workmen and as per the Regulation 21A of the Liquidation Regulations - HELD THAT:- On conjoint reading of Regulation 21A (2) and the Regulation 4 (2) (b) Clarification of the Liquidation Regulations, it is evident that when a secured creditor realizes its security interest, it shall pay the liquidation costs which includes the liquidator's fees. Further, in the case where a liquidator distributes any amount, which is not realised by him, he shall be entitled to a fee corresponding to the amount distributed by him.
As to the facts of the present case, it is seen that the Respondent has no objection in allowing the application subject to compliances of Liquidation Regulations.
Petition disposed off.
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2021 (12) TMI 359 - 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:- Even if specific permission has not been sought to re-file the proceedings on the cause of action having arisen in favour of the operational creditor, once the corporate debtor has failed to comply with the terms and conditions fixed in the settlement agreement, the right of the operational creditor still subsists and he has all the rights to file this petition for enforcing the settlement agreement dated October 11, 2018 having been entered into by the parties and admitted before this Adjudicating Authority.
It is no doubt true that the settlement agreement dated October 11, 2018 has indeed been a clever handiwork of a draftsman, especially designed to take the operational creditor in its fold and avoid the imminent court orders against the corporate debtor, without even paying a penny after the settlement - the operational creditor has satisfied this Adjudicating Authority on all the issues raised in opposition by the corporate debtor. The failure of the corporate debtor to comply with the terms settled between the parties is a proved default on its part and its failure to pay the instalments, the right to sue rightly accrued in favour of the operational creditor. The agreed debt forming part of the settlement agreement dated October 11, 2018 is an admitted operational debt which had to be paid off within the stipulated time but since the corporate debtor has failed to perform its obligation under the aforesaid agreement, it is certainly a default which calls for an immediate action by this Adjudicating Authority.
The application filed by the operational creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency resolution process against the corporate debtor, BST Infratech Ltd., is hereby admitted - application admitted - moratorium declared.
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