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Insolvency and Bankruptcy - Case Laws
Showing 1 to 20 of 733 Records
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2023 (12) TMI 1309 - SC ORDER
Taking possession of the demise premises in view of Section 14(1)(d) of I&B Code - it was held by NCLAT that 'Since the demised premises ceased to be the property of the Corporate Debtor much prior to the initiation of CIRP, therefore, it cannot be covered under Section 14 much less 14(1)(d) of the Code' - HELD THAT:- There are no reason to interfere with the order of the National Company Law Appellate Tribunal since no substantial question of law is involved in the appeal.
Appeal dismissed.
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2023 (12) TMI 1255 - SUPREME COURT
Qualification of Resolution Applicant - Promotor of the company - Application for Resolution Plan dismissed on the ground that the promoters could not have presented the plan - ineligibility to continue as a Resolution Professional - ineligibility to be considered as Board is liquidator of the corporate debtor - whether the appellant had erred in putting up a plan that was not in consonance with law for consideration of the adjudicating authority?
HELD THAT:- As per the factual scenario on record, there is no per say disqualification under Section 29A - it is pointed out that the plea based on Section 240A needs the opinion of this Court as there are a number of such cases arising and the orders earlier passed are being followed.
The common submission thus, is that while interpreting Section 240A, the reason for carving out an exception in micro, small and medium industries is set out on the date of application for making the bid as the crucial date. The submission is that while for some other aspects the initiation of the CIRP proceedings would be the cut off date, the same would not apply in the case of Section 240A, in view of the statement by the Minister themselves while introducing the amendment Bill.
The statement of the Minister is looked into for purposes of a cut off date that “there is no other specific provision providing for cut off date” which submits that it should be the date of application of making a bid. Thus, to opine that it is the initiation of the CIRP proceedings which is the relevant date, cannot be said to reflect the correct legal view and thus, it is constrained to observe that the law laid down in DIGAMBAR ANANDRAO PINGLE VERSUS SHRIKANT MADANLAL ZAWAR, SHRIKANT MADANLAL ZAWAR, VANDANA GARG LIQUIDATOR M/S PINGLE BUILDERS PVT. LTD., STATE BANK OF INDIA, VIJAYA BANK, M/S SOORAJMULL BAIJNATH PVT. LTD. [2021 (7) TMI 456 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI] case by the Tribunal is not the correct position in law and the cut off date will be the date of submission of resolution plan - Thus, even on this count, the plan submitted in question will not incur the disqualification.
The petition before the Adjudicating Authority would stand restored to National Company Law Tribunal for reconsideration
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2023 (12) TMI 1249 - SUPREME COURT
Condonation of delay in filing an appeal before NCLAT - whether the appeal was instituted within limitation? - Maintainability of application under Section 7 of the IBC - HELD THAT:- On the facts of the case, the Court noted that the appeal was barred by limitation as the appellant did not even attempt to secure a certified copy and only relied on the date of uploading the order on the website. Significantly, in the case, there was a pronouncement on the date mentioned on the order and the appellant did not dispute his presence before the NCLT when the order was pronounced in open court.
The date on which the limitation begins to run is intrinsically linked to the date of pronouncement. The question that arises in the facts of the present case, therefore, is when is an order deemed to be pronounced. The National Company Law Tribunal Rules, 2016 [NCLT Rules] provide guidance in this regard. Rule 89(1) of the NCLT Rules indicates that when NCLAT registry publishes its cause list, a distinction is drawn between cases listed for pronouncement of orders and other cases.
In the present case, the cause list for 17 May 2023 placed on record by the appellant indicates that the case was listed for admission and not for pronouncement. Further, on a specific query of the Court, it is not in dispute between counsel for the appellant and the respondent, that no substantive order was passed on 17 May 2023 by the NCLT. In these circumstances, limitation would not begin to run on 17 May 2023 which was the date on which hearings concluded. As no order was passed before 30 May 2023, there was no occasion for the appellant to lodge an application for a certified copy on 17 May 2023. Time for filing an appeal would commence only when the order appealed from was uploaded since prior to that date no order was pronounced.
The period of limitation began to run on 30 May 2023. The 30- day limitation period provided in Section 61(2) of the IBC concluded on 29 June 2023. Though the appeal was filed beyond the period of thirty days, it was within the condonable period of fifteen days - the appeal should be restored to the NCLAT for reconsidering whether the appellant has shown sufficient cause for condoning the delay beyond thirty days.
Appeal disposed off.
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2023 (12) TMI 1248 - SC ORDER
Maintainability of section 9 application - HELD THAT:- The present appeal is dismissed - It is clarified that the impugned judgment and the dismissal of the present appeal will not be construed as an expression of opinion on whether the petition under Section 9 of the IBC is within time.
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2023 (12) TMI 1247 - SC ORDER
Submission of claim before COC - HELD THAT:- The pleas and contentions of Kamal Kant Dewan and Bharat Food and Agro Products, as well as the contentions of White Water Hospitality Private Limited, will be examined by the adjudicating authority.
The impugned judgment set aside - appeal allowed.
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2023 (12) TMI 1246 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB
Dismissal of Section 9 application - pre-existing dispute - HELD THAT:- The email sent by the Corporate Debtor indicate the entire issue raised between the parties, where the Corporate Debtor denied any outstanding amount. Further, the receipt which was claimed by the Corporate Debtor was the receipt of the diamonds received on behalf of the Appellant, which were all before the date when Demand Notice was issued. This indicate that at the time when Demand Notice was issued, there were dispute between the parties.
The Adjudicating Authority has rightly rejected the Section 9 application there being a pre-existing dispute - Appeal dismissed.
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2023 (12) TMI 1245 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking condonation of delay of 15 days in filing of the appeal - existence of sufficient reasons for delay or not - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time. However, in the additional affidavit, the Appellant has mentioned that it had to obtain several documents which could not be procured in time. However, it is not denied that the appeal was filed on 17.04.2023 and then an application was filed on 08.11.2023 for placing on record the additional documents.
The Hon’ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli [2021 (9) TMI 1156 - SUPREME COURT] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period. In view of the aforesaid facts and circumstances, there are no merit in the application and the same is hereby dismissed - The application for seeking condonation of delay in re-filing has become infructuous and the same is hereby dismissed.
Condonation of delay of 15 days in filing the appeal and for condonation of delay of 162 in refiling the appeal - HELD THAT:- In the present case, the appeal has been filed on the last date i.e. 15th day i.e. 45th day. The reason given in para 3 of the application for condonation of delay appears to be a halfhearted attempt on the part of the Appellant for condonation the delay of 15 days because it is mentioned therein that the appellant took time for procuring relevant documents and as such the counsel for the Appellant could not receive instructions on time - the Hon’ble Supreme Court in the case of National Spot Exchange Limited Vs. Anil Kohli, [2021 (9) TMI 1156 - SUPREME COURT] held that the delay beyond the period of 15 days cannot be condoned by the Tribunal and even under Article 142 of the Constitution of India which makes the provision very stringent and lays responsibility on the Appellant to be vigilant enough to file the appeal within the prescribed period - there are no merit in the application and the same is hereby dismissed.
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2023 (12) TMI 1219 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
CIRP - Validity of order of liquidation - Rejection of resolution plan - eligibility criteria - Resolution Plan not considered by the Committee of Creditors (CoC) - bank guarantee furnished with delay of 3 days as the last date of submission of bank guarantee was 1st March 2021 - submission of bank guarantee of ICICI bank as against the bank guarantee which should have been issued from nationalised bank located in India - ineligibility u/s 29 A of IBC.
HELD THAT:- This Appellate Tribunal is of considered opinion that terms and conditions as stipulated in RFRP are required to be treated valid and legal binding terms and conditions which has been stipulated by the CoC after fair deal of deliberations. The framing of such terms and conditions, evaluation of the Resolution Plan against such matrix is considered to be entirely within the commercial wisdom domain of the CoC.
After analysing the facts in the appeal in details in provisions paragraphs, it is held that the Appellant failed to comply with the conditions as stipulated in RFRP - there are no reason to interfere with the Impugned Order dated 02.02.2023 passed by the Adjudicating Authority since, there are no error in the Impugned Order.
Appeal dismissed.
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2023 (12) TMI 1218 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB
Approval of Resolution Plan - Appellant are personal guarantors of the Corporate Debtor - HELD THAT:- The Resolution Plan does not absolve the personal guarantors from their guarantee. The law well settled by the Hon’ble Supreme Court in the matter of LALIT KUMAR JAIN VERSUS UNION OF INDIA AND ORS. [2021 (5) TMI 743 - SUPREME COURT], that by approval of resolution plan the guarantees are not ipso facto discharged. The resolution applicant has taken liability of only one crore, the other liabilities of the personal guarantors are not discharged.
There are no ground to interfere with the approval resolution plan within meaning of Section 61 - the order of the Adjudicating Authority approving the Resolution Plan need not be interfered - there is no merit in the Appeal - appeal dismissed.
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2023 (12) TMI 1217 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Maintainability of section 7 application - time limitation - dispute raised regarding the liability of the Corporate Debtor towards the Financial Creditors and the guarantee by the Respondent - HELD THAT:- This is one such case in which direction has to be issued to the Tribunal to admit the application filed under Section 7 of the Code in view of the findings recorded by the Tribunal in its order dated 25.03.2022 wherein it has been held that the debt and default both are present in this case but the Tribunal did not admit the application only on the issue that the Application was found to be barred by limitation. The question of limitation was taken to the higher court and ultimately it has been proved that the application was within the limitation. In such circumstances, the Tribunal should not have gone in for further investigating on the issue as to whether there is debt and default in the present case for the purpose of admission of the application.
The Tribunal is directed to admit the application filed by the Appellant on the next date of hearing and pass further necessary orders in accordance with law - Appeal allowed.
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2023 (12) TMI 1176 - SC ORDER
Maintainability of section 7 application - nearly two years have gone by in the interregnum - HELD THAT:- After the application under Section 7 is heard and disposed of on merits, should it become necessary to do so, the parties would be at liberty to take recourse to all appropriate proceedings in accordance with law. At that stage, should it become so necessary, this Court will enquire into both the merits and maintainability. However, we also clarify that the issue of maintainability shall stand concluded by the impugned order dated 17 November 2023 insofar as the National Company Law Tribunal “NCLT” and NCLAT is concerned.
Since the application under Section 7 is pending for over two years, the NCLT is requested to take up the application at the earliest possible date and to endeavour an expeditious disposal within two months.
Appeal dismissed.
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2023 (12) TMI 1175 - SC ORDER
Deed of Compromise/settlement dated 04.10.2023 entered into by respondent no. 1 – Rustagi Projects Pvt. Ltd. and the appellant – Anuj Sharma, is taken on record - Parties will be bound by the terms and conditios mentioned in the Deed of Compromise/settlement dated 04.10.2023.
However, the appellant – Anuj Sharma/respondent no. 1 – Rustagi Projects Pvt. Ltd. shall pay the Corporate Insolvency Resolution Process (CIRP) costs, as may be determined by the National Company Law Tribunal. In the event the costs are not paid, it will be open to the adjudicating authority/NCLT to take appropriate steps for recovery of the amount in accordance with law.
Appeal allowed in part.
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2023 (12) TMI 1174 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Liquidation Order - whether issuance of Form-G decision cannot be taken by CoC to liquidate the Corporate Debtor? - HELD THAT:- On looking into the resolution passed by the Committee of Creditors, CoC has given reasons as to that there are no employees, no business, no registered office, no filing of annual account of the MCA since 31.03.2011, no returns and no transactions since 2017. The scheme of the IBC as delineated by Section 33 sub section 2 empower of Committee of Creditors to take a decision to liquidate after constitution of Committee of Creditors.
It is true that the decisions of the CoC to liquidate has to be with reasons and that cannot be arbitrarily done but in the present case when looked into the resolution of the CoC it is clear that there was objective consideration by the CoC for taking a decision to liquidate.
Since SLP having been dismissed and review having also dismissed on the said submission the hearing of the appeal cannot be adjourned. It goes without saying that any order passed by Hon’ble Supreme court is binding by this tribunal and Adjudicating Authority, in event any such order is passed in the Curative Petition - in view of the order which we are passing in this appeal the subsequent application has become infractuous and has to be closed.
The order passed by Adjudicating Authority dated 31.08.2023 is set aside - appeal allowed.
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2023 (12) TMI 1173 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Seeking issuance of fresh Form G - Resolution Applicant has submitted his revised plan - Resolution Professional in the Information Memorandum has also mentioned about dispute regarding the property - HELD THAT:- The Adjudicating Authority has taken in consideration the fact that properties shall come to the kitty of the Corporate Debtor, whose value is much more than the entire plan value submitted by the Resolution Applicant, hence, order was issued for issuance of Form G - the observation of the Adjudicating Authority as made in Para 19, 20 and 21 of the impugned order, agreed upon, which was sufficient reason for issuance of fresh Form G. However, we are of the view that some time ought to have been fixed by the Adjudicating Authority for completion of the entire process - while affirming order of the Adjudicating Authority, further direction is given that entire process including consideration of Resolution Plan shall be completed within a period of three months from today.
The present is not a case where the Adjudicating Authority has directed for any valuation of the assets of the Corporate Debtor. Present is a case where during the CIRP process under the orders of the High Court of Delhi properties worth value of approx. Rs.3 Crores have been added to the assets of the Corporate Debtor on basis of which the Adjudicating Authority took the view that fresh Form G should be issued so that interested Resolution Applicants may know that the value of the Corporate Debtor has increased.
It goes without saying that the Appellant shall be entitled to submit his Expression of Interest in response to Form G issued by the Resolution Professional - appeal disposed off.
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2023 (12) TMI 1172 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB
Initiation of CIRP - authentication of default as contemplated in Regulation 21, not taken - information of default not filed with the information utility - HELD THAT:- In the present case no authentication of the default having been obtained by the Financial Creditor, application under Section 7 was not liable to be admitted. The Adjudicating Authority committed error in admitting Section 7 application without there being any authentication of default as per Regulations 2017.
Whether application filed by the Financial Creditor deserves to be rejected on account of non-filing of record of default with information utility? - HELD THAT:- Regulation 20(1A) cannot be read to mean that after the said amendment brought in regulation w.e.f 14.06.2022 an application filed under Section 7 which is not supported by information of default from an information utility is to be rejected and if the Financial Creditor has filed other evidence to prove default which is contemplated by the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the said application has not to be considered - even after amendment of Regulation 20 by insertion of Regulation 20(1A) w.e.f 14.06.2022, Financial Creditor is entitled to file evidence of record of default as contemplated by Regulation 2A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 - there are no substance in the submission of the Appellant that since Financial Creditor has not filed the record of default from an information utility, Section 7 deserves to be rejected - the Adjudicating Authority has correctly repelled the contention of the Appellant that in absence of a record of default recorded by information utility, the application filed under Section 7 may not be admitted.
Nidhi Kumar was fully empowered to nominate, constitute and appoint any one as lawful attorney of the bank at New Delhi. Pawan Sharma himself was Senior Manager, Zonal Stressed Assets Recovery Branch - there are no error in filing the application duly signed by Pawan Sharma supported by Affidavit of Pawan Sharma and submission of the Appellant that NCLT has no jurisdiction to entertain application filed by Pawan Sharma is to be rejected.
There are no substance in any of the submissions raised by the Counsel for the Appellant to interfere with the impugned order of the Adjudicating Authority - There is no merit in the Appeal - appeal dismissed.
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2023 (12) TMI 1171 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Initiation of CIRP - NCLT admitted the application - No outstanding dues - Squaring off of loans - case of appellant is that entire outstanding duty along with unsecured loans belonging to Shankar Khandelwal, his wife Guman Khandelwal and their concerns were squared off against outstanding debts and adjustment paying off balance outstanding in terms of LLP Agreement - HELD THAT:- From the LLP Agreement dated 31.12.2015, it becomes clear that the Respondent Shankar Khandelwal resigned on 31.12.2015 to be effective from 01.04.2016 and the balance sheet of Corporate Debtor LLP was necessary to be drawn accordingly to settle his dues. It is also noteworthy that all outstanding of Guman Builders and Developers Pvt. Ltd and Guman Furniture & Services Pvt. Ltd., was agreed to be adjusted to the account of outstanding partner i.e., the Respondent Shankar Khandelwal.
The Respondent Shankar Khandelwal filed an application under Section 7 of Code alleging non-payment of financial debt of Rs. 38,73,94,501/- which has been disputed by the Appellant stating this to be highly inflated amount due from the Corporate Debtor whereas the only Rs. 5,16,55,842/- was due and payable to the Respondent Shankar Khandelwal by the Corporate Debtor at the time of his retirement from the LLP - the pleadings of the Appellant is accepted that based on combined examination of Ledger and balance sheet it is proven that all dues towards the Respondent Shankar Khandelwal stand settled.
It is also noted that the allegations of the Appellants that the Respondent Shankar Khandelwal is allegedly attempting to recover tainted money from Corporate Debtor, which is forming a part of the proceeds of crime. Even if the alleged loan is found to not be a part of the proceeds of crime, any attempts towards recovery of the amount would have to be adjudicated by a civil court under a recovery suit. The intent of IBC is not to facilitate recovery for creditors - it is agreed that once all outstanding dues have been paid by the Corporate Debtor to the Respondent Shankar Khandelwal, disputed claims if any, can be raised in suitable other legal forum and IBC can not be used for such recovery proceeding.
The main basis contained in the Impugned Order for admission of the Application under Section 7 of the Code is that the Corporate Debtor failed to show any valid proof that debt due and payment to the Respondent Shankar Khandelwal was paid in his individual capacity - No amount of financial debt was due to the Respondent Shankar Khandelwal on the date of filing of the Application under Section 7 of the Code before the Adjudicating Authority. Therefore, the Adjudicating Authority has patently erred in admitting the Application filed by the Respondent Shankar Khandelwal vide its Impugned Order dated 13.10.2021.
The Adjudicating Authority erred in passing the Impugned Order dated 13.10.2021 admitting application under Section 7 of the Code and therefore Impugned Order deserves to be set aside accordingly - Appeal allowed.
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2023 (12) TMI 1150 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI
Violation of principles of natural justice - observations against the erstwhile Liquidator / the Appellant - Impugned Order was passed in the absence of appellant - whether the Adjudicating Authority was justified in making some observations against the erstwhile Liquidator / the Appellant herein, and directing the Registry to forward a copy of the Compliance Affidavit and report of the Court Commissioner to IBBI? - HELD THAT:- The chronology of dates and events establishes that the Appellant was present and heard on several dates specifically regarding the issue on hand. It is pertinent to mention that when the Advocate Commissioner was appointed to facilitate the handover of the documents and implement the Order of the Adjudicating Authority regarding the transition of the control and custody of the statements, records and assets of the Corporate Debtor Company, there was no whisper of protest by the Appellant herein or any bonafide submission before the Adjudicating Authority that the transition would be done within the time frame given by the Adjudicating Authority. The fact that one weeks’ time was given and thereafter, the Adjudicating Authority had directed both the parties to meet, cooperate and implement the Order is not denied - the Appellant was very much present for all previous hearings, relevant to the matter on hand, the Advocate Commissioner was appointed only on account of the situation which has arisen based on the non-handing over of the said documents to the new Liquidator / First Respondent, and therefore, his contention that Principles of Natural Justice was not adhered to, is untenable.
There are no illegality or infirmity in the Impugned Order - appeal dismissed.
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2023 (12) TMI 1149 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI - LB
Withdrawal of the application for approval of the Resolution Plan - breach of addendum dated 18.06.2021 and the conditions of LoI - Issuance of fresh Form G - forfeiture of performance guarantee - exclusion of the period in the CIRP.
Whether after approval of the Resolution Plan by the CoC, the Appellant- Successful Resolution Applicant has committed breach of addendum dated 18.06.2021 and the conditions of LoI? - HELD THAT:- The Resolution Applicant who was permitted to participate in the Resolution Process was on account of its net worth, its background and experience. It is on record that while examining the eligibility of the Resolution Applicant, its net worth was examined with reference to ‘Shoora Capital’ and in the net worth of Resolution Applicant’s, group was claimed in the Resolution Plan - it is clear that the Resolution Applicant has undertaken in the addendum to the Resolution Plan dated 18.06.2021 as well as by LoI dated 28.07.2021 that it shall not change its shareholding in directorship and constitutional pattern of the Resolution Applicant for a period of 5 years from the effective date and for changes if any. Approval of two leading Financial Creditors shall be obtained. Replies to emails received from the Resolution Applicant indicate that no approval was taken from the Financial Creditor for effecting any change in constitutional pattern of the Resolution Applicant and directorship - Adjudicating Authority after considering the submissions has rightly come to the conclusion that the breach was committed by the Resolution Applicant of the addendum dated 18.06.2021 and the conditions as included in the LoI dated 28.07.2021.
Whether in the facts of the present case, CoC was precluded from taking any decision to issue fresh Form G and to withdraw the Resolution Plan which was earlier approved? - HELD THAT:- Present is a case where in essence we may say it is a case of sale of Resolution Plan approved by the CoC to third party. CoC approves the Resolution Plan looking to the credentials of the Resolution Applicant and its credibility and finances. When very basis of Resolution Applicant is knocked out and it changes its constitution substantially the CoC cannot be faulted in view of breach of the conditions by the Resolution Applicant, application for approval of the Resolution Plan be withdrawn - it is concluded that the Resolution Applicant has violated the addendum of the Resolution Plan as well as undertaking as given in the LoI and the Adjudicating Authority has rightly returned the finding.
Whether the decision of the CoC dated 21.12.2022 forfeiting the performance guarantee of Rs.20 Crores given by the Appellant is not in accordance with law? - HELD THAT:- Regulation 36B (4A) provides that performance security shall stand forfeited if the Resolution Applicant of such plan, after its approval by the Adjudicating Authority, fails to implement or contributes to the failure of implementation of that plan. Regulation (4-A) comes in operation after approval of the Resolution Plan and it provides that ‘performance security shall stand forfeited’ - Present is not a case where CoC has passed Resolution dated 21.12.2022 in reference to Regulation 36B (4-A). The minutes of the meeting specifically refers to clause 13.2 of the RFRP. The action of the CoC is fully covered by clause 13.2 of the RFRP and there is no occasion to resort to Regulation 36B (4-A) of the Regulation. Regulation 36B (4F) only contemplate one contingency that where performance security shall stand forfeited but the said provision does not exclude forfeiture of performance security in other conditions as contemplated in RFRP. We, thus, are of the view that the decision of the CoC for forfeiting the performance security is in accordance with RFRP. It is to be noted that at no point of time, any provision of the RFRP was challenged and Resolution Applicant has undertaken to abide by all terms and conditions of the RFRP.
Whether the Adjudicating Authority was not entitled to grant exclusion of the period in the CIRP? - HELD THAT:- The exclusion of the time granted by the Adjudicating Authority was consequent to decision taken to allow the application for withdrawal of the Resolution Plan. The order passed by the Adjudicating Authority granting exclusion of time is consequential to the order passed in IA No.985 of 2023. The Adjudicating Authority in its impugned order has made observations in paragraph 32(ix) and (x) as extracted above that the Corporate Debtor Company is a going concern and there is buoyancy in the market for its products of non-ferrous metals. It is well settled that the object and purpose of the IBC is to revive the Corporate Debtor and when the Adjudicating Authority has taken decision to issue fresh Form G by excluded the period from 05.02.2021 till passing of the order, no exception can be taken to said direction - there are no error in the order of the Adjudicating Authority excluding the period from 05.02.2021 till passing of the order in the CIRP and issuing direction to issue fresh Form-G.
Appeal dismissed.
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2023 (12) TMI 1148 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI - LB
Challenge to direction to Resolution Professional and CoC to move an application before the Hon’ble Supreme Court for seeking clarification in context of the order dated 21.11.2013 passed by Hon’ble Supreme Court - HELD THAT:- There is no dispute that resolution plan has been approved with 100% CoC and the same has also received approval by the Adjudicating Authority by the impugned order.
On looking into the order dated 21.11.2013 a direction was to Sahara Group of Companies not to part with any movable and immovable properties until further orders. Direction to Sahara group of companies not to part with movable and immovable properties can have no bearing with resolution plan submitted by Successful Resolution Applicant for consideration by the Adjudicating Authority. The order dated 21.11.2013 cannot be read as any kind of restraint order in the CIRP process of the Corporate Debtor Baghauli Sugar & Distillery Ltd. & Anr. which is also a Sahara group of company.
The clarification which was given by the Hon’ble Supreme Court by the aforesaid order clearly indicate that Hon’ble Supreme Court was of the view that on the strength of the order dated 21.11.2013 no proceedings before National Consumer Dispute Resolution Commission can be stopped. Hon’ble Supreme Court categorically made it clear that order dated 21.11.2013 shall not prevent the National Consumer Dispute Redressal Commission from proceeding and passing order in accordance with law. The aforesaid clarification is also relevant with regard to CIRP Process of the Corporate Debtor and the intent and purpose of the order dated 21.11.2013 is very clear as clarified in order dated 27.04.2016.
The order dated 21.11.2013 passed by the Hon’ble Supreme Court has no fetter in the CIRP process of the Corporate Debtor nor it can fetter the approval of the resolution plan by the Adjudicating Authority which has been approved by 100% CoC - Adjudicating Authority committed error in putting a condition in the order approving the resolution plan that Resolution Professional and CoC to obtain a clarification from the Hon’ble Supreme Court with regard to order dated 21.11.2013.
Appeal allowed.
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2023 (12) TMI 1147 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
CIRP - Termination of Development Agreement and Supplemental Agreement and Power of Attorney executed between Kolkata Municipal Corporation and ‘Bengal Shelter Housing Development Limited’- Respondent No.1 - The Respondent No.1 engaged Respondent No.2- ‘Barnaparichay Book Mall Pvt. Ltd.’, a wholly owned subsidiary of Respondent No.1 for implementing the said Development Agreement. An Application under Section 7 was filed by ‘Asset Reconstruction Company India Ltd.’ against Respondent No.2 (herein after referred to as Corporate Debtor) on which application by an order dated 09.08.2019 CIRP commenced under the order of the Adjudicating Authority.
HELD THAT:- From the materials on record, it is clear that the Appellant who was owner of the premises and only right for development of the premises was given to Respondent No.1. Respondent No.1 having failed to carry out the development as per the terms and conditions, Kolkata Municipal Corporation has every jurisdiction to cancel the agreement. The cancellation of the agreement being outside the insolvency process, Respondent No.3 could not have brought issue of cancellation of the agreement before the Adjudicating Authority by filing the application IA No.138 of 2022. Respondent No.1 whose Development Agreement was cancelled was free to take such legal proceeding against the Appellant as may be permissible. It is relevant to notice that no proceedings were initiated by Respondent No.1 questioning the termination of agreement dated 17.01.2022.
The Kolkata Municipal Corporation who is owner of the premises by Development Agreement gave right of development of the premises to the Respondent No.1 and Respondent No.1 has unauthorisedly without prior approval of the Appellant as alleged Assignment Agreement dated 06.03.2008 has given to the Corporate Debtor. The possession of the premises has to be of Respondent No.1 who was given possession by the Appellant. In event, the Respondent No.1 illegally transferred the possession to Respondent No.2 contrary to the Development Agreement for protection of such possession, Section 14(1)(d) cannot be relied on.
The Adjudicating Authority has come to a wrong conclusion that the Assignment Agreement dated 06.03.2008 is lawful and valid without looking to the terms and conditions of the Development Agreement which was made by the Kolkata Municipal Corporation in favour of the Respondent No.1 dated 24.02.2006. No valid right could flow to Respondent No.2 in pursuance of the Arrangement Agreement dated 06.03.2008, hence, no right or interest created by Corporate Debtor by virtue of Arrangement Agreement dated 06.03.2008 which was neither obtained with the consent of the Appellant nor the said Arrangement Agreement even communicated to the Appellant by Respondent No.1. The Corporate Debtor had no right to be in possession of the premises nor its possession was lawful.
The Respondent No.1 has brought its 100% subsidiary, Respondent No.2 without there being any consent or permission of the Appellant and in the CIRP of the Respondent No.2, the assets are sought to be included whereas the assets premises are not the assets of the Corporate Debtor - The premises, in question, cannot be subject matter of the CIRP of the Corporate Debtor. Adjudicating Authority committed error in directing the Appellant to handover the possession of the premises to the Resolution Professional. The order passed by the Adjudicating Authority setting aside the order dated 17.01.2022 terminating Development Agreement, Supplemental Agreement and Power of Attorney cannot be sustained.
The order dated 17.11.2022 passed by the Adjudicating Authority is set aside - appeal allowed.
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