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Insolvency and Bankruptcy - Case Laws
Showing 1 to 20 of 120 Records
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2021 (7) TMI 1448 - SC ORDER
Jurisdiction - power of Adjudicating Authority to interfere before the quasi-judicial determination - locus standi to challenge the inclusion of DSKL in the CIRP - necessary party to application - due date to file EOI is a commercial decision or not - it was held by NCLAT that before approval of the Resolution Plan the Adjudicating Authority can entertain or dispose of the question of priorities or any question of law or facts, arising out of or in relation to CIRP or Liquidation proceedings - HELD THAT:- There are no cogent reason to entertain the Appeal. The judgment impugned does not warrant any interference.
The Appeal is dismissed.
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2021 (7) TMI 1438 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Maintainability of Section 9 application - existence of debt due and default or not - HELD THAT:- The amount of default is calculated and Section 9 application was filed and it is claimed that the Appellant is entitle to 20% of the amount received by the Respondent under the Construction Agreement.
There are substance in finding of the Adjudicating Authority that there was no material of service rendered. The Section 8 notice relied on also does not show material as to service rendered. Under the provisions of IBC, to be an Operational Creditor it is necessary to show that there is an operational debt which has to be a claim with regard to provision of goods or services. These important ingredients are missing in the present matter.
The impugned order need not be interfered with - appeal disposed off.
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2021 (7) TMI 1437 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Admission of Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 - time period for filing appeal - HELD THAT:- Under Section 61(2) of the IBC, the period for filing of Appeal is 30 days and the time which can be condoned by this Tribunal beyond the period of Appeal is of 15 days. The impugned order being dated 20.09.2019, the limitation expired after period of Appeal and another 15 days and the present Appeal is clearly time barred.
The ground raised is of limitation with regard to the debt concerned. What appears is that the Corporate Debtor was declared NPA on 15.09.2017. The record does not disclose the date of filing of Application under Section 7 of the IBC. However, the impugned order itself is of 20.09.2019 and there is no substance in the claim that the debt was time barred - Appeal not admitted and is dismissed.
Liquidation order of Corporate Debtor - HELD THAT:- Considering Impugned Order, the record and the time bound procedure under the IBC, we do not think that granting stay to the liquidation proceeding would be appropriate. If the Appellant succeeds, it would be for this Tribunal to mold relief.
List the Appeal for ‘Admission (After Notice) Hearing’ on 16th September, 2021.
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2021 (7) TMI 1429 - MADRAS HIGH COURT
Insolvency proceedings against Guarantor - Whether an individual, in his capacity as a guarantor in connection with credit facilities granted by a bank or financial institution to a corporate entity, may be proceeded against by way of insolvency proceedings under Section 95(1) of the Insolvency and Bankruptcy Code, 2016 before an appropriate Debts Recovery Tribunal?
HELD THAT:- The statutory source of authority for carrying such application to the Debts Recovery Tribunal is found in Section 95 of the Code of 2016. Section 95 is included in Chapter III of Part III of the Code. Part III of the Code is intituled "Insolvency Resolution and Bankruptcy for Individuals and Partnership Firms".
A creditor may apply to the jurisdictional Debts Recovery Tribunal for initiating an insolvency resolution process against appropriate persons under Section 95 of the Code. Section 60 of the Code, which is included in Part II thereof, identifies the adjudicatory authority in relation to insolvency resolution and liquidation for corporate persons. Section 60(1) of the Code mandates that insolvency resolution and liquidation for corporate persons, including corporate debtors and personal guarantors, may be brought before the National Company Law Tribunal having territorial jurisdiction over the places where the registered office of the corporate person is located - However, a “corporate debtor” is defined in Section 3(8) of the Code to mean a corporate person who owes a debt to any person and a "corporate person", in turn, is defined in Section 3(7) of the Code to mean a company, a limited liability partnership firm or any person incorporated with limited liability under any law for the time being in force but not including any financial service provider.
Thus, by no stretch of imagination, may a human individual, whether as a guarantor or otherwise, be seen to be a corporate debtor or a corporate person within the definitions ascribed to such expressions in the Code.
The petitioner seeks to send the Court on a wild goose chase by seeking to take advantage of the perceived anomaly upon the Code, like the Companies Act, 2013, being notified and implemented in stages. That Section 95(1) of the Code applies to any debtor, other than debtors against whom an insolvency resolution process may be initiated under other specific provisions, is apparent - the construction as suggested by the petitioner would also be impermissible, inter alia, in the light of Section 94 which permits an individual debtor to initiate an insolvency resolution process and the use of the general word ‘debtor’ therein, without it being confined to certain classes of persons or partners of partnership firms.
In view of Section 128 of the Contract Act, 1872 the liability of a guarantor is co-extensive with that of the principal-debtor, unless it is otherwise provided by the contract. The petitioner does not claim that there is any agreement or clause present in any agreement that obliges the creditor-bank to exhaust its remedies against the concerned corporate entity before proceeding against the guarantor. The rule as embodied in Section 128 of the Act of 1872 will apply in equal measure to a guarantor who has furnished a guarantee in connection with any credit facilities obtained by a corporate entity.
The petition is found to be completely devoid of merit and nothing but a kite-flying exercise to waste time and dodge the inevitable. For all of the petitioner’s efforts, the petitioner will pay costs assessed at Rs.50,000/- (Rupees Fifty Thousand only) to the respondent bank which the respondent bank will be entitled to recover in course of the insolvency resolution process initiated before the appropriate Debts Recovery Tribunal.
Petition dismissed.
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2021 (7) TMI 1426 - SC ORDER
Extension of time-cum- enlargement of time for completion of the task of reconciliation of accounts of the Corporate Debtor and JAL and submission of final report by Grant Thornton (GT) before the adjudicating authority - SC [2021 (3) TMI 1143 - SUPREME COURT] held that The matter regarding approval of the resolution plan stands remitted to the Committee of Creditors of JIL and the time for completion of the process relating to CIRP of JIL is extended by another period of 45 days from the date of this judgment - HELD THAT:- The final report by the GT be submitted before 15th August, 2021, before the adjudicating authority.
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2021 (7) TMI 1425 - KERALA HIGH COURT
Maintainability of petition - availability of effective alternative remedy of appeal under Section 61 of I&B Code - writ petitions are filed on the premise that the appeals and stay petitions are not being taken up by the NCLAT - HELD THAT:- As observed by the Apex Court in M/s. Innoventive Industries Ltd v. ICICI Bank [2017 (9) TMI 58 - SUPREME COURT], the IBC, 2016 is a Single Unified Umbrella Code, covering the entire gamut of the law relating to insolvency resolution of corporate persons and others in a time bound manner. The code provides a three-tier mechanism namely, (i) the NCLT, which is the adjudicating authority (ii) the NCLAT, which is the appellate authority (iii) the Supreme Court, which is the final authority, for dealing with all issues that may arise in relation to the re-organisation and insolvency resolution of corporate persons. An order passed by the NCLT is appealable to the NCLAT under Section 61 of the Code and the orders of the NCLAT are amenable to the appellate jurisdiction of the Supreme Court under Section 62.
One of the issues that arose for consideration before the Division Bench in Sulochana Gupta [2021 (1) TMI 240 - KERALA HIGH COURT], was the maintainability of the writ petition under Article 226 against an order of the NCLT. The Division Bench, after elaborate survey of precedents, answered the issue by holding that the writ petition to be not maintainable.
Petition dismissed.
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2021 (7) TMI 1420 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHI
Claim of outstanding GST dues - Appellant submits that the amount approved for the Appellant – Operational Creditor is too insufficient considering the claim which was outstanding - HELD THAT:- Hon’ble Supreme Court in Ghanashyam Mishra and Sons Private Limited vs. Edelweiss Asset Reconstruction Company Limited &. Others [2021 (4) TMI 613 - SUPREME COURT] has held that once a resolution plan is duly approved by the Adjudicating Authority under subsection (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the Corporate Debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders.
Considering the judgment of the Hon’ble Supreme Court, the Resolution Plan approved is binding on the Central Government, State Government, any local authority, Guarantors and other stakeholders. Sufficiency or insufficiency of the amount is matter of Commercial Decision of the Committee of Creditors. It would not be appropriate on our part to interfere in the same. As such, the appeal does not make out any ground to admit the same.
There are no reason to admit the Appeal. The Appeal is disposed of as not admitted.
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2021 (7) TMI 1378 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Appointment of IRP - no intimation communicated to him being appointed as IRP either by Registry or by Operational Creditor or by Corporate Debtor - whether CIRP could be commenced by said IRP or not? - HELD THAT:- It seems that the Operational Creditor is not bothered about his own claim, else for more than 330 days we do not understand how the applicant having claim of more than of crore of rupees will sit over under the impression, will not make enquiry either with registry or with the proposed IRP whose name was known to him as he had received the certified copy of the order and one fine day will make an application for change of IRP’s name.
IBBI is directed not to initiate any enquiry till further orders, if any enquiry is initiated, the same be halted till further direction from this Court.
Application disposed off.
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2021 (7) TMI 1377 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Seeking to change the name of IRP appointed by the Bench Mr. Aditya Kumar - HELD THAT:- Learned Counsel has suggested the name of Mr. Nitish Kumar Sinha to be appointed whose form-2 is also filed alongwith application. We failed to understand that how after 330 days of CIRP period prescribed under the Code, such kind of application can be entertained. Be that as it may, we refer this matter to IBBI to make appropriate enquiry with respect to IRP appointed by the Bench and take appropriate action as required against said IRP.
Application is disposed of with the direction to the IBBI to take appropriate steps.
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2021 (7) TMI 1375 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI, COURT -II
Right to file reply - Petitioner submits that despite the directions given to the Respondent, no reply has been filed on behalf of the Respondent - HELD THAT:- The right to file the reply is hereby closed - List the matter for arguments on 13.08.2021.
Ld. Counsel appearing for the Petitioner submits that the Affidavit has been filed on 10.07.2021 but the same is not available on DMS. Therefore, the Petitioner is well advised to share the filing no. with the Registry and the Registry is directed the list the same, if it is defect free - List the matter on 13.08.2021.
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2021 (7) TMI 1357 - NATIONAL COMPANY LAW TRIBUNAL KOLKATA
Maintainability of petition - separate identity of holding and subsidiary companies - scope of the expression, "member" occurring in section 241, 242 and 244 of the petition - Should it be read narrowly and strictly in terms of the definition in section 2(55) of the Companies Act, 2013, or should it be given a little expansive meaning so as to include with its fold a beneficial owner of shares? - Can a Significant Beneficial Owner (SBO) of the shares of a holding company rappel straight into a subsidiary without coursing through the holding company? - Should the identities of the holding company and its wholly owned subsidiary be blurred so as to be so unidentifiable and practically indistinguishable?
As Per Rajasekhar V.K., Member (J):
HELD THAT:- Section 89(10) defines "beneficial interest" in a share to include, directly or indirectly, through any contract, arrangement or otherwise, the right or entitlement of a person to - (i) exercise or cause to be exercised any or all of the rights attached to such share; or (ii) receive or participate in any dividend or other distribution in respect of such share - Therefore, for a beneficial interest to be recognised, forms are required to be filed both by the registered owner of the shares as well as by the person holding beneficial interest in the shares. Without that, it is not possible for a company to recognise the beneficial owner of a share. In the case of the Subject Companies, at least upto the filing of the petitions, the holding company, VTL, had not filed or recognised the APL Committee as the beneficial owner of the shares in any of the Subject Companies.
Coming back to the definition of 'Member,' it is trite law that when a word has been defined, that definition should prima facie be applied wherever that word is used in a statute. It is assumed that the legislature is fully alive to the definition, and has intended that the term as defined shall govern what is proposed under that enactment. It is an exhaustive definition and not an inclusive one, leaving no interstices for judicial intervention. Reading the provision of 'Member' in the manner that I have been invited to do by the learned senior counsel for the petitioner, will be doing violence to the language of the statute. Therefore, on this ground, the petitioners have no locus to maintain the present petitions.
The petitioners' case is that the forms regarding beneficial interest were filed with the Subject Companies on 09.12.2019. However, it is the claim of Mr. RP Singh, director, that these forms were never brought to the notice of the board of directors. This allegation has remained uncontroverted even though much has been said in the space of the four days allotted for the hearing. Even after Mr. Ranjan Bachawat, learned senior counsel for R5, specifically raised this during the course of his arguments, this was brushed aside as of no consequence by Mr. Joy Saha in his rejoinder arguments, and that these cannot be raised by R5 who was an independent director.
On record, there was absolutely no action of any consequence, save and except that the RoC seems to have been cajoled into marking the Subject Companies as being under 'management dispute.' This was chicanery on the part of the Subject Companies, since on 22.04.2021, there was no management dispute. The boards of the Subject Companies were united in their decision that VTL should not be allowed to have its way. What was there was that the 100% shareholder was attempting to infuse new directors into the board - If the boards of the Subject Companies were aggrieved, they did not challenge it then at the relevant point of time. Instead, in the present petition, there is a prayer for interim relief of mandatory injunction restraining the new inductees from representing or holding themselves out as directors of the subject companies, without a corresponding challenge the holding of the EGM of 22.04.2021 at which they got appointed. There is also a final prayer that the new inductees should be removed from the boards.
Applying the facts to the provisions of section 241, 242 and 244, where all three sections use the expression "Member," it is not possible to read the term to include persons who are, to borrow a term in familial relationships, "once removed" from the company, i.e., who would at best be treated as beneficial owners of shares in the holding company that holds 100% of the shares of the Subject Companies. One must continually remind oneself not to get too carried away to ignore the statute and guard against attempts to read equity into every act at the cost of the statute itself from where one takes appointment.
There is no statutory requirement that the shareholders of a company have to give reasons to justify reasons for removing directors. The authorities in which it has been held to be so are too numerous to be recounted here. Suffice it to say that a board or its constituent members can be in office only so long as it enjoys the confidence of a majority of the shareholders. It is also an established principle of law that a shareholder holding the requisite minimum number of shares can always requisition an EGM for removal or for appointment of a director.
The effect of these discussions is that the petitions are deemed to be not maintainable, on facts and in law. There is also the small matter of the territorial jurisdiction issue to be overcome, because this is, properly viewed, a case of action directly primarily against VTL whose registered office is situated in the State of Madhya Pradesh.
As per Harish Chander Suri, Member (T):
The present petition is very much maintainable, because for granting injunction, the Courts or for that matter this Tribunal cannot strictly go by the legislated law, it has the discretion in the specific circumstances, and those circumstances do exist in the present case because there is a long history of litigation between the parties and there are orders subsisting and binding on this Tribunal. Unless and until the whole controversy between the 'Member' vs. 'Significant Beneficial Owner', which for the present is a grey area and does not have so many binding judicial precedents, views and authorities of the higher courts clinching the issue, is settled in the final hearing of these petitions, the Injunction Orders sought by the petitioner have to be granted. The balance of convenience is more or less straight but certainly it tilts in favour of the petitioners on certain points because if the interim relief prayed for is not granted, and the EGMs are allowed to be held by the concerned respondents with the newly appointed Board members or for removing the existing members, and certain unpalatable decisions are taken which are not in favour of respondent no. 1 company, the whole purpose of the appointment of the APL Committee/petitioner no. 1, by the Hon'ble High Court will become meaningless and frustrated, which would result in further multiplicity of litigation.
Petition disposed off.
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2021 (7) TMI 1355 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH COURT III
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - OTS (One Time Settlement) sanctioned to the Corporate Debtor - existence of debt and dispute or not - HELD THAT:- The Company Petition is nothing but a second round of litigation. The earlier company petition bearing no. 4086 of 2018 was withdrawn by the applicant on account of OTS (One Time Settlement) sanctioned to the Corporate Debtor. Except paying upfront amount of 10 crores, the Corporate Debtor did not adhere to the compliance of the remaining terms of the OTS despite availing nearly two years’ time.
Thus, the debt and default are admitted in this case and the debt is also within limitation. The application is complete in all respects and the Financial Creditor also suggested the name of Mr. Vijay Pitamber Lulla as Interim Resolution Profession along with his consent letter in Form II. Thus, the present Company Petition satisfies all the necessary legal requirements for admission.
Petition admitted - moratorium declined.
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2021 (7) TMI 1340 - NATIONAL COMPANY LAW TRIBUNAL GUWAHATI
Seeking deletion of names of the Personal Guarantors from this Petition - requirement to file separate applications against the Personal Guarantors - HELD THAT:- The Petitioner is permitted to file an Affidavit in this regard within 7 days from today and copy of the same is to be given to the Respondent. Since the petition filed is under Section 7 of IBC, no further adjournment shall be granted.
List the matter on 11.08.2021.
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2021 (7) TMI 1331 - NATIONAL COMPANY LAW TRIBUNAL, 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 - service of demand notice - HELD THAT:- In the case in hand, the demand notice was duly delivered prior to the notification dated 24.03.2020.
When all the above provisions under Sections 7, 8, 9 & 10 of IBC are read together, it is observed that, the word ‘default’ is common to all and the right to file an application under any of these Sections 7, 9, 8 or 10 of IBC accrues only when the default has occurred. And in addition to that an application under Section 9 can only be filed, if demand notice is delivered under Section 8 of IBC, 2016, and 10 days’ time is given to the Corporate Debtor to bring to the notice of the operational creditor the existence of dispute, if any - therefore, even if the default has occurred, an application under Section 9 of IBC can only be filed, if an opportunity is given to the Corporate Debtor to file the reply to the demand notice issued - Under such circumstances, a situation may arise, when a person has delivered the demand notice prior to the issuance of notification dated 24.03.2020 but the reply to the demand notice was filed after the issuance of said notification but within ten days from the delivery of the demand notice, as it has happened, in the case in hand.
Whether by issuance of said notification dated 24.03.2020 under proviso to Section 4 of IBC, can a right, which has already accrued to a person, can be taken away by that notification, which is admittedly issued thereafter? - HELD THAT:- Every notification has prospective effect and so far as the filing of application either under Section 7 or 9 or 10 is concerned, it can only be filed, if the default in making payment has occurred, except in the matter of Section 9 of IBC, where Demand Notice is to be delivered after the default.
Under the IBC, a right to apply accrues when default has occurred. Therefore, the application under Section 7 or 9 of IBC can be filed within three years from the date when right accrues, i.e. when the default has occurred. If the statute provides a person to file an application within a prescribed period, when the right accrues, then by exercising delegated powers, an executive can not take away that right and it is also not the intention of the executive - No doubt, it is a well settled principle of law that once a right is vested, it cannot be divested.
Thus, once the default has occurred prior to the issuance of notification dated 24.03.2020 and demand notice was also sent/ delivered prior to that notification, the enhancement of the threshold limit from one lakh to one crore rupees is not applicable in such matters.
When the default has occurred prior to the notification and demand notice was not sent prior to that notification in that case, whether the present notification dated 24.03.2020 is applicable or not? - HELD THAT:- An application under Section 7, 9 or 10 IBC can only be filed, when the default has occurred. Therefore, the intention of the legislature is to give right to an aggrieved person under Section 7, 9 or 10 IBC, only when a default has occurred in making the payment of the dues - Once the default has occurred prior to the issuance of the said notification dated 24.03.2020 then that right cannot be taken away by issuance of that notification.
Even in the matter, in which the default has occurred prior to the issuance of said notification dated 24.03.2020 and no demand notice (as in the case of Section 9) was delivered prior to that notification, in that case too, the said notification is not applicable. rather, the minimum threshold in that case, as per Section 4 of IBC, 2016, is one lakh rupees and not one crore rupees - the notification is applicable only in respect of the default which has occurred on or after 24.03.2020 and not prior to that.
Thus, in the present case, it is noticed that the demand notice was delivered prior to the issuance of the notification dated 24.03.2020. Hence, the said notification dated 24.03.2020 is not applicable in the case of the petitioner.
List the matter for hearing on other issues on 09.08.2021.
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2021 (7) TMI 1329 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH
Principles of natural justice - applicant submits that though reply from the first respondent has been received but the reply of second respondent has not been served on her till date - HELD THAT:- Since the same is available in the Registry of Chandigarh Bench filed vide Diary No.00019/12 dated 22.02.2021, learned Senior Counsel for the applicant in the CA is permitted to collect a copy of the same from Registry - List IA No.368/2020 on 30.09.2021.
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2021 (7) TMI 1328 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATA
Maintainability of application - time limitation - present Application claimed to be filed on 11th March, 2021 i.e. more than two months after the rejection of the claim by the RP - HELD THAT:- There was no need for the CEO of the Company to travel to Kolkata for filing this Application. Even now, the Application has been affirmed at Chennai only. So, this explanation does not hold water.
In any case, the Resolution Plan has been approved by the CoC on 5th June, 2021 and at this late stage, allowing the claim of the Applicant, will not only cause grave prejudice to the completion of the CIRP, it will also be unfair to other similarly situated Creditors, who could not have filed their claim before the date fixed for this purpose.
This is not a fit case for exercising of discretion for condonation of the delay in filing of the claim with the RP - Application dismissed.
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2021 (7) TMI 1327 - NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH
Failure to provide necessary internet services to all the residents in the area - HELD THAT:- It is prima facie apparent that the applicant had breached the terms of the agreement by not providing internet services to all the residents as agreed by him. In view of the same, the application filed by the applicant i.e Radius Infratel Pvt. Ltd. is dismissed and the respondents are at liberty to provide necessary services through some other agency.
Application stands dismissed.
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2021 (7) TMI 1311 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Seeking extension of CIRP period - HELD THAT:- It appears from record that assets of the Corporate Debtor attached by CBI and ED and they are not yet released. In such situation, we feel that CIRP cannot prolonged on such ground for indefinite period. This application stands disposed of.
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2021 (7) TMI 1304 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI
Seeking grant of interim relief - HELD THAT:- This prayer shall be considered, only after the appearance of the Respondent - Ld. Counsel appearing for the Petitioner also wish to serve the Dasti notice upon the Respondent. Prayer is Allowed. He is directed to serve the Dasti notice upon the Respondent.
List the matter on 04.08.2021.
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2021 (7) TMI 1303 - NATIONAL COMPANY LAW TRIBUNAL, NEW DELHI, COURT - II
Seeking direction to Resolution Professional to verify, entertain and accept the claim of the Applicant - Resolution Professional Mr. Kashi Vishwanathan Sivaraman, not acting under the specific and mandatory regulations and guidelines of the Code - HELD THAT:- Considering the fact that no specific order on the claim submitted by the Applicant has been passed by the RP as yet, we direct the RP to consider the claim of the Applicant pending before him since long on merits and pass a specific order in accordance with the provision of Law.
Application disposed off.
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