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Insolvency and Bankruptcy - Case Laws
Showing 101 to 120 of 147 Records
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2019 (12) TMI 1297 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - time limitation - dishonor of cheque - HELD THAT:- It is noted that in the financial statements for the year ended 31st March, 2016, the amount of secured loan has been shown. The fact of default has also been mentioned. The said balance-sheet also contain figures of such loan in financial year ended on 31st March, 2015. It has been also noted that in financial year 2011-12 and 2012-13 cheques given by the Corporate Debtor as EMI have been presented by the Bank which have got dishonoured. Such cheques were neither recalled nor any instructions had been issued as regard to cancellation/ non encashment. The Financial creditor has also produced the demand promissory note and other documents to establish the fact of continuation of limitation till December, 2012. Thus, a prima facie case of a alive claim has been established.
In the present case, there is a continuous cause of action and an acknowledgement of debt resulting into continuation/ extension of limitation period before the expiry of the original limitation period. In this regard, the presentation of outstanding loan in the financial statements for the year ended on 31st March, 2016 which also depict the figures of the same as on 31 st March,2015 is continuation of such outstanding loan from the earlier financial years as in such a case no other conclusion can be arrived i.e. the outstanding loan continues from earlier years except the figure of the same which may vary due to interest, if any, charged subsequently or due to repayment of loan, if any.
There are no merits in the contention of the Corporate debtor that there exists some dispute and it was a case of non performance for the reason that even a disputed claim can be considered for the purpose of section 7 so long, there is debt which is due and payable and a default has occurred in payment thereof.
In the present case, it is not in dispute that undisputed claim remains more than Rs. One Lakh, hence, CIRP can be initiated. Thus, this claim of the corporate debtor is also rejected - The petition is otherwise complete in all respects and defect free - The name of the IRP has also been proposed who has given his consent and it has been claimed that no disciplinary proceedings are pending against him. Accordingly, his name is approved.
Application admitted - moratorium declared.
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2019 (12) TMI 1296 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT:- After hearing the counsel for the applicant and the admission in form of email from the CD with respect to the debt falling due the default is proved beyond doubt. The CD has neither replied nor appeared for defending the application and thus application deserves to be admitted - The registered office of corporate debtor is situated in New Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The present application is not barred by limitation as the date of deault is 28.07.2017 as per part IV of Form 5 and application is filed on 28.09.2019.
The applicant has filed an affidavit in compliance of Section 9(3)(b) stating no notice of dispute was raised from CD by the applicant. The applicant has attached the copy of bank statement in compliance with the requirement of Section 9(3)(c) of the IBC 2016.
The present application is complete and the Applicant is entitled to claim its dues, establishing the default in payment of the operational debt beyond doubt, and fulfilment of requirements under section 9(5) of the Code. Hence, the present application is admitted - Moratorium declared.
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2019 (12) TMI 1290 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Removal of nominee director - entitlement to shares - shares freely transferable with the right to nomination or not - HELD THAT:- The CD has got the right to maintain the required number of its nominated directors in R-5. Here in this case, by the force of Sub-Section 7 of Section 33 of the Code, the nominee directors deemed to have vacated their directorship under nomination from the CD unless they are permitted to continue by the liquidator as on the date of order of liquidation of CD.
The liquidator has the power to nominate directors to maintain the required number of nominee directors in R-5. The nominee directors being nominated by the CD and CD having been taken over by the liquidator, the nominee directors are bound by the directions of the liquidator. Even under section 19 of the Code, and under section 284 of the Companies Act 2013, the nominee directors are bound to obey the directions of the liquidator. The nominee directors shall extend full cooperation to the liquidator in discharge of his functions and duties. Here, in this case they have failed in co-operating with the liquidator and also were reluctant to vacate the office as the nominee directors of CD in R-5.
The Articles of Associations were entered into with express consent of the parties. The eventualities arising out of retirement, dismissal, removal or vacation of office voluntarily are dealt with in the agreement. Truly, eventualities like discharging authority conferred on nomination upon force of law is not dealt with in the agreement or in the Article of Association. But it appears to us that as per section 238, provisions of the Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law to override other laws. That being the legal position as of now, there is notice of discharge to the nominee directors of the CD in R-5 as per section 33(7) of the Code.
The application filed by the Liquidator deserves consideration. It has come out in evidence that RI and R2 acted against the interest of the liquidator. It is incorrect to hold that R-5 is not bound by the terms of agreement so as to accept the proposal of the liquidator to accept the nominee directors proposed by the liquidator. R-5 is bound by the proposal and is obliged to present before the AGM for its approval. It cannot take a unilateral decision that it is not bound by the proposal legitimately submitted by the liquidator in exercise of the powers vested in him under the provisions the Code read with Article 121 and 140 (4) of the Article of Association. R-5 also is not entitled to know the reason behind the replacement of the existing nominee directors by the CD/liquidator. Even if the nominee directors are elected as the directors because they have acquired shares independently in R-5, they cannot under the provisions of the Code, unless the liquidator authorises them to continue, they have no right to sit as nominee director. Their nominee director status stands discharged with effect from 17.10.2017. These points are also answered in the affirmative.
The power to remove the nominee directors and can nominate directors and that R-5 is bound to act upon the proposal of replacement of existing nominee directors of CD - Application allowed.
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2019 (12) TMI 1273 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - matter is pending before the Debt Recovery Appellate Tribunal against the order passed under the SARFAESI Act, 2002 - ‘Financial Creditor’ from initiating any coercive steps subject to deposit of money by the ‘Corporate Debtor’ - time limitation - HELD THAT:- In B.K. Educational Services Private Limited V. Parag Gupta and Associates [2018 (10) TMI 777 - SUPREME COURT], the Hon’ble Supreme Court held that the Limitation Act, 1963 is applicable to applications filed under Sections 7 and 9 of the ‘I&B Code’ from the inception of the Code, and as such Article 137 of the Limitation Act gets attracted.
The Limitation Act, 1963 was also made applicable by insertion of Section 238A of the ‘I&B Code’.
In the present case, in fact the default took place much earlier. It is admitted that the debt of the ‘Corporate Debtor’ was declared NPA on 1st December, 2008 as has been noticed by the Adjudicating Authority - ‘Asset Reconstruction Company (India) Ltd.’- (Financial Creditor) cannot derive any benefit of the action taken under ‘SARFAESI Act, 2002’ which is guided by separate provisions of limitation - Admittedly, the ‘Financial Creditor’ took action under the ‘SARFAESI Act, 2002’ in the year 2013. Therefore, the second time it become NPA in the year 2013 when action under Section 13(2) was taken.
In the present case, the account was declared NPA since 1st December, 2008 and therefore, the suit was filed. Thereafter, any document or acknowledgment, even after the completion of the period of limitation i.e. December, 2011 cannot be relied upon. Further, in absence of any record of acknowledgment, the Appellant cannot derive any advantage of Section 18 of the Limitation Act. For the said reason, the application under Section 7 is barred by limitation, the accounts of the ‘Corporate Debtor’ having declared NPA on 1st December, 2008.
The Adjudicating Authority having failed to appreciate the aforesaid fact, the impugned order dated 1st May, 2019 rejecting the objections of the ‘Corporate Debtor’ and the impugned order dated 31st May, 2019 passed by the Adjudicating Authority admitting the application under Section 7 are set aside - appeal allowed.
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2019 (12) TMI 1243 - NATIONAL COMPANY LAW TRIBUNAL, CHANDIGARH
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - whether a default has occurred or not? - HELD THAT:- The default in the repayment of the loans/cash credit facility is stated to have occurred from 30.11.2016 onwards when quarterly instalments and monthly interest became due. The computation of the overdues and default is given in Annexure V (colly). A letter dated 02.02.2017 is stated to have been issued by the financial creditor informing the corporate debtor that its account maintained with the financial creditor was declared as a Non-Performing Asset as on 31.12.2016 in terms of the guidelines of the RBI. A loan recall notice is stated to be issued on 05.01.2018 and notice under Section 13(2) of SARFAESI Act, 2002 on 18.01.2018. The facts sufficiently evidence the occurrence of the default.
t has been held by the Hon'ble Supreme Court in M/S. INNOVENTIVE INDUSTRIES LTD. VERSUS ICICI BANK & ANR. [2017 (9) TMI 58 - SUPREME COURT] that in the case of a corporate debtor, who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred and it is of no matter that the debt is disputed so long as the debt is "due" that is payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date - In the present case, the evidence produced by the financial creditor has been discussed above and it has been concluded that a default has occurred. The debt is also due since it is not interdicted by any law.
The occurrence of default is proved in the present case - application filed in the prescribed Form No.I is found to be complete - Application admitted - moratorium declared.
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2019 (12) TMI 1173 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Approval of the Resolution Plan - extension of time period for legal proceedings - invitation for "EoI" - filing of the Resolution Plan by the Resolution Applicant - Section 30(6) of I&B Code, 2016 - Since the Resolution Plan submitted by the successful Resolution Applicant scored more value, the same was placed before the COC for voting which was ultimately approved by the COC and voted with approval of 81.39% of share and now the Resolution Plan placed for consideration.
HELD THAT:- It is a settled law that the Financial Creditors and the Operational Creditors cannot be treated on the same footing and moreover, the principle of equality cannot be stretched to treating unequals equally, as that will destroy the very objective of the Code. It is time and again reiterated by the Hon'ble Supreme Court that so long as the provisions of the Code and the Regulations have been met, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept a resolution plan, which may involve differential payment to different classes of creditors, together with negotiating with a prospective resolution applicant for better or different terms which may also involve differences in distribution of amounts between different classes of creditors and hence the objections made by the Applicants are not sustainable
A conjoint reading of Section 25(2)(h) of the IBC, 2016 with Regulation 36A (10), (11) and (12) would posit the fact that objections to inclusion or exclusion of a prospective resolution applicant in the provisional list referred to in sub-regulation (10) can be made with supporting documents within five days from the date of issue of the provisional list - In the present case, the intended prospective resolution applicant viz. Sai Trading and Interiors has expressed their interest by way of an email to the Resolution Professional on 17.04.2019 and his name was included in the provisional list of resolution applicant released by the Resolution Professional on 23.04.2019, however his name was left out from the final list of prospective resolution applicant released by the Resolution Professional on 28.04.2019.
A perusal of the minutes of the 8th COC reveals the fact that exclusion of M/S. Sai Trading and Interiors from the prospective list of resolution applicant was deliberated upon by the COC in its 8th COC meeting dated 28.04.2019 and the COC and the Home buyers had serious doubts as to the capability, competence, quality, bonafide and financial soundness of M/S. Sai Trading and Interiors and upon detailed discussions made thereunder, it was finally resolved to exclude M/S. Sai Trading and Interiors from the prospective list of resolution applicant and moreover, as per Regulation 36A (11) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the COC is empowered to include or exclude any person from the prospective resolution applicant.
The person challenging the Resolution Plan is not even an unsuccessful Resolution Applicant but only an intended prospective resolution applicant, whose name has been left out from the final list of resolution applicants, M/S. Sai Traders and Interiors has no vested right that his resolution plan ought to have been considered by the COC and no challenge can be preferred thereof before this Adjudicating Authority.
The Resolution Plan is hereby approved and is binding on the Corporate Debtor and other stakeholders involved so that revival of the Debtor Company shall come into force with immediate effect and the "Moratorium" imposed under section 14 of IBC, 2016 shall not have any effect henceforth - application disposed off.
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2019 (12) TMI 1141 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Initiation of CIRP - Permission for withdrawal of company petition - Parties settled the matter - Section 12A Read with Regulation 30A of IBBI (CIRP) Regulations, 2016 - HELD THAT:- Interim Resolution Professional stated that he has received full fee and cost of publication. The Committee of Creditors is not yet constituted. The Procedure prescribed under Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons), 2016 has been followed. This tribunal has power under Section 12A Read with Regulation 30A of IBBI (Insolvency Resolution Process for Corporate Persons) 2016 permitting for withdrawal of the application even after admission of Petition.
Petition disposed of as Withdrawn under Section 12A of Insolvency and Bankruptcy Code, 2016.
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2019 (12) TMI 1140 - NATIONAL COMPANY LAW TRIBUNAL, CUTTACK
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - outstanding amount due and payable to applicant - HELD THAT:- The Corporate Debtor availed various financial facilities like working capital, term loan, current account etc with the applicant since 2012. The Corporate Debtor also executed various loan documents in favour of the applicant in July 2014, April, 2015 and March, 2017. However, the Corporate Debtor was unable to repay loan hence, the loan accounts were declared as non-performing asset on 13.03.2018. The loans are secured by way of hypothecation of movables and mortgage of immovable properties - The loan documents and acknowledgement of debt are filed along with the application. The loan account was declared as non-performing asset on 13.03.2018. Further, claim is also pending in the file of DRT Jabalpur. Hence, the debt is well within the period of limitation.
The registered office of the Corporate Debtor is at Raipur, Chhattisgarh. Hence, this Adjudicating Authority has jurisdiction - The outstanding amount due and payable to applicant is sum of ₹ 10,26,54000/- as on 31.03.2018. The debt and default are proved beyond reasonable doubts. Hence, we are inclined to ADMIT this application.
Application admitted - moratorium declared.
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2019 (12) TMI 1139 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - Default of debt - necessary records not produced by petitioner in support of his claim - time limitation - HELD THAT:- In column No.2 of Part IV, the applicant mentioned the date of default is on 31.07.2019 and the amount on which the applicant claimed as per the date of default is of ₹ 27,23,125.00/-. Part V, which relates to the particular of financial debt (Documents, Records and Evidence of Default) from serial No.l to 7, the applicant mentioned this fact that 'Not Applicable' and at serial No.8, which relates to the list of other documents, he mentioned that 'The Ledger account issued by the corporate debtor and the copy of bank passbook of the applicant showing the interest paid by the corporate debtor'.
Whether the case of the applicant comes under the financial debt and the applicant is the financial creditor or not? - HELD THAT:- tt is very difficult to ascertain the amount, which has been shown in the ledger account in financial year 01.04.2018 to 28.02.2019, is in lieu of amount advanced by the applicant to the corporate debtor on 04.11.2010, 19.11.2010, 15.02.2011 and 08.11.2012. This document is also not sufficient to establish that the interest was paid prior to that period. Since, there is no other document to establish that on the amount shown in column 1 part IV, the interest was regularly being paid to the applicant by the corporate debtor, I am unable to place reliance upon this document.
Time Limitation - HELD THAT:- The applicant has not produced any document, (same as referred in part V), therefore, it is admitted fact that the said debt of the applicant has not been acknowledged and so far as the document, which the applicant claimed, that the last interest has been paid in the financial year 2018-19, is the date of default is concerned, in my opinion, it is not liable to be accepted because there is no such agreement on the record to show that, when the applicant was entered into an agreement to the Corporate Debtor for providing financial assistance and what was the due date for repayment of the said amount in the absence of any specific period within which the amount is required to be refunded and in the absence of any acknowledgement of the debt after the expiry of three years, in my opinion, debt is barred by limitations.
This Adjudicating Authority is of the considered view, that the present claim of the applicant in the absence of acknowledgement of debt is barred by Article 137 of Limitation Act - the present petition filed u/s 7 is not according to the provision of law and is not complete and it is also barred by limitation, thus this petition is not liable to be admitted.
Petition dismissed.
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2019 (12) TMI 1138 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate debtor failed to make repayment - debt due and payable - HELD THAT:- It is beyond doubt that the default has occurred with respect to the payment of the financial debt due to the Applicant.
As per reply of the corporate debtor it is admitted that the occupation certificate was obtained in the year 2017 and when occupation certificate is received in 2017 how can the corporate debtor offer possession in 2016 to the applicant as claimed by it. The corporate debtor has not produced any completion certificate. Even if the defense for delay is considered in present case, the delay is more than three years and hence non-payment of assured returns and penalty by the corporate debtor as per MoU will amount to default. The intent of the code to protect the allottee would be completely defeated, if such a defense of the corporate debtor is to be accepted.
It is evident from the record that the application has been filed on the proforma prescribed under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the Code. This Tribunal is satisfied that a default has occurred and the application under Section 7 is complete. The name of the IRP has been proposed and his/her consent in Form 2 has been duly filed. There are no disciplinary proceedings pending against the proposed Interim Resolution Professional.
Application admitted - moratorium declared.
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2019 (12) TMI 1137 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
CIRP proceedings - approval of resolution plan - HELD THAT:- As regards compliance of clause (b) of Section 30(2) of the Code, the Resolution Professional has certified that clauses 6.3 and 6.4 of the resolution plan provide for the payment of the debts of operational creditors in such manner as may be specified by the Board which shall not be less than the amount to be paid to the operational creditors in the event of a liquidation of the corporate debtor under Section 53. - it is seen that clause (b) of sub-section (2) of Section 30 of the Code stands satisfied.
It is pertinent to state here that Section 29A of the Code prescribes certain eligibility criteria and disqualifications for persons who submit a resolution plan. Resolution applicant has given adequate declaration and undertaking on their eligibility to submit the Resolution Plan. Resolution Professional has also confirmed that the Resolution Applicant M/s. Ajay Yadav & Co. through its SVP Umaiza Infracon LLP has submitted affidavit in this regard and are eligible to submit resolution plan and does not fall under any of the category as mentioned in Section 29A of the Code - Regulation 36B(4A) of the CIRP Regulations requires that the Resolution Applicant shall provide a performance security. Resolution professional has certified that the Resolution Applicant has submitted Performance Guarantee of ₹ 44 Crores issued by AU Small Finance Bank Limited in compliance of Regulation 36B(4A) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 - we are satisfied that all the requirements of Section 30(2) are fulfilled and no provision of the law for the time being in force appears to have been contravened.
The requirements as per the Code and regulations have been complied with. Moreover, the Resolution Plan has been unanimously approved by 100% voting share of the members of CoC and has been submitted in compliance of Section 30 of the Code for approval. In view of the aforesaid discussions and as no infirmity have been brought out upon screening of the Resolution Plan; we hereby approve the Resolution Plan under sub-section (1) of Section 31 of the Code
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2019 (12) TMI 1121 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment - default due and payable - HELD THAT:- The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied with and after a conjoint reading of the aforesaid provisions along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete.
The name of the IRP has been proposed by the petitioner and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional namely Ms. Maya Gupta and she is appointed as the Interim Resolution Professional - application admitted - moratorium declared.
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2019 (12) TMI 1120 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD
Maintainability of application - initiation of CIRP - whether in absence of any document applicant is able to establish that he is financial creditor and respondent is corporate debtor? - Section 7 of IBC,2016 - time limitation - HELD THAT:- It is admitted position of law that to initiate the proceedings under section 7 of IBC, it is not necessary to sent the notice upon the Corporate Debtor and that is the main distinction between the provision contained in Sections 7 and 9 of the IB code - the contention of applicants that the date of default is the date of notice sent by the applicants to the Corporate Debtor, cannot be accepted. If the date of notice is not treated the date of default, then according to the averments made in Part IV of the application, the last payment made by the applicant on 07.05.2016, whereas this application has been filed on 21.06.2019.
Tine Limitation - HELD THAT:- As per the provision of Article 137 of Limitation Act, so far the recovery of money is concerned, the person is required to file the application within three years when the cause of action arises - Here the case in hand , the applicants has failed to show what is the date of cause of action or what is the date of actual default. Therefore, since the last amount claimed by the applicant was defaulted on 07.05.2016, therefore limitation runs from that day. Since this application has been filed on 21.06.2019, therefore, it is after the 3 years as provided under the law. So the present application is also barred by law of limitation.
The applicant failed to produce any document to show that what was the agreed interest in-between the parties on the basis of which money was borrowed. Therefore, the case of the applicant, does not comes under Section 5(8)(a) of IB Code and also does not come either under (b) or (c) or (d) or (e) or (f) or (g) or (h) or (i) of Section 5 (8) of the I & B Code - Therefore, the contention of the applicant that these payment shown in schedule Part IV of Form-1 comes under financial debt and The applicant comes under the definition of financial creditor in view of Section 5 (7) of the IB Code, cannot be accepted.
The applicant failed to bring on record the default recorded with the information utility or such other record or evidence as maybe specified which is necessary to proceed for admitting the petition Under Section 7 of the l&B Code - Application dismissed.
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2019 (12) TMI 1119 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD
Maintainability of application - initiation of CIRP - service of notice u/s 8 of IBC - corporate debtor has failed and neglected to make the payment to the Operational Creditor till date - present case has been filed on behalf of Operational Creditor against the Corporate Debtor U/s 9 of the I & B Code and before filing the present petition, the Operational Creditor had sent the demand notice as required U/s 8 of the IBC - whether the notice sent U/s 8 of the IBC is deemed to be served or not? - HELD THAT:- It is a settled principle of law that there is a difference between the procedure for initiation of CIRP by the Financial Creditors U/s 7 of the IBC and the Operational Creditors U/s 9 of the IBC. So far as the Financial Creditor is concerned, as per Section 7 of the IBC, there is no need to deliver the notice before the initiation of CIRP and that has been decided by the Hon'ble Apex Court in Innoventive Industries Ltd. v. ICICI Bank [ 2017 (9) TMI 58 - SUPREME COURT ].
A mere plain reading of the provision shows that, in this provision like Section 8 of IBC, the word 'deliver the notice' is not mentioned, rather it is mentioned that 'the payee or the holder makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the cheque', where in Section 8 of IBC, the word, 'deliver the notice upon unpaid operational creditor' is mentioned. There is a difference between these two Sections, Section 8 of TBC and Section 138(b) of the N.I. Act regarding the service of notice upon the person concern - The purpose to deliver the notice is to give an opportunity to the Corporate Debtor to raise a dispute or negotiate with the operational creditor and that was the intention of the legislatures, that is the reason the word 'delivery' has been given in place of 'sending or giving the notice upon the person concern'.
The applicant had sent the demand notice only through the registered post, which was returned unserved and he has neither delivered it personally nor send the demand notice through electronic mail service to a whole time director or designated partner or key managerial personnel of the corporate debtor - the applicant has not complied the provision contained under Rule 5 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, therefore, this Tribunal is of the considered view that the applicant has not delivered the demand notice as required U/s 8 of the IBC, which is the mandatory provision of law and so on this ground in the absence of delivery of demand notice as required U/s 8 of IBC, the present petition filed by the applicant/operational creditor is not complete and not maintainable and liable to be dismissed.
Petition dismissed.
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2019 (12) TMI 1023 - BOMBAY HIGH COURT
Maintainability of application - initiation of CIRP - Conduct of NCLT - passing an order in illegal member - principles of natural justice and the procedure established by law - Retiring Judicial member of NCLT is going to be appointed as member of NCLAT - HELD THAT:- When the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 were notified, the legislature was aware that it will have to frame and notify separate rules enabling filing of application under section 7(1), section 9(1) and section 10(1) of the IBC. If they are not notified as yet, then, Rule 10 allows filing of application under the NCLT Rules, 2016 and particularly Rules 20 to 26. However, that does not mean that the rest of the NCLT Rules already notified and governing procedural aspects and guiding the NCLT would cease to apply. That is not the mandate flowing from the language of Rule 10. We, therefore, do not find any merit in the argument of Mr.Kadam in this behalf.
Clause (a) of sub-section (5) enables admission of the application on the necessary satisfaction being recorded with regard to the default. Further, the disciplinary proceedings should not be pending against the proposed resolution professional. If the satisfaction is recorded on this ground, the order of admission can be made, whereas, the rejection is contemplated by clause (b) of sub-section (5) of section 7. Before rejection of the application, the applicant has to be given an opportunity to rectify the defect and within the time stipulated in the proviso below clause (b). The CIRP shall commence from the date of application under sub-section (5) and that is what subsection (6) of section 7 contemplates, whereas, the communication of the order to the Financial Creditor and the Corporate Debtor is an aspect covered by sub-section (7) of section 7 of the IBC.
The legislature says by sub-section (1) of section 7 that an application can be made and by other sub-sections of section 7, how the application should be dealt with is enumerated. Pertinently, sub-section (5) of section 7 requires the satisfaction to be recorded in terms thereof. If that satisfaction is recorded, there is an admission of the application. The admission of the application has to be intimated or communicated. The order of admission or rejection of the application is required to be passed and that has to be intimated or communicated. By that alone, we cannot conclude, as desired by Mr.Kadam, that there is no mandate or requirement of pronouncement of the order. The intimation or communication of admission of the application presupposes or predicates the passing of an order. Such an order of the adjudication authority is to be declared by the NCLT.
A perusal of the sub-rules of Rule 150 and 151 so also 152 would enable us to hold that the tribunal, after hearing the applicant and respondent, shall make and pronounce the order either at once or, as soon as thereafter, as may be practicable, but not late than thirty days from the final hearing. Apart from the fact that there is a limit set out for everything, that by itself does not mean that rule makers intended total dispensation of the requirement of pronouncement of the order. The pronouncement is necessary. It could be either at once or as soon as thereafter, as may be practicable, but not later than 30 days from the final hearing. We are not concerned in this case with a situation where this time limit is not adhered to. However, by sub-rule (2), what is indicated is that every order of the tribunal shall be in writing and shall be signed and dated by the President or Member or Members constituting the Bench which heard the case and pronounced the order. Sub-rule (3) of Rule 150 says that a certified copy of every order passed by the tribunal shall be given to the parties and then sub-rule (4) says that the tribunal may transmit order made by it to any court for enforcement, on application made by either of the parties to the order or suo motu.
There is enlargement of time permissible by Rule 153. The rectification of order is provided under Rule 154 and by Rule 155, there is a general power to amend conferred in the tribunal. These ancillary and incidental powers enable the tribunal to render complete justice. The requirement of making entries by Court Master would play a very vital role in the conduct of judicial proceedings is contemplated by Rule 156 and by Rule 157, there is a transmission of order by the Court Master. There is a transmission of the order with the case file to the Deputy Registrar by Rule 157(1) and thereafter, the duty of the Deputy Registrar is to make scrutiny and record the satisfaction that the provisions of these rules have been duly complied with and in token thereof affix his initials with date on the outer cover of the order.
Everything depends upon the facts and circumstances in each case. Nobody should be allowed to manipulate the judicial process and secure favourable relief or judgment by deft management. Judges ought to be aware of the modern trends and tendencies in instituting and prosecuting litigation before a court of law. They must maintain absolute integrity and autonomy, independence of the judiciary cannot be compromised. At all costs, that should be maintained.
If the functioning of the tribunal is monitored and supervised by a particular department of the Central Government, then, that departmental staff is appointed to assist the tribunal. Effective work cannot be done unless the Registrar, Superintendent and other staff members are drawn from the courts already functioning and discharging judicial functions. The trained staff of such courts can be deployed as a temporary measure and thereafter, by a proper selection process, the staff to assist and support the Judicial Members and the President should be selected and appointed. The staff ought to be drawn from legal field. If any administrative staff or departmental member is appointed or deputed to work in the tribunals, he may not have any experience of working in a court. We have have noticed in this case that the NCLT lacks such a staff. It is on account of the staff members that in this case both the judicial Members have been embarrassed. The litigants suffer by a requirement to hold the proceedings afresh.
The present writ petition is maintainable - the impugned order is set aside on the ground that the same is a nullity.
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2019 (12) TMI 1022 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of loan - financial creditor - existence of default - debt due and payable - HELD THAT:- The petitioner-financial creditor had disbursed the loan amount to the respondent-corporate debtor. It is accordingly held that the respondent-corporate debtor has committed default in repayment of the outstanding financial debt which exceeds the statutory limit of rupees one lakh. Thus, the petition warrants admission as it is complete in all respects.
The provisions of Section 7 (2) and Section 7 (5) of IBC have been complied with and after a conjoint reading of the aforesaid provision along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub-section 2 of Section 7 is complete.
Application admitted - moratorium declared.
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2019 (12) TMI 1021 - NATIONAL COMPANY LAW TRIBUNAL, ALLAHABAD
Maintainability of application - initiation of CIRP - allegation that application is not in accordance with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) and also not in accordance with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) - Section 8 of I & B Code, 2016 - HELD THAT:- Although applicant submitted application in form 1 r/w Rule 4 but part 1 to part 3 is of Form-1 and part 4 to part 5 of the application is of Form-5 i.e. a particular of operational debt. Therefore, it can be said that applicant filed the application partly in form 1 and partly in form-5. This Adjudicating Authority further find that in the synopsis the applicant also mentioned as financial creditor/operational creditor. This Adjudicating Authority further find, applicant has stated that the demand notice was issued on 04.02.2019 under Section 8 of I & B Code, 2016.
This Adjudicating Authority is of considered view that Application submitted by the Applicant is not in accordance with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) and also not in accordance with Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority Rules, 2016) under which Operational Creditor is required to file application, rather it is combination of both Rules 4 and 6 and that it is the reason applicant has filed application partially in Form -1 and partially Form-5 - Since in present case application is not in accordance with Rule 4 or Rule 6 and applicant itself not sure under what provision he is required to file the application for the amount, which he claims to be paid to M/s. Sunworld Residency Pvt. Ltd. fall (Financial Debt/ Operational Debt), under such circumstances this Adjudicating Authority is of considered view that present application filed by the Applicant is not as per prescribed Form and not as per IB Code, 2016.
Application not maintainable.
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2019 (12) TMI 1020 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI
Maintainability of application - initiation of CIRP - Corporate Debtor committed default in making payment - existence of dispute or not - HELD THAT:- There are clear disputes relating to breach of agreement as provided u/s. 5(6) of the Code. The dispute regarding the breach of agreement was raised by the Corporate Debtor long back prior to the issue of demand notice. Hence this is a clear case of pre-existing dispute between the Corporate Debtor and the Petitioner.
There is a dispute, in relation to the unpaid operational debt, between the parties which is supported by abundant evidence. This dispute existed prior to the serving of demand notice under section 8 and the Operational Creditor had notice of existence of such dispute. Further, this dispute truly exists in fact and is not spurious, hypothetical or illusory.
This petition as under section 9(5)(2)(d) is rejected.
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2019 (12) TMI 894 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate debtor defaulted in making repayment - existence of debt and dispute or not - HELD THAT:- As per the order dated 01.08.2019 of this tribunal it is noted that the Corporate Debtor is not in a position to clear the debt that due presently. Hence this tribunal vide the order dated 01.08.2019 direct the Corporate Debtor to file an affidavit in relation to the admission of claim.
From the definition of "Operational creditor" and "Operational Debt'', it can be seen that the applicant has provided services to the respondent and has placed sufficient evidence to prove its claim. There was a default in payment of claimed amount, and the respondent failed to establish the fact that there is a pending dispute between the parties in respect of the amount claimed. Moreover, the respondent has also filed an affidavit in which it has been submitted that Respondent is not in the position to honour the debt owed to the Operational Creditor - In light of the same, such application deserves to be admitted for triggering Corporate Insolvency Resolution Process against the respondent corporate debtor. Besides, the respondent had not issued any notice of dispute after receiving demand notice in terms of Section 8 of the Code.
The present petition is complete and there has been default in payment of dues by the respondent. Therefore, on fulfilment of the requirements of section 9 (5) (i) (a) to (d) of the Code, the present petition warrants admission.
Petition admitted - moratorium declared.
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2019 (12) TMI 893 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - Financial Debt - whether any coupon rate is prescribed or not comes within the 'financial debt'? - HELD THAT:- This Tribunal is of the view that both at the time of initial agreement dated 28.03.2011 as well as under the Amendment Agreements, the 'Investor Debentures' being a part of 'Investor Securities' falls within the definition of 'Financial Debt' as 'debentures' by its very nature, taking into consideration the provisions of Section 3(30) of the Companies Act, 2013, of which this Tribunal can take recourse to in the absence of any definition contained in IBC, 2016 of 'debentures' in view of Section 3(37) of IBC, 2016, is defined to include debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not, the 'debt' which was due and payable, when the event of default happened in the instant case as per the agreements prior to settlement agreement in the year 2015 and hence the contention that the Petitioner cannot be considered as a 'Financial Creditor' or the amount claimed as a 'Financial Debt' is not acceptable.
The Settlement Agreement is only a sequel to the earlier agreements under which investments were made, and in any case the Settlement Agreement treats the total amount as a 'debt' payable with interest cannot be denied by the Corporate Debtor in the capacity as a promoter/developer as both of them/all of them are jointly and severally liable for the amounts due to the Financial Creditor having signed the agreements jointly and in the circumstances the contention that no privity of contract exists as between the parties raised by the Corporate Debtor cannot also be accepted.
Thus when repayment was demanded and since there has been no repayment till date, whether it be of 'debenture' or 'loan' being attendant with payment of interest or not, as agreed between the parties and the amount being disbursed against the consideration for the time value of money thereby falling within the definition of 'Financial Debt' and there is default in repayment of the 'financial debt' and that a default has been committed in terms of Section 3(12) of the Code of a 'financial debt' as defined under Section 5(8) of the Code and that the Applicant has rightly invoked the provisions of the Code.
Application admitted - moratorium declared.
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